Deloitte Class Action Indicative of Legal Future

• Author: Omar Ha-Redeye
• Date: March 11, 2018

Earlier this year, Justice Perell approved a replacement class representative in Sondhi v. Deloitte Management Services LP on a motion for what has already been an exhausting certification process in a class proceeding.

The matter involves a class, who although technically are lawyers, have not been considered as such by their employer or the parties procuring their services. These members typically consist of younger lawyers and new graduates who have been unable to otherwise find employment as lawyers in a traditional context.

I do know many of these young lawyers. I know that they are bright and talented, and would likely make excellent lawyers in a traditional context. But they are just one of the many casualties of the changing legal market, where downward pressures for cost, and increase ability to make demands on otherwise unemployed or underemployed labour supplies.

There’s nothing particularly nefarious about what the defendant was doing here, which was taking advantage of the fact that there has been unemployment in the Canadian legal market for the past decade, particularly pronounced among young lawyers. If anything, they are providing them with opportunity, and some limited experience, which may otherwise help them in their careers down the road.

The majority of these young lawyers are engaged in document review. Not particularly glamorous work, but not unknown to young associates and articling students in large firms across the country. What some firms have realized is that they can outsource this less desirable work to a third-party, and potentially save money in doing so.

Several firms have experimented with conducting this outsourcing overseas, particularly in common law jurisdictions such as India, where the savings are even more significant. Repatriating this work to Canada has been possible given the changes in our domestic job market, and also based on the inevitably superior product often provided by lawyers who are educated and trained in this jurisdiction, with English as their first language.

What gives rise to the class action is that these individuals are characterized as independent contractors, and thereby benefits under the Employment Standards Act such as vacation pay, public holiday pay, overtime, and compensation for improper remittances. Although lawyers would fall under the exclusions for overtime and some of the other protections under the Act, this arrangement was apparently more financially beneficial for the employer because they could provide compensation well below the going rates for junior associates in law firms.

My understanding is that they are also required to obtain their own insurance and maintain good standing with the law society, even though their employer claims they are not providing legal services. This has understandably given rise to critiques that this approach has really been an attempt to circumvent the regulator, apparently with much success to date.

Justice Belobaba described the case in the following terms in the replacement representative ruling last year,

[3] Like many unemployed lawyers in the Toronto market who are between jobs or pursuing other careers, Shireen Sondhi earned extra money as a document reviewer. As already noted, document reviewers are hired by a document review company as independent contractors to work...