Law Times

Page 8 April 14, 2014 • lAw Times www.lawtimesnews.com Focus on IT/Telecommunications Law CBA Legal Futures Initiative ABS debate continues despite lack of consensus he latest stage in the Ca- nadian Bar Association's Legal Futures Initiative has produced a definite finding that there's no con- sensus in the legal profession about the way forward. Its focus on introducing alternative business structures that will allow for the attraction of capital and greater investment in information technology is the starting point of what may be a heated debate. e Legal Futures Initiative is a project designed to help the legal profession face a future in which new technologies will constantly change the delivery of legal services. e February report, generated by six months of consultation, gives a snap- shot of the divergent state of opinion in the profession. Malcolm Heins, chairman of the busi- ness structures and innovation team, wasn't particularly surprised at the lack of consen- sus. "At the moment, we have those on one side of the equation that would agitate vocif- erously for change and another group that are adamantly opposed to any change. en there are a lot of people in the middle who haven't thought about it in any great detail. e point it makes is the need for this report to come forward." Heins believes the status quo depicted in the report may already be changing since the release of a more prescriptive report by the Law Society of Upper Canada on alter- native business structures. It concluded On- tario needs to liberalize business structures. Malcolm Mercer, co-chairman of the al- ternative business structures working group at the LSUC, says: "You start with the under- standing that individuals and small busi- nesses in Ontario are largely served by sole practitioners and lawyers in small firms and you recognize the way the regulatory system works so that only lawyers have ownership interests and the range of services that can be provided by law firms is limited." Mercer notes technology requires capital as well as human resources and other skills and experiences lawyers don't necessarily have. "ink about an ordinary firm that wants to innovate and continue to supply le- gal services as they do. ere is an advantage to bringing in an information technology expert, such as a family member with so- ware expertise, or a business manager. From a lawyer's point of view, it's attractive. ey can focus on what a lawyer enjoys most: the practice of law. It's not a substantial change in how law firms run." Mercer considers it an exciting time. "Not so long ago, computers had a tiny fraction of the processing power. Now they allow the combination of long-dis- tance communications and legal exper- tise. at's quite new." Heins believes alternative business struc- tures enable more flexibility in practising law and more innovation in the delivery of legal services. "If there is access to capital and expertise, there is an ability to unroll other services that provide a more fulsome solu- tion," he says. Mercer points out that at present, small firms are only able to raise money by bor- rowing. He refers to a report written by pro- fessors Edward Iacobucci and Michael Tre- bilcock and commissioned for a law society symposium in October 2013 that made it clear that less innovation happens when people are unable to spread the risk. "For substantial technological innova- tion, look at the amounts invested in Silicon Valley. Small to mid-size firms, and even large firms have no prospect of raising that sort of capital, and it is not sensible for an investor to invest that sort of capital through small practices. If legal practices are con- strained to professional consultancies, with only lawyers in charge and lawyers invest- ing, legal services will necessarily be pro- vided by small firms that are not very tech- nologically advanced." is concept is a further step along from multidisciplinary partnerships where only professionals providing ser- vices to clients can be partners. "In an MDP, a family lawyer can partner with a social worker and a psychologist, but a soware engineer providing internal ser- vices couldn't be a partner," says Mercer. "In an MDP, lawyers have to be in charge. In a truer partnership, all partners partici- pate in the decision-making. ere would be regulations to provide that all services are provided to the ethical standard, but a law- yer would just be in charge of legal services." Both reports point to precedents for change in jurisdictions such as Australia in 2000 and England and Wales in 2007. ose changes allow incorporated legal practices in which anyone can invest with Australian law firm Slater & Gordon being listed on the stock ex- change in 2007. Its prospectus clearly stated the firm's first duty was to the court, its second duty was to clients, and its third duty was to shareholders. "It's interesting that in Australia, al- lowing alternate business structures has not actually resulted in a dramatic change in the way legal services are delivered," says Heins. "e world did not come to an end. e moral code of lawyers is not in disarray. It still re- mains a regulated profession." He confirms there's no discussion or contemplation of deregulating Ca- nadian legal services. "e question is how can you marry the duty of the lawyer to the client within more flex- ible business structures and service delivery models?" Mercer notes there has been a clear technological advantage from the changes overseas. e English Legal Services Board has found alternative business structures are much more likely to use technology in com- parison to other providers, he says. ere are also perceived advantages from the perspective of the public. "Access to justice is a significant concern of society and the law society," says Mercer. "ere is a substantial range of le- gal problems that people don't seek help about. A significant aspect of alternate business structures and technological in- novation is to provide access to the public to legal services at a price that makes it sensible for people to use them." In the meantime, the debate will contin- ue over the next year. "ere will always be some on the fringes who will say it's the end of the profession as we know it," says Heins. "e question is: Where does the majority lie? What is the sensible view?" For his part, Mercer looks forward to the debate. "It's clear a discussion needs to take place. A number of important ideas are in play that many people haven't spent much time thinking about. It's important that the profession works through those issues." LT 'A number of important ideas are in play that many people haven't spent much time thinking about,' says Malcolm Mercer. BY JuDY VAn RHIJn For Law Times T New guidance on advertising claims Light penalty for Rogers as Chatr statement found to be true hile Rogers Communications Inc. got a slap on the wrist for insufficient test- ing prior to launching its Chatr wireless network advertising campaign, the tele- communications bar has received a generous serving of new law from the Competition Bureau's case against the carrier. Given that the court found the misleading advertising regime introduced in 2009 to be constitu- tional, lawyers find themselves on more stable ground in issuing advice. John Lawford, executive director and general counsel for the Public Advocacy Interest Centre, compares the decision to a glass half full. "We are pleased with the consumer protection measures that survived the deci- sion. Our view is that it's half a win and half a loss." James Bunting and Sean Campbell of Davies Ward Phillips & Vineberg LLP, who represented Rogers, made their constitutional challenge on two grounds. First, they argued administrative monetary penalties of up to $10 million were so high as to make them crimi- nal in nature without the resulting legal and procedural protections. e second ground targeted mandatory testing for performance-based claims, something they argued would be onerous on the advertiser and in- fringe the right to freedom of expression under s. 2(b) of the Charter of Rights and Freedoms. "You could ban what turned out to be an entirely true statement," says Bunting. Lawford notes the court threw out the argument that the penalties were so big that they were criminal in nature. "e $10-million upper limit survived and con- tinues on as a good deterrent. at's good for consumer protection." e court decided the second challenge by finding that testing is necessary when a company makes comparative statements such as Rogers' claim that the Chatr brand had fewer dropped calls than its competitors. e decision also gave specific attention to the timing of those tests. BY JuDY VAn RHIJn For Law Times W See Technical, page 11

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