The Potential Hazards of Providing Legal Services Outside of Your Regular Employment

One of the updated questions in the recently completed Annual Lawyer Report (ALR) relates to professional liability insurance.

The question asked lawyers to indicate if they are employed by an entity for which there is either a reduced insurance levy or an exemption from the levy and there was an added confirmation:

• Insured Legal Aid: I confirm that I am providing legal services only through my legal aid employer and will not provide legal services to the public outside of my primary employment.
• Insured Provincial Government: I confirm that I am providing legal services only through my Provincial Government employer and will not provide legal services to the public outside of my primary employment.
• Exempt Federal Government: I confirm that I am providing legal services only through my Federal Government employer and will not provide legal services to the public outside of my primary employment.  

In several of the completed ALRs, members who checked off one of these types of employment also indicated that they provide legal services outside of their employment.

In the case of legal aid staff lawyers and provincial government employees, the insurance levy is determined by LIANS’ actuary based upon claims experience of those entities relative to full practicing lawyers. The underlying premise for the reduced levy is that the only legal work these lawyers do is in the course of their specific employment.

Doing work outside of the reduced or exempt levy category increases the practice risk. And, if a lawyer paying a reduced levy provides legal services outside their specific employment, it may be that they should be insured as a full practicing lawyer.

As for corporate in-house lawyers, because we do not have a separate levy category for them, they are insured as full practicing lawyers. This means they have no insurance underwriting restriction to providing legal services outside of their employment, the only issue for them being whether their employer is okay with them so doing.

But for those who pay a reduced insurance levy or are exempt from the levy requirement, if you provide legal services outside your employment, you need to carefully consider the expanded risk you are courting and the potential impact it could have on the insurance program. Should you be providing such services, you should contact us to discuss it.