Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 5 9 I f the Law Society of Upper Canada starts regulating law firms, one specific area for firm compliance could be trust account management, a new report suggests. Law societies in Nova Scotia and Alberta have specific compliance rules regarding firm trust accounts, according to the interim report penned by a committee looking into a framework for entity regulation for consideration by Convocation. The report comes as the push for entity regulation gathers steam, particu- larly in Nova Scotia (see page 7), and is a development some lawyers are welcom- ing. "Even as a signalizing device, it's very interesting to see Ontario considering this because I do think this is the regula- tory way of the future," says Jordan Fur- long. "It's a great approach. It's a welcome change in how we view the purpose of regulation of lawyers and regulation of legal services." In light of the current consideration of alternative business structures at the law society, pondering entity regulation is more important than ever, according to Furlong, who notes entity regulation would allow the LSUC to regulate the pro- vision of legal services by non law firms. Regulating legal service providers could allow the law society to better respond to complaints, according to the LSUC report, which suggested firms could designate an individual in charge of dealing with com- pliance matters. This individual — or "a legal director" — would also be responsible for trust account matters and ensuring the firm's record keeping is current. That pro- cess would allow the law society to provide notification to the firm if one of its lawyers is under a misconduct investigation. The law society may also require the designated legal director to address the issue on "a firm level" in areas such as lack of super- vision, advertising, or conflict of interest issues, the report noted. "The key principle is that the responsi- bility is that of the firm to determine how to achieve compliance," according to the report. "The regulator would assist firms to achieve compliance by providing tools and templates and working with firms if they are non-compliant." Malcolm Mercer, chairman of the committee overseeing the issue, says it's unclear at this point whether staff would present a single framework for entity regu- lation or several options for consideration by Convocation. And in light of the recent bencher elections and the potential chang- es to the committee's composition, Mercer couldn't say when the committee would bring a final report to Convocation. — YAMRI TADDESE yamri.taddese@thomsonreuters.com \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP Ontario also examining entity regulation MANITOBA EYEING LAW FIRM REGULATION AS WELL P R A I R I E S I n early May, the Manitoba government proposed changes to the province's Legal Professions Act that would give the Law Society of Manitoba new powers to regulate law firms. Justice Minister Gord Mackintosh said the amendments would bring the province in line with some other provinces that have already amended their legal profession legislation to allow law firm regulation. The change may be setting the stage for alternative business structures in the province, says Manitoba lawyer Karen Dyck. "I think it's very much a first step towards ABS. I think Manitoba is putting that in place," Dyck says. "They've already been discussing ABS and I have every expectation that . . . the benchers will pass rules ultimately that would permit outside investment in law firms. Marilyn Billinkoff, deputy CEO of the Law Society of Manitoba, wouldn't say ABS is imminent in the province. "There's a conversation ongoing about ABS and the amendments will permit ABS, but at this point in time, it's very early going," she told Legal Feeds. "But because we had some amendments going to the government, we also asked them to include the flexibility to have ABS if the benchers decide to go that route. There could be so many models for ABS that it's not really clear how they're going to work," she adds, but it would be helpful if provinces across the country adopted similar structures. "And a lot of us are working on it." Overall, the changes would increase accountability, said LSM CEO Kristin Dangerfield. "The proposed amendments would ensure that not only individual lawyers but also the law firms in which they practise are subject to regulation and are accountable to the public consumers of legal services." The latest proposals would also allow the law society to publish the names of lawyers facing professional misconduct charges. Currently, lawyers are only identified if they have been convicted of professional wrongdoing. The cur- rent rules around naming lawyers who are accused of professional misconduct appear to protect lawyers instead of the public, Dyck says. "It does leave the public in a kind of precarious position. If you're being represented by a lawyer who is facing charges, you may or may not know about it," she says. Two more non-lawyer benchers would be added to the Law Society of Mani- toba's governing table under the amendments, bringing the total membership of non-lawyers to six, according to the government. — YT

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