Legal Profession

Referral Fees – What you should know

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[Reprinted with permission from the October 2018 edition of Communiqué, by Darcia Senft, General Counsel , Director of Policy and Ethics at the Law Society of Manitoba.]

From time to time, we receive questions about fee referral “pitches” and whether such fees can be paid and received without causing a lawyer to act in breach of the rules set out in the Code of Professional Conduct.

The Code has rules and commentaries that relate to the division of fees and referral fees. Rule 3.6-7 specifically prohibits a lawyer from directly or indirectly sharing, splitting, or dividing his or her fees with any person who is not a lawyer and from giving any financial or other reward for the referral of clients or client matters to any person who is not a lawyer.

From time to time lawyers receive telephone calls or emails from individuals who indicate that they want to help increase the number of new cases that the lawyer takes on. For example, a caller explains that his company will provide contact information to potential clients in whatever practice area or geographic area that the lawyer selects. It is not a directory service but some form of customized referral process that relies upon the company’s technology. When asked how the company makes money from the proposed referral process, the lawyer is told that he will be required to pay a flat fee each month to the company although they will not charge a fee for each referral. The caller is from another jurisdiction and is not a Manitoba lawyer. Under the circumstances, the proposed payment system would amount to a referral scheme that no Manitoba lawyer could participate in without breaching the referenced Code referral fee rules. If you have become involved in this kind of an arrangement, you should revisit it in light of the Code restrictions.

Certain types of referral fee payments are allowed. With the exception of referrals as a result of conflicts, Rule 3.6-6 allows a lawyer who refers a matter to another lawyer because of the expertise and ability of the other lawyer to handle the matter to receive a referral fee but there are a couple of conditions that must be met. First, the fee itself must be reasonable. Second, the client must be informed about it and must consent to its payment. You might wonder what a “reasonable” fee might look like. You might also wonder why the Law Society would even care about a referral fee arrangement where the client consents.
Consider the following situation. A lawyer who does not practise in the area of family law at all meets with one of his long-standing clients who now needs a divorce. The lawyer says he doesn’t practise in that area but can make a referral to a lawyer in another firm who does this work. The lawyer who accepts the domestic retainer agrees to pay 15% of all fees generated back to the lawyer who made the referral. The domestic case may take several years to complete and the client may end up paying in excess of $40,000 to the family law lawyer. Would it be reasonable for the referring lawyer to receive $6,000 in fees simply for making the initial referral? Even if the client purportedly “consents” to the referral fee, at the beginning of a retainer the client would have no idea how much the referring lawyer ultimately will be paid. How could consent, under those circumstances, be described as “informed?” What would the client say if he knew that in order for the domestic lawyer to keep up those anticipated long-term referral payments, she had to charge a higher hourly rate?

Where the Code allows payment of a referral fee from one counsel to another, it stands to reason that the fee must be fully known (i.e. quantifiable) in order for the client to provide informed consent. Before considering any kind of division of fees or fee referral payments, consult the Code and please call us if you have any questions about whether the contemplated arrangement is appropriate having regard to your ethical obligations.

Legal Services Task Team Final Report Released

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By Barbra Bailey, Policy Counsel
Law Society of Saskatchewan

The Legal Services Task Team was appointed in 2017 as a joint initiative of the Ministry of Justice and the Law Society of Saskatchewan to examine whether service providers other than lawyers should be permitted to provide some legal services in Saskatchewan.

The Task Team has completed its work and released its final report.  The report includes a number of recommendations on how to improve the regulation and provision of legal services in the province.

The recommendations include:

  • providing greater clarity to service providers about what legal services are regulated;
  • expanding the list of exceptions to the prohibition against practicing law to recognize existing service providers;
  • providing the Law Society with licensing authority to allow service providers to practice law with a limited license on a case-by-case basis;
  • modernizing the legislation regulating legal services to provide more flexibility for future developments in this area;
  • creating guidelines to help educate the public about legal services; and
  • conducting pilot projects to help develop and test the recommendations.

The final report can be found here.

The report is now under the consideration of the Minister of Justice and the Benchers of the Law Society of Saskatchewan.  Members are encouraged to contact Benchers or Law Society Administration if they have comments on the recommendations.  The Benchers will be discussing the recommendations at the September 14th Convocation meeting in Regina.

Supporting Women in Private Practice

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By Barbra Bailey, Policy Counsel
Law Society of Saskatchewan

The cover story for the summer 2018 issue of the CBA National magazine is entitled “Why women leave,” and examines what they describe as a “perennial problem” for the legal profession – women lawyers aren’t staying in private practice.  Saskatchewan’s demographics are not unlike those of the rest of Canada: although a recent study conducted at the University of Saskatchewan revealed that 49% of law students are women, only 37% of the active lawyers in Saskatchewan are women.  Further, of those women, only 53% are in private practice, as compared to 71% of male lawyers.

In recognition of these statistics, the Law Society launched the Saskatchewan Justicia Project in 2014, which began with a survey of the profession about workplace policies and practices for lawyer retention and advancement.  Respondents to the survey felt that there was a need for more mentorship and professional development opportunities for new lawyers, particularly women, as well as a need for more support for parental leaves and flexible working arrangements.  The survey also revealed a high incidence of sexual discrimination and harassment in the legal profession, with 48% of women reporting having experienced sexual discrimination (being denied professional opportunities) in a legal workplace and 25% having experienced sexual harassment.

In response to these findings, volunteers from several Saskatchewan firms worked together to create resources for firms to help with the retention and advancement of women lawyers, focusing on flexible work arrangements, parental leave and mentorship.  All Saskatchewan firms and other legal workplaces are encouraged to review the guidelines and model policies on the Law Society website and consider implementing parts or all of them.  Firms that commit to either implement the materials developed by the Saskatchewan Justicia Project or review their existing policies to ensure that they are substantially similar to the  model policies developed by the Saskatchewan Justicia Project will be permitted to identify themselves as Justicia Firms. For more information, please visit our website.

These resources are only one part of the solution; the CBA article points to many other considerations to help firms develop a workplace culture that fosters success for all lawyers.


SLIA Insurance Renewal

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From Saskatchewan Lawyers’ Insurance Association Inc.

The insurance levy for the 2018-2019 policy year was recently set by the Benchers at $1,093.00 plus GST and PST per assessible member for a total of $1,163.85. The levy amount is a 14.6% reduction from last year and provides for the mandatory $1 million coverage for members and for the new additional coverage for cyber liability insurance. Our levy continues to be one of the lowest in the country. The credit for the continuing low levy has many sources, including good corporate management, our sound financial position, dedicated oversight by your Bencher Insurance Committee and continued due diligence by all Law Society of Saskatchewan members with a view to limiting the number of insurance claims.

The SLIA Insurance Assessment renewal package will be emailed to all insured members next week.

Mental Health Week 2018 #4

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By Melanie Hodges Neufeld

The Canadian Mental Health Association – Saskatchewan Division website has numerous resources to help people stay mentally fit and healthy. Topics include:

The website also contains information on Mental Health in the Workplace – a topic of particular interest to our members. This page includes information on How do mental illnesses impact workers and workplaces? and How can I help a co-worker?

Please check out these resources or any of the resources we’ve highlighted this week if you have any mental health concerns about yourself or a co-worker.

[Originally posted on May 4, 2017]

Mental Health Week 2018 #3

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By Brad D. Hunter, Q.C.
Director of Insurance, Saskatchewan Lawyers’ Insurance Association (SLIA)

Lawyers Concerned for Lawyers – What Happens When You Call?

Mental Health Week is an annual national event that takes place during the first week in May to encourage discussion about mental health. During this week, the Law Society of Saskatchewan will be providing mental health  information to assist our members. This article first appeared in our spring edition of the Benchers’ Digest with the theme Mental Health: Struggles and Successes.

As mentioned earlier in this issue, Lawyers Concerned for Lawyers (LCL) is a free, confidential assistance program for Saskatchewan lawyers, judges, law students and their immediate families. SLIA oversees the contract with third party provider, Homewood Human Solutions, who manage LCL’s program and remains LCL’s referrals coordinator and administrator for professional counseling services. Client contacts are made directly to Homewood Human Solutions 24 hours per day, 7 days per week for immediate confidential assistance. Clients are generally provided up to five (5) free consultations, unless otherwise approved.

When a call is placed for assistance, callers are immediately directed to one of three intake centres in Vancouver, Guelph and Montreal. The caller is routed to the first available person to address the caller’s initial inquiry. The clinicians who deal with the initial inquiry are fully qualified and they triage the inquiry to determine whether it is a crisis situation requiring immediate assistance or whether it is a non-emergent inquiry. The clinician will take down the identification information for the caller to ensure that Homewood Health knows who the caller is, where they reside and where they work. However, that information is strictly confidential.

The clinician will then discuss with the caller what problem the caller is presenting with and what assistance they might require. The caller is also asked whether they have a preferred modality of counseling, being either a phone call from a designated clinician or a face-to-face meeting with a clinician. The caller is also asked for dates that he or she would be available for the initial meeting with the clinician. Depending on the issue that the caller is presenting and the availability of clinicians in the area in which the caller resides, a face-to-face meeting is typically set up within 3 business days. If it is a crisis situation, the intake clinician will refer the caller immediately to a treating clinician by way of telephone consult.

All of the clinicians employed by Homewood Health and their referral clinicians must have a masters degree and be licensed by the appropriate regulatory body. They must also have 5 years of post-education clinical experience. Callers are allowed to indicate a preference for a particular clinician in their area and if that clinician is part of the Homewood Health network and qualified to provide counselling in the area required then the caller will be linked up with that clinician.

The only individuals that have access to the confidential information provided by Homewood Health and its clinicians are the clinician and the Regional Clinical Manager. All of the information is contained on Homewood’s clinical portal and no paper copies are in existence. The confidentiality of the callers identification and problem is paramount to Homewood Health. Neither the Law Society of Saskatchewan nor Saskatchewan Lawyers’ Insurance Association have access to Homewood’s files.

Originally published in Benchers’ Digest, Spring 2018

Mental Health Week 2018 #2

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By Ronni Nordal
Bencher, Law Society of Saskatchewan

Understanding mental health issues among lawyers

Mental Health Week is an annual national event that takes place during the first week in May to encourage discussion about mental health. During this week, the Law Society of Saskatchewan will be providing mental health  information to assist our members. This article first appeared in our spring edition of the Benchers’ Digest with the theme Mental Health: Struggles and Successes.

Teenagers often will try things that put them at great risk, as they believe they are invincible – until tragedy strikes. While as lawyers we can clearly see the teenagers thought process as irrational, I suggest, we are equally irrational when it comes to our approach to mental health – lawyers think “it won’t happen to me” or “I am just fine”.

Within our profession, just as within society in general, a significant percentage have suffered, or will suffer from a mental health illness. The Canadian Mental Health Association quotes some stark statistics:

Who is affected?

  • Mental illness indirectly affects all Canadians at some time through a family member, friend or colleague.
  • In any given year, 1 in 5 people in Canada will personally experience a mental health problem or illness.
  • Mental illness affects people of all ages, education, income levels, and cultures.
  • Approximately 8% of adults will experience major depression at some time in their lives.
  • About 1% of Canadians will experience bipolar disorder (or “manic depression”).

How common is it?

  • By age 40, about 50% of the population will have or have had a mental illness.
  • Schizophrenia affects 1% of the Canadian population.
  • Anxiety disorders affect 5% of the household population, causing mild to severe impairment.
  • Suicide accounts for 24% of all deaths among 15-24 year olds and 16% among 25-44 year olds.
  • Suicide is one of the leading causes of death in both men and women from adolescence to middle age.
  • The mortality rate due to suicide among men is four times the rate among women.

As members of the legal profession, we are expected to be confident, tough and always ready to zealously advocate on behalf of our clients. To admit we are struggling creates a vulnerability that simply is at odds with the perception of what a lawyer “should be”.

The reality is that lawyers are often zealously advocating on behalf of their clients while, at the same time, dealing with their own mental health illness. The fact a lawyer has a mental health illness does not define the lawyer, nor does it mean he/she cannot/should not continue to practice law. Rather, just like any physical disease, when a lawyer has a mental health illness he/she must seek treatment, and follow the treatment plan, in order to get healthy and remain healthy.

The first step, as always, is to accept there is a problem. The fact is, a lawyer is more likely to have an addiction or depression related illness than a member of the general public, including other professionals.

A 2016 study, funded by the ABA and Hazelden Betty Ford Foundation, published in the Journal of Addiction Medicine indicated that alcohol consumption was a problem for lawyers at a rate between two and three times higher than other professionals.

Patrick Krill, an attorney and former Director of the Hazelden Betty Ford Foundation Legal Professionals Program recently presented to lawyers and students at a Law Society of Upper Canada professional development session and indicated that American lawyers suffer from depression at a rate about three times that of members of society in general.

I suggest the U.S – Canada border has nothing to do with the rate of depression among lawyers and rather the increased presence of addiction and mental health illness in lawyers is directly tied to the legal profession itself.

As a profession we need to remove the stigma. Lawyers are not better than anyone else in society – we are all human beings that put our socks on one leg at a time. We are vulnerable and are not invincible – and sometimes we need help – it is time to accept that and in doing so, once we, as lawyers feel comfortable to ask for help – that help needs to be available.

By its very nature, the practice of law can be adversarial. In an adversarial system any show of vulnerability can be perceived as weakness but perception is not always accurate. Vulnerability can actually be a sign of strength as it shows the lawyer is honest and aware and recognizes where she/he may be struggling or many need help. Asking for help is a sign of strength, not weakness. The question then turns to the response given to the request for help.

When a lawyer does ask for help, his/her colleagues and his/her regulatory body (in our case, the Law Society of Saskatchewan) need to be there and ready to offer assistance, not judgement and certainly not the risk of punitive consequences.

Think about having a conversation with a colleague who tells you they are struggling with getting out of bed and going to the office; are having panic attacks when thinking of going into a trial setting; and of recently breaking down in tears at their desk. What is your reaction? It should be no different than if that colleague told you they have been short of breath and having sharp pains in their chest when going up the stairs – both indicate a likelihood of illness; both call for your support; and both call for you to suggest seeking professional assistance.

Early in my legal career I was aware of a lawyer who was struggling with significant mental health issues that were affecting the practice and potentially putting clients at risk. That lawyer did not disclose to the Law Society, and other members who were aware, also did not disclose. Rather, other lawyers made themselves available to ensure clients were not at risk and the lawyer could seek the help needed to get better and return to practice. I remember the situation well and I remember that the consensus was that any type of disclosure would cause punitive sanctions rather than supportive ones.

The role of the Law Society is key. If I fear reprisal or that my right to practice law will be unfairly affected, I will not disclose my struggles which, in turn will leave my clients at risk. However, if I feel assured that the response of my regulatory body will be the same no matter whether the illness affecting my ability to practice is physical or mental – I will be more likely to disclose. The response needs to be supportive; nonjudgmental and confidential and needs to be proportional.

Lawyers Concerned for Lawyers (LCL) is a free, confidential assistance program for Saskatchewan lawyers, judges, law students and their immediate families. SLIA oversees the contract with third party provider, Homewood Human Solutions, which manages LCL’s program and remains LCL’s referrals coordinator and administrator for professional counseling services. Client contacts are made directly to Homewood Human Solutions 24 hours-per-day, 7 days-per-week for immediate confidential assistance.

Homewood Human Solutions maintains confidential records, reports by reference only to client numbers, and is careful not to reveal any details that might inadvertently identify a specific client. At no time are any details made available to either the Law Society or SLIA which would tend to disclose the nature of the engagement with Homewood or the identity of the party using the service.

SLIA only receives aggregate statistics which provide information about usage of the program and in what areas to assist in the development of further programming for the benefit of its members. If you or a loved one have issues, our only concern is to see that you receive the help that will support your journey to wellness.

The Law Society also has a number of systems which it can recommend/input to assist members who are dealing with health issues of many sorts, to provide support to lawyers and protection to their clients when they are experiencing difficulty in maintaining their practice:

  • With the requirement that every member have a succession plan in place, the successor may be willing/able to provide support and assistance to the member during a difficult period.
  • Law Society Practice Advisors can be assigned to meet with the member to review their practice circumstances and recommend changes that can be made/supports that may be put in place to assist the member with continuing to practice safely.
  • Members, with facilitation by the Law Society, have entered into supervision arrangements with supervising members agreeing to establish and maintain a relationship with the member for a period of time, agreeing to meet with them regularly and provide support assistance and oversight.
  • The Locum Program and Registry was established by the Law Society to provide a conduit between members who are willing to provide temporary paid coverage and/or work support to members who may need to be away from their practice for a short period of time. While there are currently few members listed in the registry, helpful materials are also available on the Law Society website that may be used to safely and efficiently establish a temporary locum relationship between two willing and interested practitioners.
  • Finally, in the unfortunate event that a member is unable to continue with their practice, or must take an indefinite absence from their practice, and the member’s successor is unable to assume responsibility for the entire practice, the Law Society has the ability to seek an order appointing a Trustee to oversee and potentially wind up the practice in a way that protects the interests of the member’s clients.

It is now 2018 – and it is time for lawyers to be comfortable with the fact many of us will have a mental health illness – it is time to recognize that lawyers can get the help they need to deal with their mental health illness, just as they would with any physical illness – and that stigma and judgment are the real problems and what is holding many back from speaking out and seeking help.

Originally published in Benchers’ Digest, Spring 2018