Richard Yates ANSWER TO QUESTIONS FROM BACK OF CHAPTERS Chapter 1 Managing Your Legal Affairs- Answers to Questions 1. Explain the meaning of “sophisticated client”. A sophisticated client is confident, knowledgeable, up-to-date and understands the role of a lawyer. This includes when to represent him or herself and when to hire a lawyer, as well as the costs involved. 2. Why should the owner of a small business have a lawyer on “the team”? A lawyer is an expert, providing advice relevant to the client, allowing the client to make an informed decision. 3. Distinguish the role of the client from the role of the lawyer. The client is the decision maker, who consults a number of experts, including lawyers, in order to make decisions, Lawyers are experts in their field, providing advice, and are bound to follow the instructions of the client, once given. 4. “The elimination of ‘solicitor–client privilege’ would significantly undermine the integrity of the Canadian legal system.” True or false? Explain your answer. True. Solicitor-Client privilege ensures full and frank disclosure between a client and his lawyer. The value of the lawyer’s advice will be greatly reduced if it is based on incomplete information. 5. What are some examples of decisions that owners of small businesses make? What role can a lawyer play with respect to the making of these decisions? Organizational form of the business, whether to buy an existing business or create a new one, what are the relevant laws and regulations affecting the business and what constitutes compliance, issues with regard to purchase or lease of business premises, funding of the business, contracts with employees, suppliers and customers, intellectual property and finally sale of the business. 6. What role has the computer played with respect to the solicitor-client relationship? Computers allow clients to research easily accessible legal information on-line, rather than having to consult a lawyer for every decision. 7. “It is a good idea to hire a lawyer when you have been charged with a crime.” True or false? Explain your answer. True. If convicted, you will be punished and have a criminal record. 2 8. When you are trying to find a lawyer to help you, what are some sources of lawyer’s names? Yellow pages, referrals from friends or relatives, provincial law societies, lawyer referral services, provincial branches of the Canadian Bar Association. 3 9. What is the primary purpose of an initial consultation with a lawyer? To decide whether you will retain the lawyer and whether they will agree to represent you. 10. “Legal aid is available to anybody with a legal problem.” True or false? Explain your answer. False. There are financial limitations and limitations on the types of disputes legal aid will deal with. This also varies from province to province. 11. Briefly explain three ways lawyers bill their clients. Which of the three is most commonly used? Fixed fees – for specific tasks such as will preparation, purchasing a house or incorporation. Hourly rate – billing for time spent on the client’s file Contingency fee – charging a percentage of the amount the client collects, appropriate for personal injury or product liability cases. If the client does not collect, neither does the lawyer. The types of cases covered and allowable percentages vary from province to province. 12. What can a client do if she is unhappy with the bill she received from her lawyer? Attempt to resolve the dispute directly with the lawyer. If not successful, mediation may be an option. If mediation is not successful, the bill could be reviewed by court officials. The method of review varies from province to province. 13. “If a client loses money because of the carelessness of his lawyer, he will be compensated for his losses if he makes a complaint to the law society.” True or false? Explain your answer. False. The Law Society deals with disciplinary matters only, compensation would have to result from settlement, or if unable to do reach an agreement, a legal suit by the client against the lawyer. 14. When will a lawyer be disbarred? Lawyers who fail to follow the rules of conduct of the Law Society they belong to are subject to disciplinary hearings. If the conduct complained of is a serious breach, such as misuse of client funds, they may be disbarred. 15. “When a person acts unethically, she will also have broken the law.” True or false? Explain your answer. False. Ethics tells us what we should do; the law tells us what we must do. Every person breaking the law is acting unethically, but a breach of ethics is not necessarily breaking the law. 16. What is a code of business conduct? Should such a code be used by a small business? A statement of values and principles of ethical behaviour that establishes the principles and code of conduct that all employees, officers and directors of the business would be expected to follow. If done when the business is first established, it is probably the best way to ensure the long term adoption of these principles as the business grows