No justice for the middle class
Monday, September 10, 2007
- Organization: Macleans
Why only the very rich and very poor can afford to hire a lawyer
When Justice Frank Newbould ordered Karlheinz Schreiber to cover Brian Mulroney's legal bills arising from their recent contretemps, it came as no great surprise. What did raise eyebrows -- at least to those unfamiliar with the stratospheric costs of legal warfare in today's system -- was the bill itself. After a few weeks of work, Mulroney's four lawyers had billed for 203 hours (at rates between $210 and $625 an hour), a plane ticket to fly a member of the brain trust back from vacation for a court date in Toronto, a couple of airport limo rides, and plenty of photocopying, at 25 cents a page, for a grand total of $92,000. (In the end, the judge determined that $64,154.87 was more reasonable.)
Not out of the ordinary for a former prime minister and one of the country's top corporate rainmakers, perhaps. But bills like that -- for what was, after all, only one part of a legal action arising from a mundane business dispute -- have a trickle-down effect on the rest of us.
As rates continue to climb -- some estimate by an average of five per cent a year (and by slightly more in large cities like Vancouver, Calgary and Toronto) -- most Canadians are stuck in a kind of legal no man's land: too poor to afford a lawyer but not poor enough to qualify for legal aid, which is available only to those on welfare. The middle class is "faced with the difficult reality that if they want access to justice they must put a second mortgage on their home or use funds set aside for a child's education, or for their retirement," warned Supreme Court of Canada Chief Justice Beverley McLachlin, during a speech at a Canadian Bar Association meeting in Calgary last month. Her remarks followed a firestorm in the legal community stemming from a Maclean's interview with legal scholar Philip Slayton, who roasted lawyers for being unprincipled and greedy.
Many of us only have to deal with a lawyer when drafting a will and closing the purchase of a home. But those in sudden need of legal counsel for, say, a divorce, a wrongful dismissal or a child custody battle, can find themselves in a debt spiral. In 2005, Canadian Lawyer published its annual survey of the going rates across the legal profession. A Canadian lawyer with at least 10 years of experience was charging an average of $235 an hour. A child custody battle cost, on average, $6,180 (up from $5,140 in 1997). A contested divorce was $8,505 (compared with $6,715 in '97). And the legal costs associated with a typical two-day civil trial averaged $20,830 (that was $8,235 eight years earlier). The magazine found that responses to its questions about fees dried up in '06 and '07. One Canadian legal search firm projected that salaries for lawyers at large firms with one to three years' experience would spike by 9.8 per cent in 2007 compared to last year. Meanwhile, corporate lawyers with the same experience were expected to get a 12.4 per cent bump.
While an estimated 90 per cent of civil cases never even make it to court, just getting a lawyer to do a few hours of research, offer a basic opinion on your chances, and maybe write a couple of letters in a simple civil matter -- like a dispute with a noisy neighbour -- will cost about $5,000, says Lorne Sossin, a law professor at the University of Toronto. And according to former Justice John Gomery, many lawyers these days ask for some money up front. "The lawyer is going ask for a $10,000 advance and most people are going to say, 'I'll buy earplugs,' " he says.
Gomery, who retired last month after about 50 years in the legal profession, says access problems for middle-income earners started in the early '80s when firms began merging. That ushered in a new era of big-business law. "The emphasis on professional excellence became secondary to the bottom line," he says. "The commercial side has taken on a greater and greater importance and it means lawyers are looking more and more to what they earn, instead of the service that they're rendering." Back when Gomery was practising law, 1,400 billable hours was a good year. Now, young associates at some big firms are expected to log more than 2,000. In an industry built on dividing an hour into 10, six-minute billable components, time is money. And missing your quota could destroy a young associate's dream of rising to the level of partner.
Richard Stock, the founder of Toronto-based legal strategist Catalyst Consulting, says rising fees and salaries are due in part to a brain drain, and the competition among firms to hold on to their money-makers. "[Fees are] not tied to cost of living any more than Sidney Crosby's salary is," he says. Higher real estate prices are another factor, "and people don't stay as long as they used to. When you have a shortage of supply it drives the cost up for those who stay and that's passed on, of course, to the users."
Bernard Amyot, the CBA's new president, doesn't buy the argument that lawyers are solely responsible for problems of access for the middle class. He claims that lawyers' hourly rates are just one of many factors. Another hot issue is the fact that the federal government takes in an estimated billion dollars a year by charging GST on legal services. And anyway, he says, the "vast majority of Canadian lawyers are not charging the high prices and are not making that much money." That claim is hard to reconcile with the evidence of rising costs for clients across the profession, however. Still, he balks at the notion of regulating fees. "It's a competitive marketplace," he says. "It's a private practice and you don't have to hire me. You can hire someone else."
But the numbers show that an increasing number of Canadians aren't hiring anyone. They are either turning away from the system altogether (having decided, says Sossin, that "justice is doled out based on the size of your wallet rather than the merits of your claim") or are attempting to represent themselves with little more than a Law & Order education. Both situations, experts say, are dangerous. In some Canadian courts, more than 40 per cent of people suit up and represent themselves, but it rarely pays off. For starters, the judge has to dumb down the proceedings, which causes cases to drag on for days longer than they should (the average length of a civil trial in Vancouver, for instance, has expanded from 12.9 hours six years ago to 25.7 hours). It's also hard on the person who actually hired a lawyer -- especially in a domestic battle. "Every moment their ex-spouse yammers on or doesn't follow the rules because they don't know what's going on costs the other person money," says Alexandra Seaton, a lawyer with Toronto-based Wilson Christen. Then there's the old saying, says Gomery, "that a person who represents himself has a fool for a client and a rascal for a lawyer."
Since so many people are taking matters into their own hands, Pro Bono Law Ontario (PBLO) is currently working to establish an office in the Superior Court in Toronto that would have a staff devoted to providing advice on self-representation. David Scott, a lawyer with Borden Ladner Gervais in Ottawa and PBLO's chairman, hopes that providing the poor with these important tools will have a twofold effect on the system as a whole: it will make judges simplify the court process, and it will force lawyers, afraid of losing even more business, into finding ways of making their services more affordable.
But programs like that will only go so far. One of the big problems, Gomery says, is the proliferation of mega-firms, squeezing out independent, storefront lawyers who used to provide more affordable representation to the middle class. "The idea of going and hanging up your shingle and practising as a sole practitioner is no longer possible," he says. "It costs too much."
Another issue, critics say, is rooted in the profession's culture of billable hours. Even if you're an idealistic member of the new generation of lawyers, eager to work for government or public interest organizations, you're likely graduating from law school with lots of debt, and that creates a huge incentive to join a big firm and start racking up the fees. It makes the $90,000, plus bonus, being offered to many first-year associates on Bay Street nearly impossible to pass up.
Critics argue that what's needed is fundamental reform, and a system of incentives -- like making pro bono work count toward annual billing totals for young lawyers. The alternative is to sit back and wait as public anger mounts toward an inevitable confrontation, and legislative reforms that would likely lead to what Gomery calls a "kind of socialization" of the legal profession. "The doctors were very unhappy when that occurred and I would think the lawyers will be very unhappy if that occurs," says Gomery. "But I don't see any alternative if matters continue as they are."
And so, the question comes down to this: is the legal profession ready and willing to heal itself? Or will it risk the loss of its independence and self-regulatory status. "The whole idea of the independence of the bar is that it's there to defend the public against groups with unchecked power like government," says Sossin. "If it becomes reversed -- and you have to go around lawyers to find a way of accessing the justice system -- I think that's very dangerous for lawyers."