Governance Reform and Lawyer Independence in Canadian Legal Regulation: Examining British Columbia’s Bill 21

Earlier this month, the government of British Columbia introduced Bill 21, the Legal Professions Act. This bill amalgamates the Law Society of British Columbia and the Society of Notaries Public of British Columbia into a new corporation, Legal Professions British Columbia (LPBC), while also creating a licensing and regulation structure for paralegals. It could be the most consequential development in Canadian legal regulation in more than 100 years.

The British Columbia legal profession’s leading organizations (the Law Society, the Canadian Bar Association’s BC branch, and the Trial Lawyers’ Association of BC) strongly oppose Bill 21, with the Law Society promising a court challenge should the bill become law. The principal reason for their opposition is the new regulator’s proposed governance structure.

Instead of continuing the Law Society’s governance model, in which elected lawyers comprise a super-majority of directors (or Benchers), LPBC’s board would include a more balanced mix of elected legal professionals (lawyers, notaries, and paralegals) and appointed members, including Indigenous and First Nation representatives. The lawyer organizations opposed to Bill 21 believe the loss of the elected lawyer super-majority on the board would dangerously undermine the independence of the legal profession from government.

I understand and appreciate these organizations’ concerns; the independence of lawyers from state interference is extremely important. But I believe the new governance model would continue to safeguard the independence of lawyers while right-sizing the legal profession’s degree of influence over its own regulator. In addition, the bill will increase the range of authorized and affordable options for legal assistance for British Columbians, a much-needed response to the legal accessibility crisis.

Bill 21 is not perfect; I have significant reservations about certain aspects. But because of its new governance model and its authorization of licensed paralegals, I believe it will change the regulation, provision, and accessibility of legal services in British Columbia for the better. In this lengthy article, I will endeavour to trace the recent history of legal regulation reform efforts in BC, describe LPBC’s proposed new governance model, and explain why the bill and its reformed governance structure have my support.

Historical Background

British Columbia is one of only two provinces (along with Québec) where two separate regulators oversee two different types of legal services providers (lawyers and notaries public). Historically, relations between the two professions could be described as uneasy at best. The BC government’s proposal to amalgamate these two regulators into a single new body is the culmination of its long-running efforts to streamline legal regulation and address challenges related to the accessibility of legal services.

Bill 21 is not the government’s first attempt in this regard. In July 2012, Attorney General Shirley Bond asked both regulators to develop a proposal for regulatory reform of legal and notary services that would “enhance the protection of the public interest in the provision of legal services, increase affordability and access to legal services and/or access to justice, and create efficiencies in the regulation of legal services.” (pp. 5-6)

That request produced a Memorandum of Understanding between the two regulators to pursue what amounted to a merger that would see the Law Society take over regulation of notaries. (pp. 1-3) Task forces were struck and many discussions were held, but for reasons not available on the public record, no final agreement was achieved.

The BC government soon tried again, this time with an attempt to create a regulatory framework within the Law Society through which paralegals could be licensed to carry out less complex legal work, including in family law. In 2018, following several years of joint efforts with the Law Society, the government was ready to make required amendments to the Legal Professions Act enabling licensed paralegal regulation by the Law Society.

But at the Law Society’s annual meeting that fall, lawyers voted overwhelmingly in favour of a motion directing the Benchers not to authorize licensed paralegals to practise family law and to ask the government not to bring the licensed paralegal amendments into force. Afterwards, on the recommendation of the September 2020 report of the Licensed Paralegal Task Force, paralegal licensing was instead re-routed to a new “innovation sandbox” at the Law Society for case-by-case determination.

In 2021, the Law Society, to its credit, commissioned regulatory expert Harry Cayton of Great Britain to conduct a review of its governance. Mr. Cayton was already a familiar figure in provincial professional regulation: In 2018, the BC government had retained him to conduct a review of the College of Dental Surgeons, and later expanded his mandate to include an overall assessment of the provincial Health Professions Act. His subsequent report led to extensive changes in health profession regulation in BC.

Mr. Cayton’s review of the Law Society’s governance was completed in late 2021. He assessed the society’s governance against the Professional Standards Authority’s Standards of Good Regulation, and found that the Law Society met four of the nine standards, partially met three, and did not meet two. “This is an acceptable result on a first assessment, as the standards are intentionally demanding,” he wrote.

But Mr. Cayton’s report was also critical of various structural and operational aspects of the Law Society. Among his findings in this respect were:

The legal framework within which the Law Society operates is not fit for a modern regulatory body. … The power of the members to elect the Benchers and to overrule them and to stop changes to the Society’s rules means that the Society acts more like a professional association than a professional regulator. … There is a lack of engagement with regulatory matters and the Society is too involved in responding to the interests of the legal profession.

To be fair to the Law Society of BC, Mr. Cayton’s description of many of these defects would apply to all law societies. When members of a regulated profession directly elect the great majority of the regulator’s board of directors, the public has both a right and a reason to ask serious questions about whose interests those directors will reflect: those of the public, or those of the professionals who voted them into their positions. Law societies’ failure to categorically expand legal service authorization beyond lawyers, in the face of Canada’s decades-long accessibility crisis, is a leading example of regulatory decisions that create doubts among the public regarding the regulator’s true priorities.

That, at least, is my own view. I do not know what view the BC government takes on this issue. But Bill 21’s establishment of a new single legal regulator, one with a radically different governance model, would at least suggest that the government believes it cannot bring about reforms to improve access to legal services under the present regulatory regime.

The New Governance Structure

Bill 21 is lengthy — 317 provisions, nearly 45,000 words — and there are many sections that deserve in-depth exploration (e.g., the definition of the practice law in s. 35, the scopes of practice in ss. 45-48, and the licensing powers in ss. 51-52, not to mention the enablement of an entirely new paralegal licensing regime). But I will focus here only on section 8, “Board of Directors,” which sets out the governance structure of the new regulator, as follows:

• The total number of directors is 17. (Currently, the Law Society’s board has 31 members: 25 elected lawyers and 6 appointed lay benchers.)
• 5 directors are elected by and from among lawyers.
• 2 directors are elected by and from among notaries public (who are not also lawyers).
• 2 directors are elected by and from among licensed paralegals — unless there are fewer than 50 licensed paralegals in the province, in which case these 2 directors are appointed by a majority of other directors on the recommendation of the BC Paralegal Association.
• 3 directors, of whom at least 1 must belong to a First Nation, are appointed by the Lieutenant Governor in Council.
• 5 directors, of whom:
  • 4 must be lawyers,
  • 1 must be a notary public who is not also a lawyer, and
  • at least 1 must be an Indigenous person,

are appointed by a majority of the other directors.

These provisions create a board with the following characteristics (I will assume, for simplicity’s sake, that the threshold level of 50 licensed paralegals will be reached):

• At least 9 of the 17 directors are lawyers.
• At least 9 of the 17 directors are legal services providers who are elected by their colleagues.
• At most 8 of the 17 directors are appointed — 3 by government, 5 by the rest of the board.
• At least 2 of the 17 directors are individuals who are Indigenous or belong to a First Nation.

This complex allocation of seats would achieve one important goal, from the legal profession’s point of view: It would ensure that lawyers will continue to constitute a majority of the members of the board (9/17). Elected legal services providers would also form a board majority (9/17), albeit not exclusively lawyers. In addition, directors appointed by the government (3) would be outnumbered by directors appointed by the rest of the board (5).

This arrangement would seem designed to assuage lawyers’ concerns that the government will threaten the independence of legal professionals through a stacked appointment process. Indeed, the proportion of government-appointed directors would actually decline under the proposed arrangement. On the new LPBC board, 17.6% of members (3 of 17) would be appointed directly by government; on the current Law Society board, 19.3% of benchers (6 of 31) are appointed directly by government.

The governance provisions of Bill 21 would suggest that the government’s primary interest is to scale back significantly (although not to a minority) the number of elected legal professionals on the regulator’s board. That would be consistent with the recommendations of Mr. Cayton’s report on law society governance, as well as with emerging standards of professional governance worldwide.

In my personal view, no member of a professional regulator’s board should be a licensee elected by other licensees (for reasons set out previously here at Slaw and at my Substack). I also believe that a professional regulator’s board should not be dominated by members of the regulated profession, since that creates a serious risk of both the perception and the reality of regulatory capture.

For these reasons, I do not support Bill 21’s allocation of 14 of the 17 director positions (9 elected, 5 appointed) to legal services providers. Too few board seats are occupied by people who need legal services, rather than those who sell them. It is asking a great deal of members of the public to believe their legal regulator will act in their interests when there are so few directors who can personally explain what those interests are. This is a significant drawback.

I would also question the allocation of elected director positions among the three types of authorized legal services professionals. Four elected seats are reserved for notaries and paralegals, who together number about 1,300 in BC, while five elected seats are set aside for lawyers, of whom there are more than 12,000. As noted, I oppose the election of service providers to regulatory director positions. But if there must be elections, then they ought to have at least a semblance of proportionality, which is missing here.

So my support for Bill 21 is by no means unqualified. I would have made different decisions about its provisions in certain respects. But I will not understate the scale of the changes to legal regulation set out here, or the impact they would have on both members of the public and the legal professionals who serve them. As a strong step in the right direction, I approve of this board structure, and I think it will increase the new regulator’s effectiveness and help boost the public’s confidence in its actions.

But this proposed arrangement is proving unsatisfactory to the legal profession and its deeply held belief that elected lawyers must continue to constitute a super-majority of the board of directors. That brings us to the critically important issue of lawyer independence.

Lawyer Independence

In its response to Bill 21, the Law Society of BC states: “The legislation tabled today fails to protect the public’s interest in having access to independent legal professions governed by an independent regulator that are not constrained by unnecessary government direction and intrusion. As legal professionals represent clients whose interests often diverge from those of government, there must be trust that the legal regulator is independent of government influence.”

The Law Society is correct to defend a legal regulator’s ability to resist government influence over lawyers. The independence of members of the legal profession from state interference is not a trivial matter — a substantial percentage of all litigation is between the government and its citizens, thousands of lawyers are themselves employed by the government, and thousands of other lawyers defend people charged by the state with criminal offences.

As recently as ten years ago, we might have felt more confident that provincial governments would not lightly interfere with the administration of justice or the rule of law. The Alberta Sovereignty Within a United Canada Act, Quebec’s own “Bill 21” that discriminates on the basis of religion, and a Premier of Ontario who openly intends to appoint only “tough on crime” judges, should disabuse us of that notion today. The state will not always be benevolent. The government will not always act in the best interests of the public or in accordance with the Constitution.

But with Bill 21’s new governance configuration, the government appears even less able to influence the regulator’s actions than it is now. The three government appointees would constitute a smaller percentage of the new board than of the current one. The five non-government-appointed directors would be chosen by the other twelve directors, nine of whom are elected legal professionals. Lawyers would continue to constitute a majority of all directors on the board. So would elected legal professionals of all stripes.

I believe it would actually be easier to make a case that a threat to the regulator’s independence arises from the licensees it is regulating. As Harry Cayton noted in his 2021 report on Law Society governance: “Benchers serve for only two years before having to stand for re-election, so their attention is directed inevitably to their constituency of fellow lawyers rather than to the public.”

A regulator that wishes to maintain public confidence must be, and must appear to be, free of undue influence from the professionals it regulates. This is difficult to achieve when almost all directors are professionals themselves and more than half are elected by their peers. There is not even a provision in Bill 21, as there is with the Solicitors Regulation Authority of England & Wales, that the Chair of the new regulator must not be a lawyer. Regulatory independence is a two-way street.

Related to concerns about independence, some lawyers have also expressed a need to maintain “self-regulation” with the new regulatory body. But it is important to remember that lawyers are not fully autonomous entities. Every law society in Canada was created by an Act of government that granted to lawyers, through a delegation of legislative authority, the privilege of governing their affairs to a limited degree.

Nor is “self-regulation” a universal feature of lawyer governance worldwide. In Australia, England, and Wales, independent third-party agencies have been regulating the legal profession for between 15 and 20 years without any reported adverse effects on lawyers’ independence from the state.

Finally, it is important to note that lawyers are not bereft of protection outside the boundaries of their regulator. Every lawyer in Canada is an officer of the court, and every ethical duty owed by lawyers is secondary to the duty they owe to the court. Judges have not hesitated to protect the independence of the legal profession when they feel it is under legitimate threat.

If a government were to attempt a de jure or de facto takeover of a legal regulator, with state appointees filling a majority of director roles or otherwise improperly acting to circumscribe lawyers’ professional duties, such action would easily pass the threshold to warrant judicial intervention. There are other safeguards in the system than those provided for in the regulator’s governance model.

It is critically important that a legal regulator not enable or facilitate state interference with lawyers’ independence. But that is not the only, or even the primary, purpose of legal regulation. A legal regulator exists to govern and regulate the legal profession(s) in the public interest. Lawyers’ independence must therefore be protected in ways that support and are consistent with that paramount interest.

Conclusion

Bill 21 represents a transformative approach to legal regulation in British Columbia, aiming to modernize the governance of legal professionals in a way that aligns with both public expectations and the interests of the legal professions. I understand lawyers’ concerns that BC’s proposed new legal regulator would pose a serious risk to their independence from state interference, which I agree is extremely important to protect.

But I believe the governance model proposed in Bill 21 would maintain safeguards more than sufficient to protect that independence. A super-majority of elected lawyers on the regulator’s board is not the only way or the least onerous way to protect lawyers’ independence from the state. But a super-majority of elected lawyers does compromise the public’s perception, and sometimes the reality, of the regulator’s independence from its licensees.

I believe Bill 21 would help to enhance the accessibility of legal services across BC without impairing the independence of lawyers. I hope that it becomes law, and that it inspires similar regulatory reform efforts elsewhere in Canada.

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Jordan Furlong is a strategic consultant, forecaster, and legal market analyst who studies the impact of the changing legal world on law firms and legal organizations. He has written reports on lawyer licensing and competence for two Canadian law societies, and he has addressed thousands of lawyers and legal professionals in Canada, the U.S., Europe, South America, and Australia over the last 15 years.