Handbook allows BC lawyers to share fees with foreign lawyers

In recognition that BC lawyers form affiliations with other lawyers, both across Canada and internationally, the Benchers have amended Chapter 9, Rules 2 and 6 of the Professional Conduct Handbook to allow the sharing of fees with lawyers outside British Columbia.

Rules 2 and 6 previously allowed a BC lawyer to pay a referral fee to another BC lawyer, to act for a client on a referral where another BC lawyer had charged the client a referral fee and to share fees with another BC lawyer.

The rules did not contemplate BC lawyers sharing fees with other Canadian lawyers, although it was clear that any prohibition on forming partnerships or associations with lawyers in the rest of Canada would be contrary to the 1988 decision of Black v. Law Society of Alberta, [1989] 1 S.C.R. 591. In Black the Supreme Court of Canada found that rules of the Law Society of Alberta prohibiting its members from practising in association with lawyers who were not ordinarily resident in Alberta infringed lawyers' mobility rights under section 6(2)(b) of the Canadian Charter of Rights and Freedoms, and could not be justified as a reasonable limit under
section 1.

For BC's Handbook to be consistent with Black, the Ethics Committee asked that Rules 2 and 6 be revised to reflect that BC lawyers may participate in referrals or fee sharing with other lawyers in other parts of Canada. But the Committee went a step further by

recommending that the Benchers also contemplate fee arrangements in international practice.

".[A]s a matter of policy, we think Rules 2 and 6 should apply to lawyers outside of Canada, as well, provided the lawyers are members of a recognized legal profession in a foreign jurisdiction and the arrangement is in compliance with the law of the jurisdiction where the foreign lawyers practise," the Ethics Committee advised the Benchers. "Changing the rules to reflect this principle would permit British Columbia lawyers to affiliate, when appropriate, with lawyers in any jurisdiction. Such a change recognizes the reality that the contemporary practice of law inevitably has interjurisdictional dimensions and British Columbia lawyers ought to be able to enter affiliations that take account of that reality."

As now revised, Rules 2 and 6 of Chapter 9 of the Handbook contemplate that a BC lawyer may pay a referral fee to "another lawyer," may act for a client when another lawyer has been paid for the referral or may share fees with another lawyer. In this context, "another lawyer" is now defined as including a lawyer "who is a member of a recognized legal profession in any other jurisdiction and acting in compliance with the law and any rules of the legal profession of the other jurisdiction." The rules continue to prohibit payment of referral fees and fee sharing with non-lawyers, subject to one exception for law firm staff: see footnote 1.

Chapter 9, as amended, is set out in the enclosed Member's Manual amendment package. The Chapter also reflects some minor, non-substantive wording changes.