Legal Feeds Blog
NEW YORK — While tech disruption and innovation in the legal market is causing law firms and in-house departments a lot of pain as they try to adapt, no other one trend has been quite so vexing as recent political challenges including the new administration in Washington and the Brexit vote.
|ALM analyst Daniella Isaacson says political and economic disruption is number one issue for legal leaders.|
“What we consistently hear is that the impact of political and economic disruption is their single biggest concern,” said Daniella Isaacson, senior analyst with ALM Intelligence, who speaks regularly with managing partners, general counsel, vendors and consultants in the legal sphere.
Isaacson was speaking together with Nicholas Bruch, senior analyst also with ALM Intelligence, as part of the opening address to the Legaltech conference in New York City today.
Bruch said the biggest concerns for firms and in-house departments are around things they can’t control and regulations are just one big piece of that puzzle.
“If you look across the world, you see this very clearly if you look at the two biggest markets — the United States and the U.K. — what we see is uncertainty. I think it’s safe to say there is a lot of uncertainty over the new administration,” said Bruch, referring to the Trump presidency in Washington. “In the U.K., it’s Brexit that is driving it. We also see a similar story in the EU, in the Middle East and in future of U.S.-Asia trading.”
The global CEO of Dentons, Elliott Portnoy, who appeared in a video as part of the presentation, agreed that regulatory uncertainty is good for business but comes at a time when firms face many other challenges.
“The most consistent theme I hear from clients is that their greatest concern is regulatory uncertainty in key markets and that does create more work for our firm and others but comes at a tricky time for the industry,” he said.
Given this world of uncertainty is one in which law firms and increasingly many in-house legal departments live and work, and as lawyers are also risk managers, the state of the world should not be viewed as a threat but an opportunity to serve as advisers in difficult times.
“For law firms, it means more questions, more clients, more billable hours. For law departments, it’s an opportunity to showcase your abilities to the broader organization,” said Isaacson.
Portnoy said firms like Dentons need to be “far more nimble, far more agile in adopting the same innovation strategies that our clients are using.”
New competitors providing new services are also a threat — not just other law firms competing with each other but also in-house departments competing with law firms and service providers particularly who are creating something entirely different with artificial intelligence, blockchain and machine learning.
Bruch also noted that the in-house departments are also under pressure and are rapidly changing how they source services. There are companies leveraging non-lawyers, virtual lawyers and contract lawyers. ALM Intelligence data shows 80 per cent of law departments are in-sourcing more and 40 per cent are decreasing their use of law firms, while 70 per cent are increasing their use of alternative service providers.
Isaacson said firms can save millions by moving to shared service centres or from re-engineering staffing.
At an earlier session with ALM editors, top trends discussed included a move at some firms with regulatory practices taking on social media work for clients in a model that doesn’t require the staff involved to bill hours. This signals a move toward firms generating revenue in different ways and having to determine how partners take that revenue home.
Requests for proposals also continue to determine who gets work. Often defined as “Flintstone or Jetson” firms — those who demonstrate they are using technology and better understanding how a company works are winning over the Flintstone firms. In one instance, a firm lost a bid when it proposed addressing certain matters by going to trial even though the company had expressed no interest in arriving at a solution that way.
Analytics were also highlighted as a big driver for law firms this past year. There is also a trend toward consolidation in the e-discovery sector, while cloud technology has seen a slower adoption. It is expected that artificial intelligence will pick up speed in the next year or two.
Legaltech continues tomorrow and Thursday.
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Canadian lawyers will have important work ahead of them as a result of a controversial executive order by U.S. President Donald Trump, says Sukanya Pillay, executive director and general counsel of the Canadian Civil Liberties Association.
|Stephen Green says the divisiveness of policies introduced by the Trump administration creates an opportunity for Canadian employers looking for talented professionals.|
The executive order — released Jan. 27 — suspended the U.S. Refugee Admissions Program for 120 days. It also stops nationals from Yemen, Sudan, Libya, Somalia, Syria, Iran and Iraq from going into the United States for 90 days.
“I think Canadian lawyers have a lot of work ahead of them.
“One is the immediate response that we can provide to individuals who are going to be stranded at Canadian airports because they cannot board planes if they’re affected by this order,” says Pillay.
The CCLA is calling on the Canadian government to take eight steps in the wake of the order, including boosting the number of refugees accepted into the country and implementing procedures to take applications from asylum seekers impacted by the ban.
“When you have a powerful global actor professing isolationism, and flouting — appearing to flout — international law, even if it’s for only 90 days, it does set off repercussions that are very concerning,” she says.
Pillay says the CCLA is recommending that Canada suspend the U.S.-Canada Safe Third Country Agreement.
In 2002, the two countries signed the agreement, which sets out that “refugee claimants are required to request refugee protection in the first safe country they arrive in, unless they qualify for an exception to the Agreement.”
“[A]t this time, if the U.S. is willing to deport people who are fleeing persecution to the risk of human rights violations, then I think we have a legal and moral obligation to not abide by that agreement and allow any asylum seeker to make their claim here in Canada,” says Pillay.
Pillay also says there is also work ahead for corporate and commercial lawyers, as well as human rights and civil liberties lawyers, regarding bundled agreements between Canada and the United States.
“[I]n terms of intelligence sharing and alliances in the global counter-terror fight, we have numerous information-sharing agreements with the United States, and I think that it’s very important that we look at those information-sharing agreements immediately and we set clear limits on what we’re willing to share,” she says.
Stephen Green, senior partner at Green and Spiegel LLP, says he believes that the “divisiveness” of many policies of the Trump administration will push people out of the United States and from considering moving to the country.
“I think that the concept of multiculturalism of Canada is so successful in Canada, and that’s what draws so many people to come here and work, and move,” says Green.
Green says the move might create an opportunity for Canadian employers who specialize in areas such as IT, and it may be able to attract educated professionals from the seven affected countries who cannot extend their visas in the United States.
“We’ve seen a huge increase of very, very successful business people who do not like the Trump policies coming here to set up their businesses here, because they just don’t know what’s going to happen in the next four years with him,” he says.
Green says Canada should continue to accept asylum seekers.
“If these are asylum seekers that are coming from regimes like Iran and various other places, we should [accept them] absolutely,” says Green.
The executive order by Trump states that, “Deteriorating conditions in certain countries due to war, strife, disaster, and civil unrest increase the likelihood that terrorists will use any means possible to enter the United States.”
“In order to protect Americans, the United States must ensure that those admitted to this country do not bear hostile attitudes toward it and its founding principles,” it says. “The United States cannot, and should not, admit those who do not support the Constitution, or those who would place violent ideologies over American law.”
A judge has awarded a Saskatchewan law firm just $21,000 after it asked for $321,000 from the government for work it did representing residential school survivors in the settlement of a class action lawsuit.
In Fontaine v. Canada (Attorney General), Saskatchewan Queen’s Bench Justice Neil Gabrielson found the firm billed the government too much for work related to the Indian Residential Schools Settlement Agreement, a country-wide class action settlement which was approved about 10 years ago.
MacDermid Lamarsh brought a request for direction in 2016 after accounts submitted to the federal government went unpaid. The firm, which was one of 90 firms that represented class members, claimed $321,644 for work done relating to the IRSSA dating back to 2005.
The federal government disputed all of MacDermid Lamarsh's claim except $22,476 in fees for work done under s. 13.02 of the IRSSA, which held that the government agreed to pay lawyers who attended the negotiations for time spent up to the settlement at their normal hourly rate.
On top of the $22,476 it claimed under s. 13.02, the firm also sought $158,766 for work it conducted as counsel that it said was owed under section 13.03. This section held that the government must pay lawyers for work in respect of finalizing the agreement at their hourly rate.
The government argued that the fees the firm sought were excessive and that some of them pertained to work that was done outside of the time that was covered under s. 13.03.
The government also noted that if s. 13.03 actually covered the work the firm had claimed, the government potentially could be billed $13.5 million, if each of the 90 firms that were signatories in the settlement claimed $150,000.
“An obligation to pay each of the IRSSA’s legal counsel or law firm signatories what ML invoiced cannot be reconciled with the intention to confine finalization costs to a modest level,” the decision said.
Gabrielson found that s. 13.03 of the agreement was intended to compensate lawyers for the negotiations leading up to the settlement of the agreement.
“On the evidence, ML was not actively engaged in the negotiations, but has submitted accounts for work that consisted virtually entirely of receiving and reviewing documents,” he said in the decision.
MacDermid Lamarsh also sought $66,161 for costs incurred as a result of executing a 2006 order. The firm argued that the order obliged it to send notices to potential claimants letting them know about the order and of the settlement application, which the firm said the government is obliged to pay for.
Only two other firms had invoiced Canada for expense incurred in sending the notices, according to the decision. One of those firms was not paid, and the other was only paid $400 by the government for postage.
The government contended that once the firm wrote one letter of advice, it should not have needed to spend more time drafting additional letters.
MacDermid Lamarsh also claimed $74,239 for carrying out another 2006 order from later that year, which involved sending opt-out notices to potential claimants.
The judge determined that the firm should not be compensated for its correspondences with potential claimants, and that it should only receive payment for postage, which amounted to $636 for the letters after the first order and $726 for the second round. Gabrielson said the firm had sent out the second round of notices voluntarily without letting the government know it was being done.
The judge ruled MacDermin Lamarsh was entitled to fees claimed pursuant to s. 13.02, plus interest at a rate of five per cent a year, which brought the cost award to $21,534.
This was not the first time the fees law firms have charged in relation to the settlement have come into question. As Legal Feeds reported in 2014, a Manitoba judge ruled a number of lawyers had been overcharging residential school survivors for work related to collecting settlements from the government.
Nolan Courteau, a lawyer with MacDermid Lamarsh, did not immediately respond to a request for comment.
Alison Latimer of Underhill Boies Parker Gage & Latimer LLP, in Vancouver, who acted as lead counsel for the appellant, hailed the decision for providing clarity on election sponsorship.
|Alison Latimer of Underhill Boies Parker Gage & Latimer LLP, in Vancouver, who acted as lead counsel for the appellant, hailed the decision for providing clarity on election sponsorship.|
Bumper stickers, sandwich boards, pamphlets and handmade window signs expressing views on potential political issues in British Columbia do not require their creators or holders to register with British Columbia’s chief electoral officer under that province’s Election Act, the Supreme Court of Canada ruled today; however, “sponsors” of election advertising are required to register, no matter how little they may have spent on the advertising.
At issue in the case was the registration requirement that s. 239 of B.C.’s Election Act imposes on sponsors of election advertising. In 2009 and 2013, the B.C. Freedom of Information and Privacy Association sponsored election advertising, and was therefore subject to the registration requirement. The Association sought a declaration that the registration requirement, to the extent that it applied to sponsors of election advertising who spend less than $500 in a given campaign period.
In dismissing the appeal in B.C. Freedom of Information and Privacy Association v. Attorney General of British Columbia, the Supreme Court found that although the imposed registration requirement did limit sponsors’ right of expression as guaranteed by s. 2 of the Charter, the limit was justified under s. 1 and “the scope of the infringement is minimal.”
Writing for the court, Chief Justice Beverley McLachlin also found that “the [Election] Act does not catch small-scale election advertising” such as homemade window signs, bumper stickers or T-shirts with political slogans on them.
“By confining the registration requirement to sponsors and exempting individual political self-expression by persons who are not sponsors, s. 239 tailors the impingement on expression to what is required by the object of the Act,” the chief justice wrote, with Justices Michael Moldaver, Andromache Karakatsanis, Richard Wagner, Clément Gascon, Suzanne Côté and Russell Brown concurring.
Alison Latimer of Underhill, Boies Parker, Gage & Latimer LLP in Vancouver, who acted as lead counsel for the appellant, hailed the decision for providing clarity on election sponsorship.
“The chief electoral officer in B.C. has always said that [the requirements of] this Act applies to anyone expressing personal views,” Latimer told Legal Feeds; “the lower courts agreed. The Supreme Court ruled today that the law does not capture those activities. Individuals … can express their own views without registering” with B.C.’s chief electoral officer during an elections campaign.
“So, from our perspective, this is a really positive development for free speech in B.C., because it's a much narrower interpretation of the Act.”
Latimer also notes that this case turned in part on the concept of “sponsorship” of election advertising that exists in British Columbia.
Chief Justice McLachlin noted that Parliament had selected a quantitative threshold under the Canada Elections Act, while B.C. had opted for a qualitative one. Under the federal legislation, only third parties who incur election advertising expenses of a total amount of $500 must register, while in B.C. only third parties who “sponsor election advertising” need register.
“Each threshold is low, but each permits small-scale individual election advertising without registration,” she wrote.
Rob De Luca, staff lawyer for the Canadian Civil Liberties Association, an intervener in the case, suggests that privacy concerns remain from this decision. “The [B.C.] registration provision includes ‘sponsors’ who either pay for election advertising services or receive some benefit without paying for it,” he says. This might include someone who receives a number of hats with a political slogan on them, or someone who pays someone else to deliver flyers in their neighbourhood. As “sponsors,” these individuals might wish to remain anonymous, but would still be required to disclose their name and contact information to the chief electoral officer.
Individuals would then have the choice to either sponsor and publicly register their support for an issue, or not sponsor in order to maintain their anonymity, De Luca said.
In a published statement, the respondent Attorney General of British Columbia, Suzanne Anton, said:
“Today, the Supreme Court of Canada affirmed Election Act provisions requiring third-party sponsors of election advertising to register with the Chief Electoral Officer. … The Court accepted the Province’s position that the law is limited to sponsors who pay others for election advertising services or receive services free of charge as a contribution, and that it does not apply to those who wear political t-shirts, put up homemade signs, or other similar expression. …
“Our government believes that the B.C. electoral process should be fair, transparent and accountable – and this provision does just that.”
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Fasken Martineau DuMoulin LLP has partnered with professional services firm PwC Canada for the provision of e-discovery services, the firm announced today.
|Vera Toppings, partner in Fasken Martineau DuMoulin LLP's litigation and dispute resolution group, says efficient delivery of e-discovery services is ‘top-of-mind’ for law firms.|
Prior to the arrangement with PwC Canada, Faskens dealt with e-discovery on a “case-by-case” basis, which was often more costly and less efficient for clients.
“We would go to the market and solicit quotes from different providers, analyze them, then go back and forth with the providers, and then go back and forth to the client,” Toppings says.
“We were dealing every time with different people in the marketplace — sometimes you don’t have responses from everyone right away, or they aren’t able to provide all the same types of services you may want to be able to offer to the client,” says Toppings.
She notes the pairing is more of a contractual arrangement than a formal partnership.
The e-discovery services will be scalable to any level of client demand and will offer improved predictability of costs. Faskens clients will have access to PwC Canada’s specialists who can share e-discovery industry best practices.
This move follows McCarthy Tétrault LLP’s acquisition of Wortzmans earlier this month, and Toppings says if there seems to be a trend that’s fueling these moves, there’s a good reason for it.
“I think it’s an issue that’s front-of-mind for a lot of law firms,” she says, noting it’s becoming more necessary to be in “the best position possible” to provide these services to clients.
“The expectations on clients, and of course their counsel in guiding them through the process, are very high. I think for that reason lots of firms are thinking about what’s the best way that we can provide this service to our clients and ensure we are advising them and offering them the best options possible for navigating what has become a more complex, involved and risky proposition because the courts have really set high expectations for how these processes will be managed and for the consequences that can flow from doing it improperly.”
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