[*See an update on this topic below*]
Are you thinking of leaving your law firm for another? Do you know your professional obligations with respect to your clients and your firm? Recently a decision of the Ontario Superior Court of Justice  reviewed those obligations in the context of a dispute that arose after an associate left one personal injury law firm for another, taking some of her clients with her. The principal of the associate's former firm commenced a claim for $1.25 million in damages against the associate for "breaches of fiduciary duty, trust, good faith and / or loyalty" and as against the principal of her new firm for "knowing assistance" in the alleged breaches.
Summary Judgment Motion
The defendant principal of the new firm brought a summary judgment motion seeking to have the action against him dismissed on the basis that the plaintiff (the principal of the associate's former firm) failed to show (and could not show) "knowing assistance" in the associate's alleged breaches. Justice Gordon noted that solely for the purpose of the summary judgment motion, he assumed that the plaintiff had met the threshold of proving that the associate had breached "some duty" owed to the principal of her former firm. Whether she actually did or not, however, was "a matter for another day".
In his analysis of the legal issue, Justice Gordon reviewed certain guidelines provided by the Law Society of Upper Canada (dated 2009) concerning a lawyer's professional obligations when leaving a law firm. In summary, those guidelines provide that:
In this particular case, the plaintiff could only be successful in a claim in "knowing assistance" against the principal of the associate's new law firm if the following elements were met:
a) there was a trust;
b) the new principal had knowledge of the trust;
c) the associate perpetrated a dishonest and fraudulent breach of trust; and
d) the principal had actual knowledge of, or was wilfully blind to, and participated in the associate's dishonest and fraudulent breach of trust.
The defendant testified that he advised the associate that she must abide by the Law Society guidelines and specifically her duty to inform her clients. This evidence was uncontradicted. The Court noted that if there was "more or better evidence, it should have been tendered on this motion."
Justice Gordon concluded that there was no evidence to support an allegation of "knowing assistance" either in the form of actual knowledge or wilful blindness: "Indeed the evidence is to the contrary. It was unchallenged that [the new principal] was well aware of the lawyer's duty to inform clients on leaving a firm and the manner in presenting the options for the client. . .On this evidentiary record, I conclude [the new principal] did all that was required."
The motion for summary judgment dismissing the action as against the new principal was granted.
Do you know all of your professional obligations when leaving a law firm? It appears that the LSUC's guide referenced in this case "Leaving a Law or Legal Services Firm" (Dated 2009) is no longer available on its website. However, the guide "Closing Down Your Practice" also provides some useful tips.
If you are interested in case summaries for your website or blog please contact me.
 Robert Findlay Law Office Professional Corporation v. Werner et al 2015 ONSC 2955.
 Ibid. at para. 12.
 Ibid. at para. 15 & 23-27.
 Ibid. at paras. 30.
 Ibid. at para. 49.
*UPDATE: In June 2017 the Law Society of Upper Canada amended the Rules of Professional Conduct to add a rule dealing with a lawyer's professional obligations when leaving a law firm, based in part on the Robert Findlay case discussed above. See my blog post on this new rule on the Flex Legal blog.*
Like most people, when I meet someone new, I am asked the question: “What do you do?” This is a fairly easy question to answer, right? I can just say, "I am a lawyer". But I usually get the follow-up question: “What type of law do you practice?” This is where it gets a little more confusing. I tell them I am a freelance lawyer. Often this is followed by blank stares. Then, when I try to explain what I do (assist other lawyers and law firms with legal writing and research and any overflow litigation work they may have) I get the response: “Oh, so you are a sole practitioner.” Yes…no…not quite. While I have a lot in common with sole practitioners my practice is also very different. So I have decided to explain five ways in which freelance lawyers (or sometimes referred to as contract or project lawyers) are different than sole practitioners:
Number 1 – The Clients
I only work for other lawyers, law firms, or legal departments. Unlike sole practitioners, I do not provide legal advice directly to non-lawyers. This also means that I, and other freelance lawyers, have a much smaller client market than sole practitioners.
Number 2 – Predictability
In civil litigation, my area of practice, files can last for years. A sole practitioner's litigation files can be dormant for months and then catch on fire at a moment’s notice. Some people may thrive on this unpredictability. Me, not so much. Instead of juggling 100 files that could blow up at any moment, I prefer to focus on one or two assignments or projects at a time that have clear beginnings and ends. This means my client gets 100% (or close to it) of my attention on his or her file. However, this also means that I do not have the other 99 files to rely on once my current assignment is completed. A freelance lawyer must be okay with the potential peaks and lulls of freelance work.
Number 3 – The Hours
As the nature of the work is different, so are the hours. With my one-off, or discrete tasks, it is easier to plan my day or week. Of course I also take on rush assignments if needed and I am available. However, I don't have clients calling me at all hours like I did in private practice. My clients are all busy lawyers. Sure, there are definitely some weeks when I am working the same hours as I did in Big Law, but it is by choice.
Number 4 – Caliber and Nature of the Work
My lawyer clients always give me very interesting and challenging legal work. The instructions are also very clear and well thought out. Having a lawyer as a client means a lot less of the emotional support and psychological hand-holding that I used to provide my non-lawyer clients. When I was in private practice a lot of my day had nothing to do with the law itself. Now my job is mostly all about the law (which I love). Some of my lawyer clients have told me that they prefer providing that emotional support and hand-holding and aren't that keen about the actual law. This is how, as a freelance lawyer, I can complement a solo practice or law firm. My clients outsource the work they don't like so they can focus on the work that they do.
Number 5 - Flexibility
Most sole practitioners have an office, a legal assistant or law clerk, office equipment and furniture, etc. I have very little overhead. I can work from anywhere and I have a paperless 'office'. I have clients all over Ontario and I can meet with them over Skype, phone, email etc. Technology has given us this freedom. Also, if I am done my current assignment and want to take a vacation, or go into a firm and assist with a large litigation file or trial, I can go. Without ongoing files, I have nothing to leave behind for a fellow associate to “babysit”.
While freelance lawyers and sole practitioners have a lot in common, we are different in a few ways. Depending on his or her personality, a lawyer may be better suited for one type of practice over the other. I prefer the freelance way of life and I am not the only one. Check out my fellow freelancers at Flex Legal Network.
Erin C. Cowling is a freelance litigator, researcher & writer at Cowling Legal Freelance and President and Founder of FLEX LEGAL, a network of freelance lawyers.