Personal Injury

Public ownership not advisable for personal injury firms

If public ownership of personal injury law firms becomes a reality in Ontario, firms that intend to compete and survive in this area will have to dramatically change the way they do business, Toronto critical injury lawyer Dale Orlando writes in Lawyers Weekly.

As a result of a recent Law Society of Upper Canada working group’s report examining alternative business structures (ABS) as a means of delivering legal services, and comments at the society’s ABS symposium last year, Orlando, partner with McLeish Orlando LLP, writes that “some form of ABS is likely to be approved in Ontario in the coming months and that will likely have implications for the personal-injury bar.” These structures could include non-lawyer investment and ownership of law firms as well as bundling the delivery of legal and non-legal services within a single practice, he explains.

In other jurisdictions that have already embraced ABS as a means of providing legal services, such as Australia and the U.K., Orlando says most of the ABS firms practice predominantly in the personal injury sector.

If ABS are allowed in Ontario, Orlando says he expects to see consolidation of much of the personal injury work into large, well-funded firms with multiple offices across the province.

“Personal injury lawyer advertising, which has spiked significantly in the past several years, will continue to grow in prevalence and importance, likely to the detriment of the profession at large. I suspect the ratio of lawyer to non-lawyer employment in the remaining firms to be heavily skewed in favour of non-lawyers, with lawyers being restricted to only doing the work that non-lawyers cannot. The prosecution of claims within the firms will by necessity be heavily system-driven with very little decision-making on the front lines. There is a risk that quarterly profit reporting to the board of directors will inform the claims-handling decision-making process.”

Orlando writes that while the driving force behind the movement towards ABS in the legal field seems to be centred on facilitating access to justice, this is not a concern in personal injury law.

“I question the necessity and advisability of adoption of the ABS model for personal injury practice. There is an abundance of personal injury lawyers in the province competing for the available work. Access to justice simply is not an issue since the vast majority of plaintiff’s personal injury lawyers charge clients on a contingency-fee basis, meaning that meritorious claims of all sizes are readily accepted without clients having to worry about up-front retainers or ongoing payment based on unaffordable hourly rates.”

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