Photo credit: Katrina Tuliao/Flickr
Slater & Gordon Lawyers is an Australian multinational personal injury law firm which employs more than 2,500 people worldwide. In 2007, it became the first law firm in the world to be listed on a stock exchange, and in 2012 it entered the British market by acquiring several UK firms. Now Slater & Gordon is eyeing a move to Canada which would require regulators to change rules banning non-lawyers from owning law firms. The potential regulatory changes have prompted debate on the value of publicly owned law firms in both Canada and the United States.
While the Canadian Bar Association (CBA) has endorsed the exploration of Alternative Business Structures (ABS), which would allow firms to be listed on stock exchanges, a significant portion of the Canadian legal industry, including the Ontario Trial Lawyers Association (OTLA) opposes the reforms.
According to the Globe and Mail, supporters of the rule changes believe that “allowing law firms to attract capital from non-lawyers means they can use it to expand and provide innovative new legal services,” and that the “new services will help deal with the ‘access to justice’ problem, which sees many Canadians unable to afford a lawyer.”
However, critics have suggested that reforms would make lawyers answerable first to their shareholders and second to their clients, which could generate ethical and conflict-of-interest issues.
Detractors also believe the changes would mean less choice for clients seeking a personal injury law firm.
“If the model that we have seen in the U.K. and Australia progresses, it will absolutely mean fewer choices for the consumer,” OTLA president Maia Bent told the Globe and Mail. “The choice that you have is going to be a much more cookie-cutter, assembly-line type of legal service.”
However, with or without regulatory changes, Slater & Gordon’s hopes of entering the Canadian personal injury law market may already be in jeopardy. Earlier in 2015, the firm saw its shares plummet by around 50 per cent over just three months after one of its British acquisitions, Quindell Legal Services, was made to “restate a previously reported profit as a loss,” according to the Financial Post. While the scandal is hardly a nail in the coffin for one of the world’s largest personal injury law firms, it certainly won’t help to rally already lukewarm support for Alternative Business Structures in Canada.
A recent OTLA blog post summed up its opposition to ABS as such: “Traditional law firms have, of course, also been run as businesses with revenue streams that fluctuate over time. The difference is that while lawyers facing a slow revenue period remain ethically bound to act in their clients’ best interests, the same cannot be said for shareholders.”
At Neinstein Personal Injury Lawyers, our clients are our first priority. We have represented clients throughout Ontario and the GTA in a wide range of personal injury law cases. Our team of experienced lawyers will fight to ensure you and your family receive the compensation, care, and support you deserve. Contact us today for a free consultation.
Greg Neinstein
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