Law Society of Upper Canada Currently Reviewing Referral Fees and Advertising Rules for Lawyers

On February 23, the Law Society of Upper Canada released a Fact sheet that discussed the new referral fee policy. The Convocation agreed that in addition to further strengthening advertising rules for lawyers there was also a need to establishing a cap on lawyer and/or paralegal referral fees.

While nothing has been finalized, the Working Group will return to Convocation in the near future with recommendations as to what the cap amount should be along with additional requirements for lawyers to increase transparency in their marketing and adverting efforts to ensure proper consent from clients with respect to referral fee arrangements.

Capping Referral Fee

In an effort to enforce transparency and proportionality in referral fee arrangements, the Law Society of Upper Canada is aiming to set a limit on the amount that can be charged for referrals and enforcing requirements to ensure that clients fully understand the process. In principle, this would ensure that clients would stay informed on the arrangements as well as have an opportunity to carefully consider referrals to the lawyer or paralegal best suited to assist them. The new regulatory framework would include:

• The amount at which referral fees will be capped;
• Enforce additional measures such as:
  • Lawyers being clear in their advertising as to whether they will be performing the legal services;
  • Ensuring standard referral agreements are signed by the client which would include having the referring licensee and licensee accepting and signing the agreement; and
  • Ensuring that clients are provided with more than one choice of lawyer or paralegal in the referral.

New Advertising Requirements

In an effort to instill new public protection measures, the Convocation also strengthened rules related to advertising legal services. Here is a summary of the newly proposed amendments:

• Amendments and further clarification is required with regards to the type of awards that may be used for marketing purposes including what types of awards are permitted and prohibited;
• Having a license in place for identification purposes in advertising that would indicate if individuals are lawyers or paralegals. This would ultimately allow the public to make a more informed choice of legal service provider;
• Enforce the prohibition of advertising of second opinion services. The Working Group found that the public is informed enough on the right to seek a second opinion and that advertising of this service should not be required; and
• Explicitly indicate what lawyers and paralegals may not advertise with regards to the work that they are not licensed, competent or intend to do.

More information on the Fact Sheet dated February 23th, 2017 can be found here: https://www.lsuc.on.ca/uploadedFiles/Advertising-and-Fees-Fact-Sheet-CAP.pdf