The Benchers have approved a total annual fee of $3,875.57 for 2017. The practice fee will increase by $68.48 to $2,125.57 and the insurance fee will remain the same at $1,750. The presentation to the Benchers on the 2017 fees and the associated budgets for each fund is available on the Law Society website in the September 30, 2016 Bencher meeting agenda materials.
|
|
2017
|
2016
|
Difference
|
%
|
|
Law Society operations
|
$1,745.55
|
$1,663.67
|
$81.88
|
4.9%
|
|
The Federation of Law Societies
|
$28.12
|
$30.00
|
$(1.88)
|
(6.3)%
|
|
The Canadian Legal Information Institute
|
$39.24
|
$40.00
|
$(0.76)
|
(1.9)%
|
|
The Law Foundation of BC (pro bono/access justice)*
|
$28.91
|
$29.57
|
$(0.66)
|
(2.2)%
|
|
REAL (Rural Education & Access to Lawyers)
|
$4.25
|
$4.35
|
$(0.10)
|
(2.3)%
|
|
Courthouse Libraries BC
|
$185.00
|
$195.00
|
$(10.00)
|
(5.1)%
|
|
Lawyers Assistance Program
|
$67.00
|
$67.00
|
-
|
-
|
|
The Advocate
|
$27.50
|
$27.50
|
-
|
-
|
|
Annual practice fee
|
$2,125.57
|
$2,057.09
|
$68.48
|
3.3%
|
|
Lawyers Insurance Fund fee
|
$1,750.00
|
$1,750.00
|
-
|
-
|
|
Total mandatory fee
|
$3,875.57
|
$3,807.09
|
$68.48
|
1.8%
|
* The total Law Society contribution to pro bono/access to legal services is $340,000 in 2016 and 2017, as recommended by the Access to Legal Services Advisory Committee in 2014.
Practice fee
The Benchers have set the 2017 fees pursuant to the Legal Profession Act based on a thorough review of the Law Society’s finances by the Finance and Audit Committee. The Finance and Audit Committee met with senior management to review the proposed 2017 fees and budgets for the General Fund and the Lawyers Insurance Fund. The Finance and Audit Committee also reviewed the fee proposals from a number of organizations and programs supported by Law Society fees, including Courthouse Libraries BC, the Lawyers Assistance Program, The Advocate, the Federation of Law Societies of Canada, the Canadian Legal Information Institute, the Rural Education and Access to Lawyers (REAL) program and the delivery of pro bono and access to legal services. Based on these meetings and reviews, the Finance and Audit Committee made recommendations to the Benchers regarding the amounts from the practice fee that should be allocated to each of these organizations and programs. These recommendations were approved by the Benchers at their September 30, 2016 meeting.
The overall objective when setting the fees is to ensure that the operations are appropriately funded to enable the Law Society to efficiently and effectively fulfill its statutory mandate of protecting the public interest in the administration of justice.
Law Society operations
For the portion of the practice fee that funds the Law Society operations, the Benchers have approved an increase of $81.88 (4.9%). The focus of the 2017 General Fund budget, in addition to delivering the core regulatory programs and meeting the established Key Performance Measures, is supporting regulation and education to ensure that the Law Society remains an innovative and effective professional regulatory body.
The total operating expenses are projected to be $23.8 million, an increase of $1.4 million (6.2%) over the 2016 budget. This year-over-year budget increase primarily reflects additional resources in the regulatory and education areas to deal with increased demand. There has been the addition of 8.4 staff positions, of which 3.5 of the staff positions have been funded through a reduction in the external counsel fee budgets. Within the investigations and discipline areas, cases continue to be more complex, with increased demand on resources. The number of custodianship files has increased, requiring more custodianship fees and other related costs. With the increase in student numbers, funding has been added to provide greater support for the PLTC program. In addition, there is provision for market based staff compensation adjustments, as determined by external market benchmarking. The elimination of one position and the reduction of library subscriptions have reduced the year-over-year increase.
To ensure a balanced budget, General Fund revenues are expected to be $23.8 million, $1.4 million (6.2%) over the 2016 budget. The budgeted revenue is based on the approved practice fee and estimates of 11,760 full-time equivalent practicing members, 500 PLTC students, and other revenues at similar levels to recent years.
Trust administration fee
For 2017, the trust administration fee (TAF) will remain unchanged at $15 per transaction. TAF revenue has been stable over the past three years, and TAF reserve levels will be monitored to ensure the program is funded and has appropriate reserve levels.
The Federation of Law Societies of Canada
The Federation of Law Societies of Canada provides a national voice for provincial and territorial law societies on important national and international issues. The Law Society’s contribution to the Federation will remain the same as the current amount of $28.12 per member.
The Canadian Legal Information Institute
The Canadian Legal Information Institute (CanLII) is a not-for-profit organization initiated by the Federation of Law Societies of Canada. CanLII’s goal is to make primary sources of Canadian law accessible for free on its website at http://www.canlii.org. All provincial and territorial law societies have committed to provide funding to CanLII. The Law Society’s contribution will remain the same as the current amount of $39.24 per member.
Courthouse Libraries BC
Courthouse Libraries BC (CLBC) provides lawyers and the public in BC with access to legal information, as well as training and support in finding and using legal information. The Law Foundation of BC and the Law Society both contribute to CLBC funding. With savings in certain areas, the Law Society's contribution will be reduced by $10 to $185 per member. Through its digital collections, website content and training, the library provides practice support for lawyers across the province; and for the public through the Clicklaw website, public library legal collections, as well as individual assistance.
Pro bono funding
The Law Foundation includes Law Society funding in its financial support to organizations offering pro bono legal services to the public. As recommended by the Access to Legal Services Advisory Committee, the Law Society 2017 contribution to pro bono and access to legal services programs continues at $340,000.
Lawyers Assistance Program
The Lawyers Assistance Program (LAP) provides confidential outreach, education, support and referrals to lawyers and other members of BC’s legal community. Law Society funding for LAP in 2017 remains at $67 per member.
The Advocate
The 2017 amount allocated from the practice fee to be provided to The Advocate remains at $27.50 per member, unchanged from 2016.
Rural Education and Access to Lawyers
The Rural Education and Access to Lawyers (REAL) initiative is funded by the Law Society and the Law Foundation, with in-kind support from the Canadian Bar Association, BC Branch. The REAL initiative is a set of programs established to address current and future projected shortages of legal services in small communities and rural areas of the province, and improve access to justice. The program supports the placement of summer law students in small communities and rural areas of BC, with a goal to encourage future lawyers to practice in these areas.
The Law Society contribution at $50,000 for 2017 ($4.25 per member) will be the same as 2016.
Lawyers Insurance Fund fee
The Benchers have resolved to maintain the annual insurance fee at $1,750 for 2017. The number of insurance reports have been trending up slightly over the past few years, with 2016 expected to be similar to 2015. Annual payments are also trending up, but overall the program is managing within the existing insurance fee and investment revenue. Effective management, good investment returns and solid reserves have made it possible to hold the Law Society’s insurance fee at $1,750 since 2011. Actuarial advice indicates that, based on industry standards, existing net reserves are at appropriate levels. However, there are risks to be considered. The expansion of coverage under Part C for trust shortages from social engineering scams will increase the exposure to claims. The BC government’s move to levy a 15% tax on foreign purchases could increase exposure, at least in the short term. In addition, the risks presented by the Limitation Act, the Wills, Estates and Succession Act and probate rules, and to a lesser extent, the Family Law Act, are expected to give rise to additional future exposures for the fund. These new risks, higher costs, and lower investment returns in the future, may require an increase to the fee in future years.
Total fee comparison with other law societies*
* 2017 Law Society of British Columbia annual fee compared to 2017 projections or 2016 annual fees of other Law Societies, increased by 2%.
For more information
If you have questions about the fees or the financial information in this notice, please contact Jeanette McPhee, Chief Financial Officer and Director of Trust Regulation, by telephone at 604.443.5712 (toll-free at 1.800.903.5300) or email at jmcphee@lsbc.org.