Law Times

Law Times • November 25, 2013 Lawyers find niche practices in funeral business BY Julius Melnitzer For Law Times D ying, it turns out, may be less complex than the legalities surrounding the businesses that serve the deceased and their loved ones. The upshot is that these legalities have become the foundation of an interesting practice area for a handful of lawyers. "Cemeteries and funeral homes are a very big, highly regulated business," says Prema Thiele of Borden Ladner Gervais LLP's Toronto office. "But because of the sensitivities surrounding death, people don't think of funerals and memorial services and cremations in the context of an ongoing business." 'The industry is poised to benefit from an The biggest player in Canada is aging Canada,' says Prema Thiele. Houston-based Service Corp. International, a New York Stock Exchange-listed company with a market cap of some US$4 billion and 2012 revenues in the area of $2.5 billion emanating from 1,800 locations around the world, including those owned by its major Canadian subsidiary, Service Corp. International (Canada) Ltd. "SCI is huge in Canada," says Thiele. "And with giant companies come the regular legal services required to service any public company." Large private companies also abound. For example, Mississauga, Ont.based Arbor Memorial Inc., a family-owned Canadian company established in 1947, now includes 41 cemeteries, 27 cremation facilities, and 92 funeral homes. There are also many examples of successful companies that have chosen to remain regional, like Turner & Porter in Ontario, or local, like Humphrey Funeral Home A.W. Miles Chapel Ltd. in Toronto. "Ma and pa operations in this industry are voluminous in Canada," says Thiele. Regardless of size, however, these are highly regulated businesses. "And the minute you add a regulated component, you layer on a whole new level of legal services," says Thiele. "So it's a pretty specialized practice in which you can't just dabble." The Funeral, Burial and Cremation Services Act governs the industry in Ontario. The legislation consolidates the Cemeteries Act and the Funeral Directors and Establishments Act. A separate statute provides for a self-regulating body, the Ontario Board of Funeral Services, under the jurisdiction of the Ministry of Consumer Services. The consolidated act also provides for proficiency and educational standards for funeral directors and others, but the most significant regulatory requirements on a day-to-day basis are likely the regulations dealing with sales practices and, particularly, pre-need services. "Pre-need sales are a large part of the business," says Thiele. "Funeral homes want to sell you your funeral now." On Sept. 1, 2013, new regulations establishing educational and continuing education standards for salespeople came into force. They also imposed reporting and trust requirements for monies advanced by clients. "These regulations recognize the potential for hard sales tactics in preneed marketing," says Thiele. Lawyers provide advice regarding the licensing of a funeral home, the ownership structure, staffing in terms of individual proficiency qualifications, and sales practices. There are also the usual corporate and commercial legal services required by most types of private businesses or public companies. "That includes employment law and also labour law as many locations in Canada are unionized," says Thiele. "We're currently dealing with a lockout situation that involves injunctions and the like." Because traditional funeral concepts are changing rapidly, the challenge facing individual operators becomes one of remaining relevant to consumers. "That means moving away from traditional funerals and services to softer approaches like bereavement services," says Thiele. "But in all cases, operators have to be careful about what they're allowed to do and what they can't do." Another key competitive issue is the ability to leverage scale. "Sharing personnel, vehicles, counsellors, centralized operations, and purchasing power is a recurring consideration," says Thiele. "That's why the SCIs of the world are always looking to expand." It's no surprise, then, that the funeral home industry has been something of a hotbed for mergers and acquisitions. "I've been involved in about 100 M&A deals in the industry," says Thiele. "But the activity has slowed down somewhat in the last four or five years, much like M&A generally." Still, the future looks positive. "The industry is poised to benefit from an aging Canada," says Thiele. "Right now, just under 20 per cent of Canadians are over 60, but by 2030 approximately 25 per cent of the population will be in that group." LT Page 11 FOCUS Firm harnesses society's security focus Bennett Jones launches defence group aimed at emerging area BY Julius Melnitzer For Law Times N ational security and defence preparedness and responsibility fall, for the most part, on the shoulders of government. But these complex and dynamic arenas also reach well into the private sector. It's with this in mind that Bennett Jones LLP officially created its defence and security practice group in 2012 following some 18 months of informal functioning. "Fast-changing public policy, procurement priorities, emerging threats, and appetite for strong defences create unprecedented commercial opportunities," says Duncan Card, the group's co-leader with Robert Booth, a partner who's also director of the Canadian Defence and Foreign Affairs Institute, and Edward Goldenberg, who heads up the firm's government affairs and public policy practice. "To this end, our defence and security team represents clients in the defence, technology, consulting, and security industries who provide defence, national security, and related strategic goods and services." In this context, the group deals with diverse retainers involving military procurement; national security policy; government contracts and tendering; market access and international trade; procurement challenges and dispute resolution; private sector infrastructure security; employee security, clearances, and monitoring; cyber security; corporate governance, including disclosure and risk assessment; anti-corruption compliance and investigations; supply chain integrity and security risk management; secured communications and information technology; export controls and permits; and cross-border transactions embracing tax, customs, immigration, competition, and national treatment practices. "What we've established is a full-service legal group that focuses on certain industries' needs for advice regarding security practices and we have a client base that appreciates the focused, specialized sensitivity we provide to them," says Card. To be sure, the place of these issues within a defence and security practice isn't always apparent. But it becomes more so on consideration of the scope of the laws, regulations, policies, and programs that affect defence and security. These factors include the Defence Production Act and Canada's procurement programs, including the electronic, munitions, and tactical systems service; the controlled goods directorate; industrial security programs; and the Treasury Board of Canada Secretariat's policy on government security and guidelines for invoking national security exemptions. Also involved are Shared Services Canada, an entity created in August 2011 with a broad appropriations procurement mandate to securely transform and standardize the government of Canada's information technology infrastructure in relation to e-mail, networks, telecommunications, and data centres, and the Department of Foreign Affairs, Trade, and Development. Finally, there are the activities of the Department of National Defence, the Canadian Forces, and Public Safety Canada; the Privy Council Office's advisory council on national www.lawtimesnews.com 'Not many issues of national security and defence preparedness fall directly on the shoulders of corporate Canada, but cyber security is clearly one of them,' says Duncan Card. security; the Communications Security Establishment Canada; and the Canadian Security Intelligence Service. At first blush, for example, it may be surprising that the private sector has a definite role in cyber security as it relates to national defence and security. "Not many issues of national security and defence preparedness fall directly on the shoulders of corporate Canada, but cyber security is clearly one of them," says Card. "It is a vital aspect of national security that is not exclusively owned by governments and an extremely important field of private and public sector intersection where national security interests don't just meet, they collide." According to Card, a cyber attack on Canada wouldn't only target military assets but would likely include attacks against critical and privately owned infrastructure guarded by the boards and executives of vulnerable sectors such as power grids, financial institutions, communications systems, and aspects of the country's transportation networks. "What that means is that IT security issues that were previously exclusively matters of corporate governance can now also be considered matters of national security," he says. "As the press very frequently reports, cyber attacks on our national interest are taking many forms, all of which must concern corporate Canada at the highest levels of governance." Sometimes these attacks, like denials of service, interfere with online businesses, but others may constitute aggressive corporate espionage involving attempts to steal vital commercial information and trade secrets. "What better way to attack the security of an information-based economy than by stealing or sabotaging its most valuable and competitive knowledge assets?" asks Card. "As cyber security attracts ever-increasing scrutiny, corporations need to be ahead, not just on top of, the security standards curve." Part of what the defence and security group does, then, is help companies develop cyber security policies from the top down. "But cyber security issues also arise in the course of normal commercial transactions, particularly IT transactions," says Card. "As well, they arise at the intersection of the public and private sectors on issues like privacy breaches." LT

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