No empirical evidence exists to show non-lawyer ownership models in the UK and Australia have improved access to justice.
That was the verdict of a report produced by Canadian law professor Jasminka Kalajdzic (pictured) as the province of Ontario considers its own version of alternative business structures.
Kalajdzic, associate professor at the University of Windsor in Ontario, said ABSs in Australia and the UK had been successful in branding, using new technologies, achieving economies of scale and increasing the number of personal injury claims.
But there was no proof that they have led to a reduction in the cost of legal services or the rate of self-representation.
Ontario is currently considering a form of non-lawyer ownership, which supporters say can increase access to justice for those who cannot afford representation.
But the report found no evidence of a significant impact on areas of civil justice needs, such as family, employment, debt and consumer issues, that are most acute in Ontario.
Looking at the example of Slater & Gordon, which is listed on the Australian stock exchange and has acquired several UK firms, the report found some evidence that technology has improved efficiency, with five property lawyers able to handle 16,000 cases per year.
The firm’s growth has also rapidly increased revenue and headcount through acquisitions, but this has not necessarily translated to more clients being served, as the company has taken over business previously offered by existing firms.
The report said that whatever economies of scale can be generated by large consumer firms as a result of alternative sources of capital, new technology, operational design and branding, the evidence to date shows that they are far more likely to occur in areas of practice than can be easily commoditised.
Areas of practice that require more individualised attention from experienced practitioners (such as contentious divorce proceedings or complicated employment disputes) have tended to be less prominent in new business models.
The one area of law that has shown definite signs of growth because of non-lawyer ownership is in the personal injury sector, where expected returns are high and the work can be more easily commoditised.
The report added: ‘The most acute access to justice needs in Ontario presently exist in family law and other civil cases like employment and debt. There is no data to suggest a pressing legal need in the personal injury field.
‘Yet this is precisely the market that NLO investment would be most likely to target, based on the experience in both Australia and the UK.’
The study was commissioned by the Ontario Trial Lawyers Association.
The Law Society of Upper Canada is currently consulting with the profession about what steps to take in favour of non-lawyer ownership.
The move following recommendations from a working group set up in 2012 to look into the legal market in Ontario, which is home to Canada’s capital Ottawa and most populous city Toronto.
Their proposed models include allowing non-law firms to offer legal services and to wholly own law firms – although other watered-down proposals are also put forward.
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