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New process for law firms setting up in N.S.

|Written By donalee Moulton

For lawyers looking to hang out their shingle in Nova Scotia, the process has become longer, more involved and, according to the Nova Scotia Barristers’ Society, much better.

Until this year, establishing a new firm in the province required only that lawyers comply with the society’s trust account rules. However, new regulations under the Legal Profession Act introduced a significant development this year: Now, all new law firms in Nova Scotia must be registered before practising law and delivering legal services. 

Under the new requirements, the firm’s designated lawyer engages in a six- to eight-week process of meetings and discussions about the nature of their practice, their business structure and management system, relevant practice standards and regulatory obligations, including such critical issues as trust accounts and client identification. “It’s very much a hands-on process. We have a team that meets with lawyers,” says NSBS executive director Tilly Pillay.

These conversations allow the society to help ensure new firms have an effective management system for ethical legal practice in place and appreciate the complexities of running a law firm and their regulatory obligations. “Lawyers don’t learn this in law school,” notes Pillay.

To date, 17 law firms have received approval in 2017 to open their doors to clients, a number in keeping with previous years. The difference is with process, not demand. “It’s a sharing of information and the start of a conversation we hope will continue,” says Pillay.

Most of the new firms are small and many are carving out niche markets, which the NSBS welcomes. “That’s something we’re trying to support and encourage,” says Pillay. “It’s about innovation.”

The new firm registration process is the latest step in the regulator’s move to a model that emphasizes support, not punishment, she notes, and what better place to start offering that support than at the outset of a firm’s business. “Instead of getting someone mid-practice, we want to connect with lawyers from cradle to grave. This is the birth.”

Pillay believes that by becoming part of the way lawyers do business and offering support for their practice, lawyers will be less hesitant to reach out to the bar society when problems arise, when they have questions or when they have ideas to share.

The next phase in the society’s shift to a new regulatory model will involve touching base with law firms already up and running in the province. This will be followed by the next logical stage: reaching out to firms winding down and helping firms prepare for this. There is a financial incentive for the latter, notes Pillay. “On average, it costs $60,000 for a custodian if someone is needed to step in to close a firm.”