Law Society limits referral fees and strengthens advertising rules in the public interest

The Law Society’s governing body, Convocation, agreed to cap and further regulate the fees a lawyer or paralegal may charge for referring a client to another licensee. A cap on referral fees was approved in principle. Rule amendments to implement the policy, and related proposals for additional requirements to increase transparency in marketing and to ensure genuine consent in referral fee arrangements will be considered by Convocation in the coming months.

At its meeting today, Convocation also approved amendments to strengthen the rules governing the advertising of legal services, adding new public protection measures.

Among the advertising rule amendments are:

  • the addition of clear direction on the appropriate use of awards in advertising and;
  • a requirement for licensees to identify whether they are a lawyer or paralegal in their marketing.

“With these changes, the Law Society is establishing new and stronger measures to protect the public. Capping referral fees and taking steps to make certain the client is fully aware of their options will ensure that it is the client who benefits from the referral,” says Law Society Treasurer Paul B. Schabas.

“The new advertising requirements reinforce the core principles that advertising must be demonstrably true, accurate and verifiable,” says Malcolm Mercer, chair of the Law Society’s Advertising and Fee Arrangements Issues Working Group.

The rule and policy changes were recommended by the Advertising and Fee Arrangements Issues Working Group, which was established in February 2016 in response to growing concerns about practices that appeared to be misleading and detrimental to clients. In addition to developing recommendations to implement the referral fee cap, the Working Group will continue to consider contingency fee arrangements, and advertising and fees in real estate.

“A great deal of work went into the development of these public protection policies,” says Schabas. “I commend the Working Group for their dedicated effort. I also thank the many lawyers, paralegals and members of the public who shared their views.”

“We will continue to monitor lawyer and paralegal activity in this area, and our enforcement, to ensure Ontarians are well-served and the public interest is paramount,” continued Schabas.

“Lawyers and paralegals are expected to follow the Rules of Conduct,” said Law Society Chief Executive Officer, Robert Lapper, Q.C.  “In the event that the Rules are not followed, the Law Society will vigorously investigate and take appropriate regulatory action.”

A fact sheet and further information is available on the Law Society website at www.lsuc.on.ca/advertising-fee-arrangements.

The Law Society of Upper Canada is the governing body for more than 50,000 lawyers and 8,000 paralegals in the province of Ontario, Canada. The mandate of the Law Society is to govern the legal profession in the public interest by upholding the independence, integrity and honour of the legal profession for the purpose of advancing the cause of justice and the rule of law.

SOURCE The Law Society of Upper Canada