Where, oh Where, Do My LSUC Fees Go?

​It’s that time of year again: time to pay our annual Law Society of Upper Canada fees.

When I worked at a large firm, I barely thought about this expense. I would forward the invoice to the accounting department on some mysterious floor and it was paid. I doubt I even looked at the amount charged.

Now that I am responsible for my own expenses I’ve taken a hard look at that number: $2,108.58. And this does not include my insurance premiums to LawPRO (the base premium being $3,350.00 per lawyer, for a total of $5,458.58 in fees and premiums).

How is the LSUC spending the revenue from our annual fees? What are our fees used for? Why do we pay so much? Are we paying more or less than lawyers in other provinces in Canada?

I decided to start digging. (You may be thinking that I must have lots of spare time on my hands. I don’t. I am just an extremely curious person and I like to know where my money is going). I sat down with a hot coffee and snacks, prepared for a lengthy investigation. This was short lived. One simple Google search produced the most recent LSUC Annual Report (2014), including 30 pages of financial statements . . . and down the rabbit hole I went. . . Here are a few highlights of what I learned:

• As of December 31, 2014 there were 47,400 lawyers practicing in Ontario (and 6,700 paralegals). That’s a lot of lawyers. But with 13.7 million people in this province, I guess we might be needed.
• Not surprisingly, our annual fees make up the largest source of revenue for the LSUC: $73.2 million in 2014 to be exact.
• However, it also collected licensing process fees (articling/LPP) of $13.5 million, fees from continuing professional development courses of $8.6 million, and had investment income of $3.7 million (down from $4.7 million in 2013).
• The Errors & Omissions Fund collected premiums and levies of $104.4 million and submitted these amounts to LawPRO (a wholly-owned subsidiary of the LSUC). 

So where does the money go?

• Professional regulatory expenses (processing of complaints, investigations, outside counsel, expert witnesses, the Tribunal office, etc.) were $27.9 million in 2014. Geesh. Are there that many misbehaving lawyers out there or at least complaints to tie up almost 40% of our annual fees?
• Professional Development and Competence (including the licensing process and the creation of the Law Practice Program, the Spot Audit Program and continuing professional development programs) cost us $24.8 million.
• Corporate Services (the client service centre, information systems, human resources, facilities, etc.) cost $23.1 million.
• Payments to the Benchers totalled $972,000.00 in remuneration (they must first make 26 voluntary attendances – either half or full days - after that they are remunerated at $565 per day or $340 per half day) and $545,000 for reimbursement of Bencher expenses.
• Other expenses include policy and outreach (Public, Equity & Public Affairs) of approximately $7 million, and services to members and the public (including the LSUC’s referral service, payments to CanLII and the Members Assistance Plan) of $4.2 million.

I also learned while perusing the Annual Report, that:

• The Office of the General Counsel spent $588,000.00 on counsel fees (exceeding their budget) in 2014 largely due to the Trinity Western University matter.
• The LSUC is holding $3.7 million in unclaimed trust funds in perpetuity (as in, forever). This is money turned over by lawyers because they can’t locate or identify clients to whom the money is owed. By statute, the LSUC must administer the unclaimed trust funds in perpetuity and is entitled to reimbursement for administrative expenses to a limit of the annual income earned on the funds held. Net income, if any, is available to transfer to the Law Foundation of Ontario (LFO) – however, to date, administrative expenses have exceeded income and no transfers to the LFO have been made.
• His Royal Highness Prince Charles, the Prince of Wales is an Honorary Bencher. Who knew? (Okay not related to our fees – but an interesting piece of information. Not as exciting as Prince William or Prince Harry, in my opinion, but still interesting.)

How do our fees compare to fees in other provinces?

According to a handy chart compiled by the Law Society of British Columbia, we pay the second highest combination of law society fees and insurance premiums in Canada. Only Alberta beats us at a whopping $7,011.00. Saskatchewan is the most affordable province for practicing lawyers where fees and premiums total $3,273.00.

Perhaps I am one of only a few lawyers who wonder about this stuff, but after reading this, are you content with the amount we are paying and where our money is going? Do you read the Annual Report and financial statements? Or, are you at a firm that pays your fees and you really don’t care? 

Aside from the financial stuff, the Annual Report also includes an overview of the priorities set by the LSUC: addressing access to justice issues; competence and professional standards; equity, diversity and retention; professional regulation; business structures; and tribunal issues. The Report also has some interesting statistics on the make-up of the profession. (Ever wonder what percentage of lawyers in Ontario are women? It’s 41.9%.)

If you are curious like me, the full Annual Report can be found here.