Are You Practising Law?

When it comes to business and tax matters, it’s not unusual for clients to call on their accountants for assistance. However, CPAs should be mindful that they are not crossing the line into practising law when they provide advocacy services to clients.

Rule 213 and the Legal Profession Act

Rule 213 of the CPABC Code of Professional Conduct prohibits members and firms from associating with any unlawful activity. This includes breaching the Legal Profession Act. Under the Legal Profession Act, the “practice of law” is restricted to members in good standing with the Law Society of BC holding a practising certificate.

The “practice of law” includes “drawing, revising or settling a petition, memorandum, notice of articles or articles under the Business Corporations Act, or an application, statement, affidavit, minute, resolution, bylaw or other document relating to the incorporation, registration, organization, reorganization, dissolution or winding up of a corporate body … for or in the expectation of a fee, gain or reward, direct or indirect.” Practising law also includes appearing as counsel or advocate.

Other relevant rules in CPABC Code of Professional Conduct

We remind members of several rules in the CPABC Code of Professional Conduct relevant to providing services to clients. In our Code, a “registrant” means a member, a registered firm, a professional accounting corporation, or a student.

Rule 201 requires members to “act at all times with courtesy and respect and in a manner which will maintain the good reputation of the profession and serve the public interest.”The related guidance further reminds members that they “should be cognizant of and comply with the provisions of any legislative requirements pertaining to any of the registrant’s professional services.”

Rule 202 requires members to “perform professional services with integrity and due care” and “not allow his or her professional or business judgment to be compromised by bias, conflict of interest or the undue influence of others.”

The related guidance clarifies that “the requirement for an objective state of mind does not preclude a registrant from acting in an advocacy role for a client or from working to advance the best interests of an employer. A registrant’s effectiveness as an advocate in these cases is based on professional credibility, which is sustained by objectivity and integrity in addition to competence. However, a registrant must consider the ability to effectively advocate the client’s or employer’s position, while still maintaining objectivity and integrity. It may be possible to do so when the advocacy role is apparent in the circumstances and the position being advocated is supportable.”

“In any advocacy service, there is a possibility that circumstances may arise which stretch the bounds of performance standards, go beyond sound and reasonable professional or commercial practice or compromise credibility. Such circumstances may pose an unacceptable risk of impairing the reputation of the registrant, client and/or employer. In those circumstances, the registrant should consider whether it is appropriate to perform the service.”

The guidance goes on to remind members that “when acting as an advocate a registrant should bear in mind other provisions of the CPA Code, such as Rules 203 and 205. Rule 203 requires a registrant to sustain professional competence in relation to all professional services provided by the registrant. Rule 205 provides that a registrant may not associate with any letter, report, statement or representation which the registrant knows, or should know, is false or misleading.”

Finally, and more importantly, the guidance underscores that “a registrant, when acting as an advocate, should ensure that such an advocacy role does not constitute the practice of law.”

Word of Caution

The Law Society of BC takes a keen interest in non-lawyers practising law in contravention of the Legal Profession Act. In fact, when they encounter our members doing such a thing, the Law Society will likely refer them to CPABC for possible investigation. Moreover, your professional liability insurance policy does not cover any activities where you could be construed as practicing law. Therefore, we caution members to be careful when providing services to client and never to practice law unless they are licensed to do so by the Law Society.