Our “Know Your Client” Requirements

Let’s talk about Retainer Agreements, and the requirements of a law firm to know their client.  Many people may not know but when you hire a lawyer, it’s not just a matter of saying “Yes,  you be my lawyer” and then pay them when they invoice you.  There is more to it and quite onerous on a law firm, and in my honest opinion, rightfully so.

Before Covid, our office would schedule an in person meeting with potential clients and the first thing that we would do (after checking to make sure there were no conflicts of interest) we would have the new client sign a Retainer Agreement.  This Agreement is the contract that sets out the terms of the relationship, the rates, payment terms, and any termination clauses. 

The second thing that would happen is we take the client’s photo ID, confirm it is the same person, and then photocopy the ID.  If the client is a corporation, we would need to obtain the Articles of Incorporation as well as the photo ID of the person who is instructing our offices. 

We then need to complete a New Client Information Sheet.  This is all part of the “Know Your Client” requirement that the Law Society requires for each client.  The information that we are required to have on the client is their home address, phone number, occupation and place of employment.  In the matter of a Corporation, we are also required to know who the officers, director and shareholders are. 

Not much changed once Covid hit with the exception of now we can confirm the person by means of a video call, whether it be by Zoom or FaceTime. 

What do we do this information?  It is all collected and store safely in our firm, and that is the information we use in order to open your file. 

While it seems ridiculous that lawyers are required to know what your occupation is, but given the fraud, especially in real estate, the Law Society felt this was the best way to ensure lawyers are not being taken advantage of.  What do you think happens when your firm is retained by a fraudulent client?  You loose money, that’s what.  And if you don’t follow the Rules put out by the Law Society, you could also be looking at being disciplined. 

So when we ask you what your occupation is, please don’t think we are just being nosy.  We are just making sure we covering our butts. 

Christine Allan, Law Clerk