Law Times

April 26, 2010

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Solution Process Serving (416) 644-8867 Billions of dollars invested, not a penny lost. $3.55 • Vol. 21, No. 14 ntitled-7 1 3/23/10 2:34:16 PM Ruling centres on fiduciary duties owed to partners Firm wins appeal of bonus battle BY GLENN KAUTH Law Times C ounsel for a lawyer at the centre of a pay dispute with Aird & Berlis LLP says he's disappointed the Ontario Court of Appeal has ruled law firms have no duty to warn partners about a prospec- tive change in their compensation struc- ture. The comments come after the appeal court's decision last week in Springer v. Aird & Berlis LLP that ruled against former part- ner Harold Springer's bid for greater com- pensation. Last year, Ontario Superior Court Justice Frank Newbould awarded Aird & Berlis nearly $500,000 in costs in rejecting Springer's claims, an amount that goes up by $30,000 as a result of the latest judgment by appeal court justices Robert Sharpe, Elea- nore Cronk, and Jean MacFarland. Springer's appeal of Newbould's ruling re- lied "on undertakings by the firm's executive committee that the managing partner would meet with each partner to review that partner's likely level of income under the new compen- sation system," last week's judgment noted. The judges, however, disagreed that such a scenario created a fiduciary duty. "We do not agree that these undertakings gave rise to a fiduciary duty," they wrote. "It is well- established that not every statement or act made or done in the context of a fiduciary relationship gives rise to a fiduciary duty. Further, not every legal claim arising out of a fiduciary relationship will give rise to a claim for breach of fiduciary duty. . . . In our view, 'My client is very pleased with the court's decision and the end of this unfortunate episode in the firm's business,' says Linda Rothstein. the statements or undertakings relied on by the appellant amounted to nothing more than ordinary administrative steps taken by the firm's executive committee in the man- agement of the partnership." Thomas Dunne, the Gowling Lafleur Hen- derson LLP lawyer who represented Springer, notes that "I'm disappointed and my client is disappointed," adding he feels the case raised a key concern for the legal profession. "I also think this issue of owing a duty to warn your partners is an important issue for all law firms or professional associations in Canada," Dunne tells Law Times. "And for the court to say, as they did, that this was not a duty that needed to be fulfilled, is disappointing." The dispute dates back to 2002, when Springer left the firm. That year, Aird & Ber- lis introduced a new compensation system that would reduce Springer's pay, the appeal court judges noted. But in launching his orig- inal claim, Springer argued he should have received more money through the firm's com- pensation scheme based on his performance. In January 1999, he received 185 partnership units and 65 bonus units for "extraordinary results," Newbould noted in his judgment. In January 2000, Springer received 225 normal units and 200 bonus units, each worth $2,600. In January 2001, he got 400 normal units, each worth $2,895, and a cash bonus of $560,000. But in January 2002, he received 175 normal units and on the same day advised the firm he was leaving. Springer felt he deserved 100 more units in 2001 and 325 more in 2002. In the meantime, Springer had previously urged the firm's executive committee to award him more partnership units to make him on par with partner Jack Bernstein, an international tax expert recognized as the firm's top rainmaker who received the most partnership units. Springer claimed as well that Aird & Berlis' former managing partner had promised him See Springer, page 5 Judicial Supervision 6 Aging Lawyers 13 Focus On IT/ Telecommunications Quote of the week "I think there's regulatory fatigue in Canada. We don't have the same enforcement culture and the debates about this kind of stuff aren't nearly as robust." Ed Waitzer, Stikeman Elliott LLP, See Goldman, page 8 Covering Ontario's Legal Scene First Canadian Place 100 King street west. Suite 3700 Toronto, On M5X 1C9 10 years of experience! olutionProcess_LT_Apr19_10.indd 1 April 26, 2010 10 years of experience! 4/13/10 11:58:49 AM Inside This Issue 3 But litigants walking into court 'must think they've entered a time warp' BY MICHAEL McKIERNAN Law Times system is moving too slowly to embrace technology after a jus- tice of the peace banned a lawyer from using his laptop in court. Nevertheless, Superior Court A Justice Thomas Granger says the case is an isolated incident since almost all judges allow laptops. But while the general trend is towards greater acceptance of technology, that embrace isn't as strong as he would like. "It's a paperless world we live in," says Granger. "Expectations judge who spearheaded the use of paperless trials in Ontario says the justice have changed for everybody ex- cept the court system. If I walked into a bank, and they had all my records on paper, I'd walk straight out of there. That's what they did 30 or 40 years ago. When a client to switch off his laptop during a stunt-racing trial in Whitby, Ont. The Crown prosecutor ob- jected to the laptop's potential use as a recording device. "Of all the arguments I had an- If I walked into a bank, and they had all my records on paper, I'd walk straight out of there. walks into a courtroom and sees these boxes and boxes of photo- copied paper, they must think they've entered a time warp." The renewed debate over technology comes after a justice of the peace ordered criminal defence lawyer Sean Robichaud ticipated that day, that one didn't even come close to the radar screen," Robichaud says. "I was so taken aback that I was virtually speechless for the first couple of minutes trying to form an argu- ment on how to respond to that, maybe because I wasn't allowed to use my laptop to do so." Robichaud says he informed the justice of the peace that the computer contained all of his notes on the case. As a result, he had to ask for an adjournment because continuing the trial would have compromised his client's defence. Later that day, Robichaud says he got a call from prosecutor Ve- ronica McGuire saying she had changed her position after talk- ing with colleagues and wouldn't object to the laptop when the case returns to court in August. "I really don't have any com- ment to make on it at all," McGuire tells Law Times. See Lawyer, page 5 Maybe you need a better mousetrap. Tel: 416.322.6111 Toll-free: 1.866.367.7648 Industry leader in legal software for real estate, corporate and estates for over a decade Laptop ban an isolated incident, judge says

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