Law Times

Page 4 November 30, 2015 • Law Times www.lawtimesnews.com Budget documents suggest possible 'fee shock' LSUC vows to hold the line on member dues BY NEIL ETIENNE Law Times he Law Society of Up- per Canada benchers are through their first financial year with this fall's passing of Convocation's budget. The year's financial docket sees a small increase in revenue and funding over 2015 and holds lawyer and paralegal fees at 2015 levels with the intention to keep those stable through 2018. How- ever, the budget also gives some warning that capital levy re- quirements will need to be close- ly inspected annually so the levy requirements do not create a "fee shock" in 2019. LSUC CEO Rob Lapper says that any concerns over fee shock are minimal, but he adds that fees will be closely monitored as budget time approaches to see if keeping them level is a reasonable choice. He says forecasts toward the 2017-19 financial years of keeping those fees stable are defi- nite goals and adds that Convoca- tion will not be bound by those in any given year. "These assumptions as they go into out years are very much loose assumptions because we don't have a great deal of certain- ty about what might happen, but there is no major impact on our operations as we currently look at it to hold the fees," he says. "If Convocation wants to do new things or additional things, we'd have to show the impact of that on the fees and they'd [bench- ers] have some choices to make." According to the budget docu- ment, in 2014, $8 million was approved to finance a three-year technology upgrade plan for the LSUC that was to be completed by the end of 2016. Some of the IT projects will not be completed by the end of 2016, some were re- moved, and others came in under budget. In presenting the budget to Convocation, audit and finance committee co-chair Peter Wardel pointed out that about $4 million will remain unspent on those IT projects and will be available to meet any IT requirements until the 2018 budget year. He said the $4 million will otherwise be a significant factor in keeping fees stable through 2018, but he added it is an issue that will need to be looked at annually until then so as to not create a fee shock in 2019. He said in presenting the budget that if it appears capital require- ments will necessitate a signifi- cant increase in 2019, there will be an option of increasing the levy in 2017 and 2018, potentially with- out increasing the total annual fee for lawyers and paralegals. "We've projected out just for the sake of illustrating to Convo- cation just what holding the fees means based on our current pro- jections and none of that looks like it's anywhere near catastroph- ic or disastrous," Lapper says. The budget projects revenue and funding of $110,350,000, up from a little more than $107 mil- lion in 2015, but with expenses of just less than $111 million. That leaves an overall budget deficit of $340,000, which will be made up from the fund balances section of the budget. Wardel said to Convocation earlier this year that one of the main priorities was to keep fee costs as stable as possible. He said those fees, based on bud- get projections for 2017-18, should remain the same for the next few years, as more lawyers and paralegals begin to prac- tise. Annual fees for 2016 will remain at $1,866 for practising lawyers and $996 for practis- ing paralegals. Wardel pointed out that Ontario has managed to keep fee costs under control, and compared those to British Columbia, where the fees are $1,992 for lawyers, or Alberta's at $2,620 for lawyers. Wardel said 2016's budget is benefited by an increase of about 1,400 full-fee-paying-equivalent member lawyers and 350 para- legals, to a total of 39,500 and 5,050, respectively. One potential inf luence on being able to keep fees stable will be in the compensation fund that starts the 2016 year with a balance of $13.6 million, short of the LSUC policy to keep it at a minimal $16 million. The main reason it's short this year is due to two major defalcations in 2014, while the average value of routine claims remains at a little more than $2 million. The ap- proved budget will restore the fund to $16 million by the end of 2018. Lapper says the LSUC had two "extraordinarily large sets of claims" to impact that fund in 2014 and 2015, but he adds that the budget injection to the fund provides for additional defalca- tions and to bring it back up to its mandated levels in two years. "The amount that we've in- corporated into our 2016 bud- get [$700,000] to do that has no impact on the bottom line or our fees and we expect we'll be able to do something similar in those out years," Lapper says. "It is unlikely to have any material impact on our bottom line and little, if any, impact on our abil- ity to use capital." In general, Lapper says, the LSUC is operating very well financially and he's pleased they've been able to keep fees stable for the members without significant impacts to projects or the bottom line. "I'm really feeling good about the budget; it's not easy to achieve the maintaining of a solid bottom line without increasing fees," he says. "It in- volves a lot of work and rigorous internal discussions, but we're very proud we've been able to achieve that." LT NEWS and it's available to you 24 hours a day. s available y availabl y legal expertise? 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Untitled-5 1 2015-10-20 2:39 PM T 'I'm really feeling good about the budget,' says LSUC CEO Rob Lapper REGISTER ONLINE www.lexpert.ca/cpdcentre EXECUTIVE PROFESSIONAL DEVELOPMENT FULL DAY IN-CLASS PROGRAMS & LIVE WEBINARS E V E N T S For more information, please contact Lexpert® Events at 1-877-298-5868 or e-mail: register@lexpert.ca 3RD ANNUAL CONDUCTING EFFECTIVE WORKPLACE INVESTIGATIONS: JUST THE FACTS Toronto | November 10 7TH ANNUAL DEALING WITH THE LEASE: WHAT'S NEXT? 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