Compliance-Based Entity Regulation

Traditionally, law societies have regulated lawyers using a reactive, complaint-oriented, rules-based approach. Regulation of entities could be achieved by using similar prescriptive regulation – that is, telling entities what to do and how to do it.

The Prairie law societies are considering a proactive approach, called compliance-based regulation, or outcomes-based regulation, that focuses on mitigating risk and protecting the public.
This approach articulates management principles with which an entity must comply, but does not prescribe rules that tell the entity how it must achieve compliance. It provides an entity the flexibility and autonomy to determine the systems and processes that will enable it to achieve the outcomes. Entities would then report to the Law Society on whether they are in compliance with those outcomes.

For example, the Continuing Professional Development (CPD) requirements in Alberta already follow a similar model. Under the Alberta CPD model, lawyers must make an annual CPD plan and must declare to the Law Society that they have made a plan. Every lawyer must make and declare a plan that contains elements of professionalism and ethics. The Law Society provides suggestions on other possible elements of the plan and assists where necessary, but does not review the plan. The Rules of the Law Society of Alberta require lawyers to provide their plans to the Law Society upon request. While compliance-based entity regulation would not be identical to this process, it could be similar.

Non-compliance with the expected outcomes would result in some type of response from the Law Society. The Prairie law societies are considering a spectrum of regulatory responses, many of which would be remedial. If an entity is having difficulty complying with a management principle, the Law Society would work with the entity to improve internal management systems in order to avoid non-compliance. Law Societies would provide the resources but it is the firm that would undergo a practice audit. This might include using Law Society-developed resources or undergoing a practice audit to assist the entity to implement management principles. Ideally, disciplinary action would only be necessary if the entity refused to comply with the management principles.

In summary, compliance-based regulation is an outcomes-based model that focuses on the ethical culture and behaviour of a firm. When blended with our existing regulation of individual lawyers, the end result could be better professional and ethical practices, which ideally would result in improved delivery of legal services to the clients, ultimately benefitting and protecting the public.

Please click on both the "Management Principles" and "Compliance Systems" surveys below to answer all of our consultation questions.


Contributions to this consultation are closed for evaluation and review (Summer/Fall 2016). The Prairie law societies will report back on key outcomes.

Traditionally, law societies have regulated lawyers using a reactive, complaint-oriented, rules-based approach. Regulation of entities could be achieved by using similar prescriptive regulation – that is, telling entities what to do and how to do it.

The Prairie law societies are considering a proactive approach, called compliance-based regulation, or outcomes-based regulation, that focuses on mitigating risk and protecting the public.
This approach articulates management principles with which an entity must comply, but does not prescribe rules that tell the entity how it must achieve compliance. It provides an entity the flexibility and autonomy to determine the systems and processes that will enable it to achieve the outcomes. Entities would then report to the Law Society on whether they are in compliance with those outcomes.

For example, the Continuing Professional Development (CPD) requirements in Alberta already follow a similar model. Under the Alberta CPD model, lawyers must make an annual CPD plan and must declare to the Law Society that they have made a plan. Every lawyer must make and declare a plan that contains elements of professionalism and ethics. The Law Society provides suggestions on other possible elements of the plan and assists where necessary, but does not review the plan. The Rules of the Law Society of Alberta require lawyers to provide their plans to the Law Society upon request. While compliance-based entity regulation would not be identical to this process, it could be similar.

Non-compliance with the expected outcomes would result in some type of response from the Law Society. The Prairie law societies are considering a spectrum of regulatory responses, many of which would be remedial. If an entity is having difficulty complying with a management principle, the Law Society would work with the entity to improve internal management systems in order to avoid non-compliance. Law Societies would provide the resources but it is the firm that would undergo a practice audit. This might include using Law Society-developed resources or undergoing a practice audit to assist the entity to implement management principles. Ideally, disciplinary action would only be necessary if the entity refused to comply with the management principles.

In summary, compliance-based regulation is an outcomes-based model that focuses on the ethical culture and behaviour of a firm. When blended with our existing regulation of individual lawyers, the end result could be better professional and ethical practices, which ideally would result in improved delivery of legal services to the clients, ultimately benefitting and protecting the public.

Please click on both the "Management Principles" and "Compliance Systems" surveys below to answer all of our consultation questions.


Contributions to this consultation are closed for evaluation and review (Summer/Fall 2016). The Prairie law societies will report back on key outcomes.

Page last updated: 05 Apr 2017, 09:04 AM