Canadian Lawyer InHouse

23 CANADIANLAWYERMAG.COM/INHOUSE NOVEMBER 2017 ship, it's going to go a long way." Pethealth, which is a Fairfax Financial company, is unique in that pet insurance is so different — it doesn't fall into home and auto, it actually falls into property insurance, so in every province and every state in the U.S., it's classified in a different way. The company doesn't just sell pet insurance, it also has RFID microchip identification and database services for pets. "Big firms weren't interested in what we were all about. We don't just do insurance, we cover the whole life of the pet, so you adopt the pet, microchip the pet, then buy insurance for the pet. We're like the entire pet parent and insurance is one aspect of that, but I found the smaller firms have be - come our business partners and are so keen to learn what we're doing," she says. "We have different lawyers in every state and province and we use smaller boutiques." The reason is specialized knowledge, reli - ability and they are "committed." "I can call their cellphone and they pick it up, and cost is a factor — if you compare the bills, they are so much smaller. That's what it comes down to," she says. "I'm working on my budget for 2018 and it comes down to the dollars. Executive-level people don't care where you are getting the legal work from. They say you spent this much in legal fees but still have the same result when [you] could have got it from someone else?" There are areas in which she still turns to large firms for assistance such as large litiga - tion or regulatory matters. "I wouldn't use boutiques on one-shot matters. With mat- ters related to regulators, I would look to see if they have worked with the regulator be- fore and what's their reputation. With regu- lators, there is no course of appeal; it's very difficult to get them to change their mind. If I had an insurance investigation or com- plaint against the company, I would have a good reputable firm that has worked with regulators in the past." At Allstate Canada, general counsel Martha Binks also uses boutique firms for insurance defence and privacy work, and she says large national firms are often not interested in insurance defence work due to the lower rates associated with the work and they often don't have the expertise. "They don't do it all the time so they don't know what's relevant or the quickest way to deal with it, it's just not their thing." "For an insurance company the claims are a signficant liability so they have to be tracked closely and so there are very strict requirements you have to follow when you first get a file. It's not that they aren't doable, but there are a lot of lawyers who don't do it well. If a firm provides a reasonable service, reports on time and prepares you for what's going to happen on the file, then they are likely to get more files." For a global engineering company such as Golder Associates, professional liability can be an issue, so Tony Linardi, general counsel for Canada, uses boutiques for that kind of insurance defence work. "When you use a small firm, you get the personalized service and build the relation - ship and that builds familiarity around what I expect on reporting and billing and what they can expect from my payment cycle, as well as how I expect them to interact with my internal clients," says Linardi. Much like Sidhu, Linardi made the switch to smaller firms when he joined Golder in 2002 and says he hasn't looked back, due largely to cost, responsiveness and expertise provided by boutiques. "At larger firms, you tend to get bounced around to who has time to do the work and you sometimes have to bring associates up to speed on engineering and construction concepts, whereas at the boutique firms I know the person I use un - derstands drilling and dirt and all that goes with it, so I don't have to educate the lawyer as to the type of business I run." Linardi retains boutique firms in Alberta, Ontario and B.C. "We used to use a large firm in Alberta and when I saw the bills I felt we weren't getting value so moved to the smaller firm. "We have arbitration work as well — it's one of the dispute resolution mechanisms we have in our contracts — instead of going to litigation we can go to arbitration. We've only had one file go to arbitration in the last 15 years, but we use boutiques for the un - derstanding of our business," he says. Arbitration is an area Alexander Gay, litigation counsel at the Department of Justice in Ottawa, says is largely underused in Canada. He maintains a broad civil liti - gation practice, with an emphasis on com- mercial and trade disputes. "It is a problem in that the practice of arbitration is very poorly developed in this jurisdiction," he says. "We have the lowest usage rates in the Commonwealth." He has represented clients in arbitrations, mediations and before regulatory tribunals and boards, including the Ontario Energy Board, the Canadian Human Rights Tribu - nal, the Canadian International Trade Tri- bunal, the Alberta Securities Commission, the Environment Canada Board of Review, the Public Service Labour Relations Board and the Competition Tribunal. He is also the author of the Annotated Arbitration Act of Ontario, 1991, the Annotated Ontario Arbitration Legislation-Arbitration Act, 1991 and International Commercial Arbi - tration Act, 2017 and numerous articles. Gay is trying to elevate it for a num- ber of reasons. Firstly, he says it generates economic activity when litigants come to Ontario to conduct an arbitration; and secondly, it is a good alternative to the courts. "It is far more flexible and far easier to tailor a process that meets the needs of a file." Despite all the tax expertise that exists in- side Allstate, Binks says compliance has also hired a tax boutique firm for an assessment the company disputed. "It was extremely successful in a real niche service. We have corporate law firms we go to for most of our corporate work, but respondng to an assess - ment was seen as one that was appropriate for a niche firm." In that instance, the hour- ly rate was not cheaper but they were sought out because of their expertise. "I think that's how to approach it; for the very specialized work, and for insurance defence it's really transactional, but if you do it you get really good at doing it quickly," says Binks. "The more predicting you can do on those files the more value you add." IH We have different lawyers in every state and province and we use smaller boutiques. HARPREET SIDHU, Pethealth Inc.

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