Practice Tips, by Dave Bilinsky, Practice Management Advisor
Can a lawyer witness be compensated for preparation?
Q: I am acting in a contested will case. The lawyer who drew the will has been asked to prepare an affidavit in the proceedings, which he has done. He has rendered an invoice for his time. He may also be called to give evidence at the trial.
Is there a general rule to compensate this lawyer at his hourly rate, or at some other rate, for his time spent as a witness, drafting the affidavit and giving evidence during trial?
Furthermore, if we agree to compensate this lawyer for his time, can that be used to impeach his evidence?
A: Section 4 of Schedule 3 of Appendix C to the Rules of Court entitles parties to recover reasonable amounts paid to some witnesses, including the lawyer in question, for preparing to give evidence when, as here, the preparation was necessary:
4. For any witness other than a party or a present officer, director or partner of a party to a proceeding, a reasonable sum shall be allowed for the time employed and expenses incurred by the witness in preparing to give evidence, when that preparation is necessary.
If the cost is recoverable (that is, the work was done and the overall charge is reasonable relative to the issues involved) and given this section in the Rules of Court, counsel who might seek to impeach the testimony of this lawyer witness would have to do so on grounds other than the fact that the witness was compensated a reasonable amount for preparing and giving evidence in court.
How do we bill work done by an independent contractor?
Q. We are using an independent contract lawyer to work with us on some of our files. When it comes time to bill the client, can we charge an amount in excess of what the contract lawyer charges us for this work?
A: It depends on how you are able to charge out this contract lawyer's work. If you are restricted by your retainer agreement to show this work as a disbursement, then you should only charge the client the exact amount that you have been billed for these services.
In some cases it may not be proper to even charge this amount as a disbursement (for example, where you are on a contingency fee agreement and this disbursement would push the total fees charged above the maximum remuneration permitted for personal injury actions in Rule 8-2 of the Law Society Rules or would otherwise be unreasonable: s. 8-2(b)). When not inconsistent with your retainer agreement or the Law Society Rules, it is not wrong to include this lawyer's services as part of your overall fee, provided that the overall fee is reasonable in all the circumstances. (Rule 1 of Chapter 9 of the Professional Conduct Handbook states: "A lawyer shall not charge an excessive fee.")
The writer wishes to acknowledge the assistance of Gordon Turriff of Stikeman Elliott in answering the previous two Q & As.
How should I send funds to a US beneficiary?
Q: We have been acting on an estate file that will involve sending funds to the beneficiary who is a US resident. What is the preferred route to transmit the funds?
A: Recently, we were notified of a situation where a BC law firm sent a trust cheque to the US, only to have it treated as being drawn in US dollars and not Canadian funds. Needless to say, this caused a problem for the law firm that had to deal with a trust shortage: (Rule 3-66(1): A lawyer who discovers a trust shortage must immediately pay enough funds into the account to eliminate the shortage. (2) If the trust shortage referred to in subrule (1) is greater than $2,500, the lawyer must immediately report the shortage, and the circumstances surrounding it, in writing to the Executive Director).
Furthermore, this firm will have an exception to report on its Form 47 and a problem in attempting to recover the excess funds in the hands of the US resident.
In practical terms, the preferred method for sending amounts in foreign currency is to write a trust cheque to the client payable in Canadian funds, take that cheque to the law firm's bank and have the cheque converted into a bank draft in the currency of the payee. Unfortunately, lawyers have no control over how a foreign bank will treat a Canadian cheque. Sending a bank draft in the currency of the jurisdiction where it will be cashed avoids the problem of interpretation (and possible alteration) by a foreign banking system.
What do I need to consider when office sharing?
Q: What issues should we consider before entering into an office-sharing arrangement?
A: From the Law Society's perspective, there are a number of matters you should turn your mind to before entering into an office-sharing arrangement, starting with a review of Rules 6.1 and 6.2 of Chapter 6 of the Professional Conduct Handbook:
6.1 In Rules 6.1 to 6.3 and 7.1, "sharing space" means sharing office space with one or more other lawyers, but not practising or being held out to be practising in partnership or association with the other lawyer or lawyers.
6.2 Unless all lawyers sharing space together agree that they will not act for clients adverse in interest to the client of any of the others, each lawyer who is sharing space must disclose in writing to all of the lawyer's clients:
(a) that an arrangement for sharing space exists,
(b) the identity of the lawyers who make up the firm acting for the client, and
(c) that lawyers sharing space with the firm are free to act for other clients who are adverse in interest to the client.
There are further explanatory footnotes in the Handbook for these sections.
The Handbook places a clear onus on all lawyers sharing space to affirmatively draw it to their respective clients' attention in writing if the lawyers could be acting for clients adverse in interest. The only alternative to this would be for all the lawyers to agree not to act for any parties adverse in interest - and in consequence set up a conflicts-checking system sufficient to catch any conflicts among any of the space-sharing lawyers before they occur.
Lawyers can also share space with non-lawyers. Therefore, in any type of office-sharing situation, I would take care to ensure that:
1. All written communications (mail, fax, courier) are not opened by or capable of being read by anyone other than one of the lawyer's employees. This necessitates that the lawyers have their own separate fax machines and fax numbers (a lawyer has been disciplined after confidential client information on a shared fax machine was read by an employee of one of the other lawyers who shared the space). This also necessitates having separate computer networks among those sharing the office. Legal files should be kept in secure cabinets and not left lying on desks. Law office cabinets, offices and work areas should be kept secure when unoccupied if they contain files or confidential information.
2. All employees in the office-sharing arrangement (not just those employed by the lawyer) should be made aware of the lawyer's special professional duties to maintain confidentiality. Law office employees must understand that they are not to discuss client matters with any others in or out of the office. Consider having employees sign a confidentiality agreement (available on the "Services for Lawyers / Practice and Ethics" section of the Law Society's website). Particular care must be taken with a shared receptionist to guard client confidentiality.
3. All telephone conversations must be kept confidential. This is of particular concern in secretarial areas, meeting rooms or reception areas.
Lawyers should also review Chapter 13, Rule 6 of the Professional Conduct Handbook on the professional responsibilities of lawyers operating in apparent partnerships or associations:
6. Any lawyer held out as practising in partnership or association with one or more lawyers shall be deemed to have the same professional responsibilities to the general public, other lawyers and to the Law Society, for the actions of any lawyer or lawyers with whom he or she is practising in an apparent partnership or association, as the lawyer would have if carrying on practice with such lawyer or lawyers in a partnership.
There is also the matter of liability. While every situation will be determined on its facts, lawyers who wish to demonstrate that they are separate for liability purposes would be expected to have taken all reasonable steps to demonstrate this - such as by not practising under a joint name, but rather having separate practice names, telephone numbers, letterhead and domain names, and conducting separate marketing efforts.
In other words, if you do not wish to be thought of as a partnership or apparent partnership, you must take as many steps as possible to provide the degrees of separation that would allow a judge, acting reasonably, to conclude that you are in fact, separate legal businesses.
When you choose to go into practice in concert with others, you should take care to remain separate and distinct - otherwise you will be held to the maxim All for One and One for All.
In the September-October 2001 Bulletin, I stated my intention to build a series of precedents on law office management for lawyers on the Law Society website.
Although demand for precedents has been strong, to date I have received two submissions. This is a call to arms! If we wish to develop a useful series of precedents for lawyers to reference, we need to have lawyers submit precedents for the bank.
If you have any practice management precedent that you are willing to submit - office-sharing agreement, retainer agreement, contingency fee agreement, partnership agreement, letter offering staff employment, staff performance review checklist - kindly email them to firstname.lastname@example.org. Thanks!