Just the facts, please
By Sharon Matthews
It is all the rage to blame lawyers’ fees for making legal services unaffordable for the middle class. Like many popular topics, scratch the surface and the flaws are revealed.
In a recent report, “Report on the Earnings of Self-Employed Lawyers for the Department of Justice Canada in Preparation for the 2011 Judicial Compensation and Benefits Commission,”1 the author studied the earnings of self-employed lawyers by obtaining data from the Canada Revenue Agency. In 2010, the median income of 21,120 self-employed lawyers in Canada was $131,603. At the risk of stating the obvious, that means 50 per cent of self-employed lawyers earned less than $131,603 in 2010. Breaking down the statistics is even more revealing. The median income in regions other than metropolitan areas was $98,536. Twenty-five per cent of lawyers earn $60,000 or less. Only a few lawyers earn very high incomes – it is not until the 75th percentile where incomes are more than $250,000.
The report also notes that self-employed earnings cannot be compared to the earnings of employed individuals who have benefits such as extended health insurance, dental coverage, disability insurance and a pension plan. Such benefits add a significant value to the package; perhaps about 35 per cent.
This tells us a few things. First, the majority of lawyers earn good but not grandiose incomes out of which they must fund or self-insure for benefits and save for retirement.
Next, most lawyers serving communities outside major centres earn modest incomes. Their clients are their neighbours, their fellow business associates, people they socialize with and small business owners. Those lawyers’ fees balance the business imperative of keeping the rates affordable with earning enough to pay the overhead and taking home a modest living.
Don’t mistake me; there most definitely is an access to justice problem but the data shows that the value of legal services is not being inflated so that lawyers earn exorbitant incomes off the backs of the middle class. Legal services are valuable and the costs of providing them (legal education and overhead) are high. And because legal services are critically important and engage the public interest, the provision of them is carefully regulated.
The Law Society’s initiatives, on unbundling and on expanding the work that articled students and paralegals can do under the supervision of lawyers, deserve the support of the profession because they are part of the middle class access to justice solution.
That brings me to another pitfall of blaming lawyers for access to justice issues: targeting lawyers’ fees and the middle class not only ignores the facts but it turns the focus away from tackling the problem that is most acute, namely legal services for the impoverished.
Unfortunately, for the poor, low-cost legal services are irrelevant; they cannot afford the first dollar of a legal bill. The profession has worked hard on this issue through programs such as Access Pro Bono and the Salvation Army, and individually, in 2010, more than 5,000 B.C. lawyers reported doing 42 hours of pro bono work each. However, pro bono services can only be effective as a supplement to a properly funded legal aid system. That is why the CBABC has undertaken a fact-based public engagement program to advance the understanding for the imperative need for legal aid – see www.weneedlegalaid.com.
The problems pertaining to access to justice are many and complex. We must start with a solid factual base if we hope to solve them. Next time you hear someone blaming lawyers’ fees for access to justice issues, acquaint him or her with the facts.
1 December 13, 2011, By Haripaul Pannu
This article was published in the June 2012 issue of BarTalk. © 2012 The Canadian Bar Association. All rights reserved.