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Employment & Labour

Fixed-fee services becoming more attractive to clients

Fixed-fee services provide a range of options that an employer would not necessarily get by hiring counsel on an hourly basis, and this can help prevent potential legal issues from becoming major problems, Toronto employment lawyer Doug MacLeod tells AdvocateDaily.com.

"The risk of litigation is reduced significantly," MacLeod, principal of MacLeod Law Firm, says. "The fixed fee or retainer service puts employers in a good position, making sure they are compliant with legislation and facing the least amount of legal exposure in different scenarios."

A fixed fee or retainer involves a monthly or yearly fee, he says. The fixed fee depends on the number of services a firm requires and the size of their staff.

Many organizations have recently stepped away from offering the retainer model, relying more on hourly services, he says. In the employment law field, MacLeod says there are few fixed-fee services, "and I think it's a good idea for employers in some cases. So what I do is offer options — if there are certain things clients are looking for, I could do it for a fixed amount," he says.

"Or I have a monthly retainer where clients can pick out the services they usually need, and they have the certainty of knowing what it will cost for a year, I'm not going to offer services you don't need."

MacLeod says he would ensure a startup company with between six and 20 employees meets all its legal obligations, such as implementing mandatory training, procedures and policies.

"I would also explain why employment contracts are such a powerful management tool and would do one for every new employee," he says.

Employee contracts help streamline severance costs, avoid legal fees associated with litigation and eliminate the emotional stress of litigation. The worker contracts set out the expectations and obligations in cases of termination, MacLeod says.

"There would be no litigation, no legal fees and it would cost much less in termination fees," he explains. "It's like employment law insurance. The legal landscape is getting more complicated and expensive, so I think we're at a tipping point where if you don't invest in something like this fixed-fee service, then it's going to come back and bite you and cost you much more."

As a company matures and grows, its obligations expand under various acts, such as the Occupational Health and Safety Act and Accessibility For Ontarians with Disabilities Act.

MacLeod says he would lead an audit of the firm, providing detailed recommendations to ensure compliance with the various acts.

While the firm grows, the nature of complaints could change, he says.

"Included in the retainer, if you're thinking of either hiring or terminating someone, you call me in," MacLeod says. "If you terminate someone and you get a letter from another lawyer, I'll deal with it.

"If you get a call from the Ministry of Labour about a complaint, you call me, and I'll deal with it," he says. "It's for employers who don't have a dedicated human resources person, so I offer a mix of HR for compliance issues and legal services for a fixed amount, and it's much cheaper than hiring an HR person part time and it fulfils two functions."

MacLeod says the impetus for a firm to retain counsel is to be proactive.

"Before they hire someone, I would be advising on the employment contract and on discipline throughout the employment relationship. I'd advise them on termination and any severance package."

The objective is to avoid litigation, he says.

"You have to believe it's worth the investment for the firm," MacLeod says. "I think there's a movement to fixed-fee services not only in employment law but generally. The clients find it very appealing because they know exactly what the costs are going to be and so in some years, the fixed fee may be more than what they would have liked to pay in legal fees, but in other years, it's less.

"Firms don't want to worry about variable professional fees," MacLeod says. "I think for medium-sized employers who are getting squeezed from a business perspective, I think they will find it appealing."

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