Business Law in Canada 12th Canadian Edition by Richard A. Yates Solution manual
Chapter 1
Managing Your Legal Affairs
Learning Objectives
Discussion
A “sophisticated client” understands the role of the lawyer, and their own role as
client. This involves knowing when and how to hire a lawyer, the costs involved
and what can be done if the lawyer is not meeting your expectations. Good business
decisions can only be made with consideration of appropriate laws, whether the
client is able to access that information for themself, or through the services of a
lawyer. A sophisticated client also understands the importance of evidence, and
may change their procedures and those of the business in order to make sure the
evidence is there in the event of a dispute.
The client is the ultimate decision maker, but makes those decisions with the advice
of a number of experts, of which the lawyer is one. If clients deem other business
factors to be of greater importance, they may choose to accept some legal risk, but
it is an informed decision. Lawyers must follow the instructions of their clients
unless they are illegal or unethical (although a lawyer may always resign).
The decision about when to hire a lawyer starts when decisions need to be made as
to how the business will be organized, and whether to create a new business or buy
an existing one. It allows business owners to minimize their risks and make sure
they are in compliance with all laws. This would also apply to decisions about the
premises, financing, existing or new contracts, intellectual property and, finally,
• Explain the meaning of “sophisticated client”
• Examine the role of the lawyer
• Identify when to hire a lawyer and when to represent yourself
• Explain how to find an appropriate lawyer
• Review how lawyers bill their clients
• Describe legal aid
• Outline the procedure to follow to complain about your lawyer
• Discuss the ethics of lawyers and of clients
E XPLAIN THE
MEANING OF
“SOPHISTI-
CATED CLIENT ”
E XAMINE THE
ROLE OF THE
LAWYER
I DENTIFY
WHEN TO HIRE
A LAWYER
AND WHEN TO
REPRESENT
YOURSELF
Chapter 1: Managing Your Legal Affairs
Copyright © 2020 Pearson Canada Inc.
3
selling the business. For less significant decisions, clients may choose to inform
themselves, through the internet, or from the resources listed throughout this
textbook and in MyBusLawLab. Sophisticated clients will know when to do research
themselves and, if unable to obtain the information or understand the information
found, to seek legal advice. Small claims court trials are often conducted, due to the
relatively low monetary limits, unless the legal issues are too complex for the client
to handle themselves. Criminal matters should nearly always be handled by legal
counsel.
Finding an appropriate lawyer is difficult. Referrals from trusted friends or
associates with the same type of legal problems are good. Some provincial law
societies or branches of the Canadian Bar Association also have lawyer referral
services that provide names of lawyers who practice in specific areas of law. You
may have an initial consultation for little or no cost, and then decide if you wish to
pursue the matter and hire one of them. If not going through one of those services,
initial consultation costs will vary and should be confirmed with the lawyer in
advance. The lawyer you choose should be someone who you think may be suitable
to establish an ongoing relationship with your business.
Lawyers bill their clients for services either by a fixed fee, an hourly rate or by a
contingency fee based on a percentage of the money recovered on behalf of the
client. Clients are also responsible for paying disbursements, the lawyer’s out-of-
pocket expenses incurred, such as filing fees, long-distance telephone charges, etc.
Sometimes a lawyer will require a financial retainer to start a file, which operates
as a deposit against legal work performed.
Legal aid may be available for people with low income, but the eligibility varies
from province to province, so it’s best to check with the administrators of the
program in your province. What types of legal services are covered also varies, and
it is generally not available for business issues. Duty counsel is often available at
no charge in criminal court to provide advice, but not representation.
Law is a self-governing profession, with provincial law societies that serve this
function. Fee complaints are dealt with differently from province to province.
Complaints about a lawyer’s conduct are dealt with through the law society, which