Update
April 25, 2024 — Convocation has approved amendments to By-law 7.1, which implement a requirement for licensees in private practice to maintain a client contingency plan for their professional business.
The amendments will come into force on January 1, 2025 and will be reported in 2025 Annual Report Filings (reporting deadline: March 31, 2026).
A full suite of resources, including a client contingency plan template, will be created or updated, and individualized guidance and resources will be available.
Read the report: Client Contingency Planning
Who does this apply to?
Licensees in private practice.
Licensees who work as in-house counsel, in legal clinics or government, and licensees who are in the non-practising class will be exempt from the requirement.
Reporting will include two options:
- Sole practitioners will be required to confirm that they have created a client contingency plan that complies with the Law Society’s minimum requirements, that they have reviewed that plan in the preceding 12 months, and that they have obtained the consent of their administrator to act as such.
- Licensees practising in firms (partners and associates) will be required to confirm that their firm has a plan, and that it complies with the Law Society’s minimum requirements, including a contingency in the event that no members of the firm are able to carry on the firm’s professional business.
Why is client contingency planning important?
When a licensee is suddenly or unexpectedly unable to practise law or provide legal services, clients with active matters may have their legal interests jeopardized. Court appearances may be missed, real estate deals may fail to close, immigration documents may not be filed and trust funds may be inaccessible, which may hold up pending matters.
In instances where a licensee ceases to practise law or provide legal services without appropriate arrangements to wind-up their business, the Law Society’s Trustee Services department steps in to protect, preserve and appropriately distribute client trust monies and property, such as client files, testamentary documents, or corporate minute books – this occurs most often among lawyers who practise as sole practitioners. However, often it is weeks after the licensee has stopped working before Trustee Services finds out that they need to intervene in a practice and when they do, they do not have any of the necessary information and must take additional time to access digital records and files, and locate trust funds. Often clients won’t be aware that their lawyer or paralegal is no longer practising law or providing legal services and will assume their legal matter is still being monitored.
Client contingency planning ensures that licensees take necessary steps to put plans in place that protect their clients by ensuring that their files are not abandoned if their lawyer or paralegal is unexpectedly unable to continue with the retainer and meeting their obligations as a licensee.
Background
The Professional Regulation Committee’s consultation process to obtain feedback on a recommendation from the Trustee Services Working Group to implement a mandatory succession planning requirement for licensees in private practice concluded in late 2022. Feedback was received via email, the completion of a consultation form and a series of virtual focus groups.
Based on the feedback from that consultation, the Committee made a number of changes to the proposed recommendation, including narrowing and focusing the role of a successor or administrator licensee to safeguarding client interests in circumstances where their lawyer or paralegal suddenly or unexpectedly ceases to practice law or provide legal services, whether due to death, disability, or other cause.
Read the consultation report.