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Rachette

Is it normal to sign a separate independent contractor contract with the law firm as an articling student?

Ryn

This thread does not constitute legal advice. While there may be some useful information in here to jumpstart your search for answers, please reach out to the law society in your province if you have concerns about your relationship with your articling principal. Do not rely on any of the comments in this thread when making decisions.

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I am a law graduate who has been working as a paralegal with a small, newly formed law firm in Vancouver for the past few months. My boss is the only resident lawyer but there are a few other lawyers who have their own sole practices but associate with my boss's firm as independent contractors. There are a handfull of us who are employed full-time as support staff. When I was hired my boss knew I was looking for an articling position while I worked as a paralegal. To cut to the point, my boss is recently in a position where he can and will be my articling principal. However, he had told me that he will pay only 1/2 of the PLTC fee and wants me to switch my employment status from "employee" to "independent contractor" as a condition to letting me article with his firm. I would be his first articling student. He has not given me a clear reason why he wants me to sign an agreement to be an independent contractor with his firm in addition to the articling application I would submit to the BC Law Society, other than this is how it is usually done here in Vancouver with articling students. I am not sure if this really is the case and why.

 

Does this sound right? And can anybody advise on what type of contract a law firm usually signs with the articling student?

Edited by Rachette

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Almost every articled student I've known was an employee for a contract term, but not an independent contractor.

 

Also remember: no one here can give you legal advice!

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Have you negotiated a salary, or does he want to pay you based on billables? Could it be for tax reasons? You might want to take a look at the CRA's guidelines for distinguishing between employees from independent contractors.

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One would expect that the level of supervision and control required in an articling student / principal relationship would weigh heavily as factors.

 

I wonder if there is a case on it.

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One would expect that the level of supervision and control required in an articling student / principal relationship would weigh heavily as factors.

 

I wonder if there is a case on it.

 

Yea I think all the factors would weigh in one direction, just calling it something isn't determinative.  

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With respect to control, if a law firm wishes to hire a lawyer as an independent contractor, it will mean that only very minimal control can be exercised over the lawyer. A lawyer hired as an independent contractor should be free to refuse work given to him/her by others in the firm, allowed them to take vacations and days off as they please. Similarly, setting billable hour targets that a lawyer must meet would also suggest control factors favouring an employment relationship. Even things as simple as dress codes can be suggestive of traditional employment. In the final analysis, if a lawyer is truly an independent contractor, they will need to be allowed to control their workload, the manner in which they perform their work, and the times that they perform their work.

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Thanks for the comments. I suspect that my having an independent contractor status is for my boss's financial benefit and nothing more. He is presently paying his support staff, including me, minimum wage as an employee. If I switch to an IC contract he says he would deduct the 1/2 portion of my PLTC fee from my minimum wage salary over the nine month articling period, effectively being able to pay me less than the statutory requirement for employees. The IC contract would be between the firm and me, and the articling agreement is of course, signed between him, me, and the law society. His reasons are that he was on an IC contract when he was an articling student and had to pay for the whole  PLTC fee himself (although I suspect his principal paid him more than minimum wage as an articling student). He said that this is how it is normally done between firms and its articling students. 

Edited by Rachette

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Thanks for the comments. I suspect that the independent contractor status is for my boss's financial benefit and nothing more. He is presently paying his support staff, including me, minimum wage as an employee. If I switch to an IC contract he says he will deduct the 1/2 portion of my PLTC fee from my minimum wage salary over the nine month articling period, effectively being able to pay me less than the statutory requirement. The IC contract would be between the firm and me, and the articling agreement is of course, signed between him, me, and the law society.

 

He sounds like ... not a good person to work for. Do you have any other options?

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In Ontario at least anyways, there is no minimum wage for articling students. To be honest, it seems like it's your boss, and not you, who needs some advice about employment law.

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Yeah I was about to say, I thought articling students were generally exempt from Employment Standard Codes...which is sort of frightening but quite revealing.

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The Law Society of BC does not have any salary requirements between articling students and their principals. An articling principal can pay you nothing if you want to article under him/her. I don't have any other option other than to find another articling principal, which is not easy particularly for NCA students like myself as articling student positions are hard to come by. 

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Without tending too far into legal advice, I'm sure your would-be employer is hoping to protect himself from various potential liabilities and obligations by classifying you as a contractor, but it's a very common tactic for exactly this reason. When push comes to shove, the actual relationship is what will matter. And as noted above, I can't imagine how an articling Principal who is required to direct your work as a condition of your relationship could reasonably suggest you're an independent contractor. It's a bizarre argument. That said, it isn't really your problem. As long as your Principal is approved (and be sure of that) by the Law Society, your contractual relationship is only a problem if something happens, and even then it's more his problem than yours. Though this could prevent you from accumulating hours to qualify for unemployment, which would suck.

 

Bottom line, yes, it's very close to exploitative. But you're right, you have limited options. The arrangements reflect badly on this lawyer, but they are not your problem otherwise in really any foreseeable circumstance.

 

Hope that helps.

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Yeah I was about to say, I thought articling students were generally exempt from Employment Standard Codes...which is sort of frightening but quite revealing.

Is there a particular reason for this?

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The whole situation sounds exceedingly... odd? Might be worth getting in touch with the Law Society to see if they'd even recognize an articling relationship under the terms this guy is proposing. The LS describes the aritlcing relationship as between a student and principal, which seems very different then the relationship between a business and independent contractor. 

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Yea I think all the factors would weigh in one direction, just calling it something isn't determinative.  

Yea. This is employment law 101.

 

In any event, articling students in BC are exempt from the BC Employment Standards Act:

 

s. 31: The Act does not apply to an employee who is 

 

© a member of the Law Society of British Columbia under the Legal Profession Act or a person enrolled as an articled student under that Act,

 

 

 

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Is there a particular reason for this?

Most ESA's exclude certain professions because it is assumed that people in those professions are sufficiently sophisticated and have sufficient bargaining power that they can negotiate, or will be offered, better employment terms than the ESA's provide. Clearly, the ESA was drafted by people who are 50+ years old and lived through the golden years because I've seen some horrible shit done to articling students where the ESA could have provided substantial protection. 

 

Here's the list of excluded professions in the BC ESA:

 

https://www.labour.gov.bc.ca/esb/igm/esr-part-7/esr-s31.htm

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To me, it doesn't appear that an articling student would in any case be properly classified as an independent contractor by the CRA. This could cause troublesome tax implications for you come tax time. Also, as mentioned above if your employer considers you an independent contract you won't receive an ROE and you won't be paying EI premiums which means, simply put, you probably won't qualify for EI if you aren't hired back. You could be unemployed for months or more than a year after not being hired back so really your principal is shooting you in the foot for a tiny savings on his part.

Edited by Chrysander

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OP, call the law society to make sure this is all kosher.

 

I articled in Vancouver and I know dozens of people who did their articles in Vancouver and I have never heard of this practise.

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If you do decide to be an independent contractor, make sure you look up with how that effects your tax position.  You won't have an employer automatically deducting your income tax and so on.  You will need to put money aside to pay the CRA (if you are going to owe income tax / CPP payments at the end of the year).

 

Maybe have to charge the law firm pst/gst for the services you provide as well.

 

You will need to get a "how to run a small business" type book.

Edited by kurrika

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