Law Times

Page 2 aPRIL 20, 2015 • LaW TIMeS www.lawtimesnews.com NEWS ABS firm's expansion offers new fodder for Ontario debate BY JULIUS MELNITZER For Law Times he recent news that Aus- tralia's Slater & Gordon, the world's first publicly listed law firm, was buy- ing the professional services arm of the British insurance claims processor Quindell for the equiv- alent of $1.16 billion is bound to give Ontario opponents of alter- native business structures plenty of grist for the mill. Just as disconcerting to them, if not more, is the news that Slater & Gordon raised $567 million of the purchase price just three days after issuing some 95.5 million new shares. Among the assets acquired by Slater & Gordon are 53,000 indus- trial disease cases. "So all of a sudden, 53,000 cli- ents are being forced to move from Quindell to Slater & Gordon," says Patrick Brown of McLeish Orlan- do LLP, a plaintiffs' personal inju- ry boutique in Toronto. "If access to justice means being handled in this way, it's certainly not service- based access to justice." Ontario's personal injury bar has been especially vocal in its op- position to the idea of alternative business structures. Plaintiffs' lawyers maintain it will lead to the evisceration of the independent firms practising in the area. "Slater & Gordon is looking at coming to Canada if and when we get ABS here," said Brown in an earlier interview. "If they do, there's no way even a successful [personal injury] firm like ours can compete with an or- ganization that has hundreds of millions in revenue and probably $50 million for advertising." Indeed, with the Quindell deal, Slater & Gordon will increase its share of the $4.5-billion personal injury market in Britain to 12 per cent from the seven per cent it had already acquired since it entered the field in 2012. In less than three years, Slater & Gordon has become the sev- enth-largest international firm in Britain. Before the Quindell pur- chase, the firm had bought about one-quarter of Britain's personal injury practices. They generated some $180 million in revenue for Slater & Gordon in the 2013-14 financial year. Internationally, Slater & Gordon's personal injury practice generated some 80 per cent of the firm's $400 million in total revenue. "Both the plaintiff 's side and the insurance side are rapidly evolving to five or six firms domi- nating 75 to 80 per cent of the per- sonal injury market," says Tony Williams of Jomati Consultants LLP, a British-based legal consul- tancy. It's true that the 250 alterna- tive business structures that now exist in Britain represent less than 2.5 per cent of the roughly 10,000 law firms regulated by the Solici- tors Regulation Authority. But a report by the authority reveals that they had achieved "a signifi- cant share of the overall market" in certain areas of legal work. More particularly, alternative business structures accounted for a third of the revenue in the per- sonal injury market; captured a significant percentage of the rev- enue in mental-health matters as well as non-litigation files such as mergers and acquisitions, estates, and consumer and social welfare law; and were otherwise spread relatively evenly across a range of practice types. But Malcolm Mercer, who heads the Law Society of Upper Canada's task force on alternative business structures, says it's not a black-or-white issue. "What we're really trying to achieve is access to justice, which in itself does not seem to be a contentious goal," he says. "Within that spectrum, you can have both the fairly un- contentious idea of the Salvation Army providing legal services and the highly controversial idea of consolidating a sector of the le- gal market." As Mercer sees it, the jury is still out on consolidation in the profession. "There are people who argue that consolidation is a good thing and those who argue that it is not, but my perspective is that we don't have enough evidence yet to reach a conclusion," he says. "I think one of the reaso nable concerns about consolidation is that once an in- dustry consolidates, it's very hard to undo the consolidation." Still, there's much for Ontario's profession to learn from staying abreast of the experience with al- ternative business structures in Australia and Britain. "It's important to think clearly about which of the steps taken in those jurisdictions was reasonable and which were too speculative," says Mercer. "It may be that what we've learned from Australia and England is that Slater & Gordon is a very aggressive consolidator who might do the same thing here and it's far from clear that that's a good thing." There's another aspect to the Slater & Gordon transaction, however, that appears to have es- caped much notice. Quindell, the vendor, is itself an alternative business struc- ture. Initially, the business fo- cused on technology for the in- surance industry; currently, its legal division is 75 per cent of the business. At one point, Quindell was worth some $3.65 billion and claimed it was the largest listed law firm in the world. But its shares lost about 80 per cent of their value in 2014 and its Ca- nadian joint broker, Canaccord Genuity, ceased working with Quindell after the company be- came mired in scandal over its complex structure and aggres- sive accounting practices. LT 2015 Bencher Election – Voting Now Open Voting is now open in the Law Society of Upper Canada's bencher election. Forty lawyers will be elected as benchers to sit in Convocation. Information about the election, including access to the Voting Guide for information about the candidates, is available on the Law Society's website at www.lsuc.on.ca/bencher-election-2015 If you have not already received your voting instructions, you must contact Computershare, the company providing the online voting site, at 1-888-344-2805 (or 514-982-2391 if outside Canada or the United States) to receive this information to vote. Voting closes at 5:00 p.m. EDT on April 30, 2015. 2015 BENCHER ELECTION 2015 ÉLECTION DES MEMBRES DU CONSEIL www.lsuc.on.ca/election-conseillers-2015 www.lsuc.on.ca/bencher-election-2015 Élection du Conseil 2015 – le vote est ouvert Le vote est maintenant ouvert à l'élection du Conseil du Barreau du Haut-Canada. Quarante avocats et avocates seront élus conseillers et conseillères. Vous trouverez des renseignements sur l'élection, y compris sur l'accès au guide électoral pour les descriptions des candidats, sur le site Web du Barreau à www.lsuc.on.ca/election-conseillers-2015. Si vous n'avez pas encore reçu vos consignes de vote, vous devez contacter Computershare, la société indépendante gérant le site de vote, au 1 888 344-2805 (ou 514 982-2391 en dehors du Canada ou des États-Unis) pour les recevoir. Le vote prend fin à 17 h HAE le 30 avril 2015. Untitled-2 1 2015-04-08 9:40 AM App brings sharing economy to legal business BY YAMRI TADDESE Law Times here's now a smartphone application for lawyers running late to court or who can't make it at all. The creators of StandIn Law say looking for help in those panicky moments can be as easy as using an application on a smartphone. Much like Uber tracks down available cars in an area via global positioning system, StandIn Law shows lawyers who are free to stand in for others near courthouses. The lawyer looking for help would then contact counsel who's idle at that moment. StandIn Law is the brainchild of Andrew Johnston, who created the application as a law student at Michigan State University. "I did more and more research into solo and small practitioners, called lots of different people and two big issues always kept coming back: the issue of time, not having enough time, and also the issue of travel," says Johnston. Toronto lawyer Peter Carayiannis, founder of Conduit Law PC, is backing the idea. He and Johnston launched the beta phase of the application last week in Toronto and Detroit. The application is free to download. But when there's a transac- tion between lawyers, the person receiving the payment will pay a fixed fee of $7.50. "Whatever the stand-in stipulates, that's what the [paying] lawyer would see on their credit card," says Carayiannis. "In doing this, we really tried to take the best lessons we can take from other peer-to-peer apps and other elements of the sharing economy so that the person who is actually buying the service, they understand what their price is up front: full transparency, no secrets, no small print, no surprises at the end of the month," he adds. As to the question about trusting other counsel, Carayiannis says lawyers informally seek help from people they don't know all of the time. Others, however, aren't so sure about that. "It's hard enough for me to trust people who are very close to me, let alone an app," says Toronto defence lawyer Sean Robichaud. "Legal services aren't a car ride. It does matter what person takes you up and deals with it. Convenience can't override that profession- al obligation," he adds. "Lawyering can't be Uberized." LT T T 'I think one of the reasonable concerns about consolidation is that once an industry consolidates, it's very hard to undo the con- solidation,' says Malcolm Mercer.

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