Society newsNew Law Firm Registration – what does it mean and why?
New Regulations under the Legal Profession Act came into force January 2, 2018, introducing a significant development in law firm regulation: now, all new law firms in Nova Scotia must be registered before practising law and delivering legal services (see subregulation 4.8.4 and the New Law Firm Registration form).
But what does registration mean and what is its purpose?
The context for New Firm Registration is Legal Services Regulation, which reflects the changing nature of legal services provision and is marked by a shift in regulatory focus from individual lawyers to law firms, where appropriate. Most existing firms will only notice minor changes, as the primary regulatory focus will be on new practices and trust accounts.
New Firm Registration requires that prior to delivering legal services, the firm’s proposed Designated Lawyer – and other lawyers as appropriate – engage directly with Society staff about the nature of their practice, their business structure and management system, relevant practice standards, regulatory obligations (including trust accounting and client ID regulations, annual filing requirements, etc.), and more, depending on the unique requirements of the firm.
These conversations allow the Society to work with new practices to ensure they have an effective management system for ethical legal practice in place and appreciate the complexities of running a law firm and their regulatory obligations. It means that new firms have full opportunity to seek practice advice, ethical guidance and other support, prior to being overtaken with the demands of running their practice.
Operating a trust account
A key aspect of New Firm Registration relates to trust accounts (reg. 4.10). Law firms and practising lawyers must now be approved to operate a trust account, reflecting the principle that holding another person’s money in trust is a privilege, not a right for lawyers.
A lawyer or law firm (through its Designated Lawyer) must successfully complete the Trust Account Assessment in order to demonstrate their understanding of Part 10 of the Regulations and their ability to operate a trust account and maintain proper accounting records. They must also provide a certificate from a chartered professional accountant, confirming that the practising lawyer or law firm has in place a trust accounting system that will enable compliance with Part 10 of the Regulations. This new requirement responds to the risks associated with operating a trust account and introduces proportionate measures for mitigating that risk.
Prospective new firms are encouraged to reach out early to start a conversation with the Society about their plans. Already, Society staff have engaged with ten proposed new practices. The response to initial discussions has been overwhelmingly positive and we hope to continue a supportive dialogue as these practices evolve.
New firms can start the registration process by completing and submitting the New Firm Registration form, or by phoning the Society to speak with someone about new firm registration.
Jennifer Pink, Legal Services Support Manager, (902) 422-1491 / email@example.com