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Joseph Groia, Chair of Audit and Finance Committee

LSO approves 2022 budget, reduces annual fees, restores funding to libraries

Monday, November 01, 2021 @ 9:07 AM | By Amanda Jerome

After a lengthy debate on efficiencies at the Law Society of Ontario (LSO), the society’s governing body approved the 2022 budget, which reduces annual fees for lawyers, paralegals and licensing candidates.

In the coming year, lawyers’ fees will decrease by $60, for an annual fee of $1,813 and paralegal fees will decrease by $9, for an annual fee of $955.

Moving licensing examinations online has enabled a reduction in related expenses for licensing candidates. Licensing fees for lawyers will be reduced by $300, while paralegal candidate fees will be reduced by $100, as of May 1, 2022.

Chi-Kun Shi, LSO bencher

Before the budget was approved, Convocation, which was held virtually on Oct. 28, was presented with a motion by bencher Chi-Kun Shi directing the LSO to “develop for consideration an alternative budget with a total spending reduction of 10 per cent, a substantial portion of which shall consist of total staff number reductions, to be presented to Convocation for its final review before voting on a final budget for 2022.”

Treasurer Teresa Donnelly noted that the motion had been framed as an amending motion to the budget. However, she determined it was actually a deferral motion as Shi’s motion asked for a second budget to be developed.

In presenting her motion, Shi stressed that the “issue of efficiency with which the law society conducts its business is a concern that’s been raised at various times by different benchers.”

“I noticed that there is simply no committee, nor is there any Convocation directive to deal with this issue. There seems to be, at present, a vacuum, or an absence of governance on the issue of efficiency,” she said, noting “it’s time for Convocation to step up and assume leadership on this very important issue.”

“Demonstrating sound financial governance and always striving to be frugal and justify getting value for the way we deploy the membership’s money is a way for us to demonstrate respect for [the] membership who pay for our budget,” she added, explaining that it’s her hope that the motion “could be the start of what should really become an annual tradition.”

Murray Klippenstein, LSO bencher

Shi said that when the LSO sits down to write its budget once a year, it should be a time for a “critical review and asking of the question: can we do better? How can we do better? How can we keep more dollars in membership’s pocket? And deliver more value for each of the membership’s dollar that we spend?”

The motion was seconded by Murray Klippenstein, who stressed that LSO members are “not cash cows.”

“It is perhaps easy for us here at the law society to slide subconsciously into something like that assumption because we are in an unusual position in that we are gatekeepers of a monopoly in which anyone who wants to pursue a potentially rewarding and honourable career in law, as a lawyer or paralegal, has to pay to us the fees that we set every single year for the indefinite future. If they want to pursue such a pathway, they have no choice and we as a licensing body have no competition in that role that might pressure us to watch our costs on pain of losing customers,” she said, noting that annual fees are “not a small burden for our members.”

Klippenstein believes the LSO has a “responsibility,” even if it has “no competition as such, to be very mindful of the situation of our members and thus indirectly of the public that they serve.”

Joseph Groia, chair of the Audit and Finance Committee

Chair of the Audit and Finance Committee, Joseph Groia, responded by saying the “proposed deferral raises significant corporate governance issues for Convocation to consider.”

Groia noted that the 2022 annual budget had “the unanimous support of the Audit and Finance Committee and the committee, as well as many other benchers, have worked hundreds of hours to consider the balancing of the needs of the public with the needs of the law society to regulate in the public interest.”

Shi’s motion “sidetracks Convocation from that important work,” Groia said.

“It suggests that somehow the committee is not mindful of the need to be prudent and to be frugal with the money that we raise from licensees. Indeed, the motion itself starts with a ‘whereas’ that suggests that we’ve declined to deliberate on budget reduction. Nothing could be further from the truth,” he stated.

Groia also stressed that the motion “proposes bad financial planning.”

“It’s simply not good financial planning or good regulatory oversight to start with a chainsaw approach of 10 per cent from the top down and then to say, ‘go away and figure out what services we’re going to cut,’ how many families we’re going to get rid of and to be disrespectful of the hard work that’s been done by our staff,” he added, noting that the plan proposed by Shi is also “bad for protection of the public.”

Bencher Michael Lesage disagreed with Groia’s comments, noting that in the past, the LSO has “operated a subsidized restaurant” and “blown $600,000 on a subway advertising campaign.” He also noted that the budget suggests increasing bencher and human resources expenses.

Bencher Gary Graham opined that “trying to have influence at the Convocation level on the budget has proven very difficult.”

“There seems to be no way for Convocation to guide staff in setting the budget spend level. There’s no process at the beginning of the year, at the front end of the budget, where we have a discussion and a consideration of what the mandate is, what we need to do, what we would like to do, what it might cost and where we expect the spending to land, and then give staff instructions on ‘go out, create a budget with Audit and Finance and bring it back for approval,’ ” he said, adding that the budget comes to Convocation and committee “as a done deal.”

Bencher Andrew Spurgeon said Shi’s motion was “disturbing.”

“It’s not in regular order; it’s ill conceived, and frankly, I don’t think it’s serious,” he said, stressing that the motion is “an offence to those members of our bench who have devoted thoughtful consideration and a lot of hard work to crafting this even-handed … budget.”

Spurgeon raised concerns about cuts to LiRN Inc. (Library & Information Resources Network) and encouraged people to reject the motion.

Bencher Cecil Lyon suggested a “friendly amendment” to Shi’s motion, which would alter the last line and change the budget date from 2022 to 2023, so Convocation could get “an early start to a comprehensive budgeting process where Convocation sets the tone rather than staff.” However, Shi rejected the amendment.

Bencher Jonathan Rosenthal described the motion as “crowd pleasing.” He argued that the real issue is about “process fairness.”

Rosenthal noted that in the past, bencher John Fagan asked for a committee appointment to be adjourned because he was only given 24 hours’ notice. Both Shi and Klippenstein, he added, voted to adjourn that motion. However, he stressed, they had “the audacity to bring this motion with no notice, the night before, proposing a 10 per cent fee cut.”

He said the motion is “embarrassing” and claimed it had “ulterior motives.” The treasurer had asked Rosenthal repeatedly to not attribute motives to the motion, and thus cut him off for continuing to do so.

Shi clarified that other benchers “stated erroneously” that she was asking for cuts.

“I have not asked for a cut. I just wanted to see what a 10 per cent reduction in mostly staff and salary budget would look like. Just for consideration. I think that is within the purview of Convocation,” she said.

On a recorded vote, Shi’s motion failed 31-18 with one abstention.

On presenting the 2022 budget for approval, Groia noted the budget “looks to stabilize the law society’s operations as we hopefully come out of a global pandemic and to move us forward on the path to transformation and modernization of our IT systems, further streamlining of our operations, while at the same time ensuring that we can continue to deliver the services that are necessary to regulate in the public interest.”

“The budget allows us to return to more complete funding for all of our operations. It restores the funding to LiRN, which was taken away last year. It funds the regulatory sandbox that we have agreed to pursue and at the same time it does that by lowering annual fees for both lawyers and paralegals for the third consecutive year,” he added, noting that membership fees are the lowest they’ve been in more than a decade.

Audit and Finance Committee vice-chair, Lubomir Poliacik, added that “there’s clearly a perception from many benchers that theirs and in fact, the Convocation’s input into shaping the budget is too limited.”

“I think that we in audit and finance can probably do better and I would like to promise benchers that I will do my best, with Mr. Groia, to review our processes to see whether we can provide more input to benchers, and to Convocation generally, to shaping future budgets and to alleviate some of the alienation benchers feel towards the budget process,” he added.

A recorded vote on the budget passed 36-7 with seven abstentions. A motion to approve the budget for LiRN passed 46-2 with one abstention.

The 2022 budget includes “funding of $8.542 million to support LiRN Inc. and the operation of the 48 county law libraries in the system,” noted an LSO release, describing the LiRN network as “an integral source of legal information and law library services across Ontario.”

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