Many changes have been afoot in the legal space with the Law Society of Ontario’s (LSO) new rules on advertising and fee arrangements and more recently, approval of a cap on referral fees.
Full disclosure: we work with many law firms to market their services so have paid keen attention to these stories as they have unfolded throughout the Toronto Star’s investigation into the controversial advertising practices of some Ontario law firms, mostly in the personal injury field.
The LSO’s amendments to its advertising and fee rules, which had been in the works since last summer, were agreed upon in principle by Convocation, the LSO’s governing body and took effect in late February.
At the end of April, the LSO’s governing board decisively set a referral fee cap at 15 per cent for the first $50,000 of legal fees and five per cent for each subsequent amount, to an absolute fee cap of $25,000.
Overall we agree with the LSO’s efforts to rein in unruly promotional practices in the legal field. When we partner with law firms to market their services, we pride ourselves on being mindful that any creative work we produce for our clients abides by the advertising rules that govern their industry.
Here are some thoughts on why these changes are good for lawyers and law firms as a whole:
The LSO’s "Convocation - Professional Regulation Committee Report" contains full details of their findings, concerns, proposed amendments to the current fee and advertising rules, and next steps. The existing rules remain largely unchanged, however the LSO rules are now much more specific by providing examples of prohibited marketing practices.
For those who need a little refresher, the current rules state:
4.2-1 A lawyer may market legal services only if the marketing
Examples of marketing that may contravene this rule include
Remember how we said that the rules are somewhat general and open to interpretation? To ensure that little can be left to any wild marketer’s imagination, the LSO has added the following:
Examples of marketing that do contravene this rule include
Awards, rankings and third party endorsements which contravene this rule include those that:
4.2-1.1 A lawyer marketing legal services shall specifically identify in all marketing materials that they are licensed as a lawyer.
4.2-1.2 The marketing of second opinion services is prohibited.
In addition to the cap on referral fees, the LSO also approved related measures to increase the transparency of referral fee arrangements. The following new requirements took effect on April 28, 2017:
Shortly after the LSO’s new rules were announced, Liberal MPP Mike Colle (Eglinton-Lawrence) tabled a private member’s bill that calls for a ban on referral fees, makes all advertising by personal injury lawyers subject to pre-approval by the LSO, requires contingency fee agreements to clearly state how the lawyers will get paid and caps contingency fees at 15 per cent of the settlements awarded to personal injury victims.
Acknowledging that private member’s bills rarely become law, Colle said his intention is to raise awareness of these practices that are negatively impacting accident victims and to pressure the government to take action.
While the new rules are a welcome and arguably a long overdue change, they won’t hold much water unless they are enforced and those who break them are penalized. Convocation deals strictly with policy and does not comment on enforcement.
In a press release from the LSO, Chief Executive Officer Robert Lapper had this to say: “Lawyers and paralegals are expected to follow the Rules of Conduct. In the event that the Rules are not followed, the Law Society will vigorously investigate and take appropriate regulatory action.”
The LSO is currently investigating about 90 cases of advertising and referral fee complaints involving lawyers from various law firms across Ontario. Clearly a problem exists. To effectively deter rule-breaking behavior, the punishment must fit the crime. Serious wrongs are being committed when vulnerable people are being taken advantage of, hard-earned money is going to undeserving people, and public perception of an entire profession is being tarnished by jingles based on half-truths and outright lies. It is our hope that the LSO will put as much thought and effort into enforcing the rules as it has into coming up with the recent amendments.
So what can your law firm do to ensure that your marketing efforts are well within these new regulations? The first step is, of course, knowing them. We have included excerpts from the proposed amendments above and encourage you to take a look at the full report.
Aside from following the letter of the law, so to speak, here are our guidelines to help you follow the spirit of it too:
By virtue of being a lawyer, your intentions and motivations are quite simply to help people. Common sense dictates that misleading or deceitful advertising is simply not helpful nor does it uphold the values and integrity that people expect from their trusted legal advisors.
From your website to a billboard ad to a radio commercial, it’s important that everything you put out there is true and accurate or else you are committing a major disservice to the general public. And take it from us: truth and accuracy does not mean uninteresting and ineffective. We have worked with hundreds of lawyers over the years to help them uncover who they are, what they offer, and why that makes them the right choice for the right client. We pride ourselves on finding creative, compelling and truthful selling points for each and every law firm that we work with.
Sure, it’s cliché and a little cheesy, but do unto others as you would have them do unto you. Put yourself in the shoes of the person who has been injured by someone else’s negligence and is suffering from intense physical and emotional pain. They may have limited resources and have never had to deal with an insurance company or the legal system. If that were you, would you want to be misled, misinformed, and misrepresented?
In the 15 years that we at Cubicle Fugitive have been marketing in the legal space, we have always found that the truth speaks for itself and can do so in very exciting, engaging, and effective ways. So go forth and embrace these ch-ch-ch-ch-changes.