Students Get Taste of Real Legal World (Tax Court of Canada Project)Print
by Drew Hasselback — Financial Post — April 11, 2012
Students Get Taste of Real Legal World
Evelyn Dormer and Denise Cooney, both third-year law students at the University of Toronto, have stuck it to the government.
Ms. Dormer and Ms. Cooney are two of the first six students to participate in a special program in which law students get the chance to represent clients who are fighting tax bills before the Tax Court of Canada.
There are plenty of opportunities for law students to argue simple cases in court, but most of those situations are limited to relatively minor criminal matters or small claims court disputes. The Tax Court program, a new initiative organized in part by Dentons (formerly Fraser Milner Casgrain LLP) and Pro Bono Students Canada, is unique because it’s about the only situation where law students can get on their feet before a real judge to litigate a corporate matter.
“In law school, the pro-bono chances are often restricted to poverty law. The opportunity to do some corporate work is minimal,” Ms. Dormer explains.
Ms. Cooney adds that she was drawn to the program because it offered a chance for some hands-on experience in court. “I thought it would be a fun opportunity.”
The pilot program connects students with litigants who can’t afford lawyers. Dentons (formerly FMC) Law tax litigators mentor the students and help them prepare the cases under the tax court’s “informal procedure” rules, which are designed for simpler hearings where less than $12,000 is at stake.
For their big day in court, Ms. Dormer and Ms. Cooney represented the owner of a commercial cleaning service. At issue was the relationship the owner had with a particular worker. The Canada Revenue Agency claimed the worker was an employee, but the business owner argued that the worker was an independent contractor. A tax issue arose because under the government’s interpretation, the business owner would be liable for the worker’s Canada Pension Plan and Employment Insurance contributions.
The law is fairly clear on the difference between contractor and employee, so the trial was a simple battle of facts that emerged from the examination of live witnesses. The students called two witnesses to the stand, while the Crown called one.
In the end, the judge found that the worker was an independent contractor. The students prevailed.
The litigation experience will benefit both students. Ms. Cooney will be articling with Paliare Roland Rosenberg Rothstein LLP, a boutique litigation firm. Ms. Domer will be articling with Filion Wakely Thorup Angeletti LLP, a noted employment and labour law boutique.
The financial crisis of 2008/2009 has caused many companies to rely more on inhouse counsel and less on outside law firms for their legal work.
The trend is revealed in a “census” the Association of Corporate Counsel completed during 2011. The ACC received about 5,600 responses, a significant rise from the number of responses received in the last major survey in 2006.
The 2011 data reveal the impact of the financial crisis. “Among those effects on the legal profession, as many observers have noted, were the beginnings of a power shift from large law firms to inhouse law departments,” states one of the slides from an ACC presentation on the results.
The degree to which companies rely on outside counsel varies depending on subject matter. In tax cases, for example, the number of companies relying on inhouse lawyers to handle legal matters dropped to 20% in 2011 from 30% in 2006. For mergers and acquisitions, reliance on outside counsel dipped to 28% in 2011 from 35% in 2006. There was even a drop to 65% from 69% in litigation, an area often left to the expertise of outside specialists.
The ACC believes that inhouse departments have stepped up hiring. Rather than looking for generalists who can help manage the company’s relationship with outside counsel, corporations are now hiring lawyers with unique expertise who can take care of specialized matters in-house, such as intellectual property. Reliance on outside counsel for IP matters fell to 40% in 2011 from 45% on 2006.
Pay of in-house counsel has increased. The number of inhouse lawyers making more than $300,000 rose to 22%, up from 19%.
The ACC believes part of this is due to the rise in importance of GCs within the corporation. “It should not be forgotten that the 2011 increase came after a severe recession when many salaries stayed the same or declined across the economy,” the ACC says.
Job satisfaction for in-house lawyers is remarkably high at 92%.
The vast majority of respondents in the global survey, 88%, work in the United States, but 6% indicated their primary office is in Canada.