Canada Joins US in Legal Services Ownership Tests for Non-Lawyers


Two of Canada’s largest provinces are testing new ways of providing legal services, joining a growing push in the United States to experiment with approaches such as letting lay people own law firms.

Ontario and British Columbia follow the Utah model, which collects transaction data, including Rocket Lawyer, which helps people draft wills, leases and other documents through an online platform . The Utah test also includes companies that help settle medical debts and offer AI-enabled contract drafting tools.

Canada’s decision reinforces the idea that a wider range of legal service delivery models will resolve an access to justice crisis in both countries and accelerate the development of legal technology as a tool to help bridge the gap .

“The imperative is the same in Canada as in the United States,” said Gillian Hadfield, professor of law at the University of Toronto, in a written statement. “The access to justice crisis is global.

The British Columbia program includes a half a dozen paralegals with increased authority to provide a range of legal services. One, for example, will operate an online digital platform to help residents create wills and powers of attorney, and another will provide an online lawyer referral service.

“The bonus of Canadian provinces joining the process is that it can increase the potential scale of any new technology,” said Hadfield. “Scaling up is the key to reducing costs and improving access. “

Like a rocket

The Utah Supreme Court approved in August 2020 the state program that understand over two dozen entities, ranging from small consumer and family law operations to Rocket Lawyer, with over 250 employees.

The first Canadian province to follow Utah’s lead was British Columbia, which launched its own experiment, or “sandbox,” last December. The province has made two separate regulatory changes that allow the participation of individuals, businesses and law firms who wish to explore new technologies and business structures.

“If you think you can do things that would increase access, let’s have this conversation,” said Lesley Small, senior director of credentials, professional development and practice support for the Law Society of British Columbia.

Craig Ferris, who served as president of the Law Society of British Columbia in 2020, said he was “ecstatic” to help move the agenda forward during the pandemic. He said he hoped there could be a symbiotic effect with the approval of the sandbox in Ontario, Canada’s largest province, and experiments underway in the United States, possibly including in California.

“Would I like to see 100 more proposals?” Yes, ”Ferris said. “The more the jurisdictions are open to this, maybe it will become more attractive to big companies and businesses.”

Ontario is following suit

Canadian regulations, like those in the United States, limit the ability of non-lawyers to co-own legal operations, so legal reformers have sought a sandbox as a way to convince traditionalists that new delivery models protect the public.

Sandboxes allow law societies – Canadian provincial groups that have roughly the same regulatory power as state bars in the United States – “to relax the regulations to try something new in a controlled environment.” University of Ottawa law professor Amy Salyzyn said in a written statement.

“Overall, we need bars to move away from justifying regulations on the basis of ‘This is just the way we’ve always done it” and towards evidence-based and proportionate regulation. risks, ”Salyzyn said.

Ontario officials agreed. Province approved a five-year sandbox in April and will begin accepting applications later this year.

Officials were “in fairly constant communication” with residents of Utah to compare their scores, said Jacqueline Horvat, chair of the Law Society of Ontario’s technology task force.

Ontario has the most lawyers of any Canadian province and has the most robust legal technology sector, including start-ups in and around Toronto.

Horvat said reformers are excited about how technology can be harnessed through the sandbox to create better access to legal services. One advantage of the experiment is that officials make sure the technology is working properly before releasing it to legal consumers, she said.

California’s next stop

The momentum for sandbox programs in the United States has been building for several years. New York, Illinois, Connecticut, North Carolina and Florida are starting to consider changes to the legal system rules that could give businesses more opportunities to compete with law firms through sandboxes or similar structures. Washington State is the most recent to be added to this list.

Arizona took a somewhat different course a year ago, when its Supreme Court struck down state ethics rule 5.4., Which prohibited laypersons from having economic interests in law firms. ‘lawyers. Yet most states considering change are more likely to go the sandbox route, allowing them to move more incrementally while keeping consumer protection front and center.

A California State Bar task force appears to be furthest along towards a new sandbox. His next step would be to send a proposal to the Bar’s Board of Directors.

Whether in the United States or Canada, a proliferation of sandboxes could have several unintended positive consequences, said Jordan Furlong, a Canadian-based legal industry analyst. For example, sandbox admins may wish to broaden their mandates so that they can work with legal tech startups as “incubators” to proactively help develop their tools, he said.

“There is an opportunity here to train, to develop, to say ‘We’re going to help you improve at what you do,’” said Furlong.

About five years ago, Ontario raised the possibility of an experiment, but a number of personal injury lawyers vehemently opposed it and nothing came of it, Horvat said. .

“What’s exciting,” she said, “now is the time we’re finally going to see what becomes of it.”

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