Responsible delegation: Annual corporate filings and updates
Responsible and efficient delegation is an important skill for any lawyer. But there are limits as to when and how certain tasks can be delegated to non-lawyers.
Recently, LAWPRO has seen situations where corporate filings are handled by administrative staff such as clerks, without specific authorization or review from a supervising lawyer. This sometimes includes a client dealing directly with corporate clerks for the purpose of annual corporate filings and updates. This is a dangerous practice that leaves the lawyer unaware of the corporate client’s circumstances and may prevent the provision of important legal advice.
Keep in mind, lawyers are responsible for supervising and reviewing the work of their staff. Improperly delegated work can lead to malpractice claims and may be in contravention of the by-laws of the Law Society of Ontario.
Here are a few things to remember when delegating the administration of corporate filings.
Law Society restrictions on delegating to corporate clerks
The Law Society of Ontario’s by-law 7.1 expressly lays out restrictions on what work may be properly delegated to non-lawyers.
A corporate clerk should not, for example, deal directly with a client to handle annual corporate filings and updates, without the knowledge and instruction of a supervising lawyer. The lawyer must maintain a direct relationship with the client at all times during the retainer (s. 4(1)(b)). A non-lawyer is also not permitted to “act finally” in respect of the affairs of a client (s. 4(1)(h)).
Importantly, a corporate clerk is not permitted to take instructions directly from the client (s. 5(1)(c)). This means that corporate filings and updates should not be handled directly by the clerk without the knowledge, supervision, and review of a lawyer.
Supervision and review of corporate filings and updates is essential as it means that all relevant legal changes that could affect the client’s annual filings and updates are brought to the client’s attention and appropriately addressed.
Some other restrictions on what may or may not be delegated are relatively straight forward: Lawyers should not delegate the provision of legal advice, the representation of a client before an adjudicative body, or the conduct of negotiations with third parties, other than in accordance with the Rules and the Law Society Act. Correspondence, other than routine administrative correspondence, must be signed by the supervising lawyer, and non-routine documents should not be forwarded unless they have been reviewed by the lawyer.
At a fundamental level, a lawyer assumes responsibility for all tasks and functions delegated to a non-lawyer, such as a corporate clerk. Lawyers may only delegate tasks that a non-lawyer is competent to perform, and a non-lawyer should not act on any matter without instructions from the lawyer. A lawyer is required to directly supervise and should review any delegated tasks and the performance of non-lawyers should be reviewed at frequent intervals.
Effective delegation leads to effective work-product
Knowing when and what to delegate is an important element of knowing how to delegate. Responsible delegation means that non-lawyers are advised of the scope of their responsibilities and any limitations on time and resources. Client instructions should be received by the supervising lawyer, and appropriate work can then be delegated with complete knowledge of the client’s situation and needs.
For more information on delegating responsibly, take a look at our articles on Delegating responsibly and effectively, and the Supervision of employees, and consult Chapter 6 of the Rule of Professional Conduct for current guidance from the Law Society of Ontario on delegation and supervision.
Leave a Reply