Law Society of Alberta takes a trip back to the future with its client ID rules

Law360 Canada (November 14, 2024, 10:42 AM EST) --

Jay Krushell

Just like Marty McFly in the Back to the Future movies, the Law Society of Alberta (LSA) is taking a trip through time, and in this article I will describe the storyline from its innocuous start to its dramatic ending.

The story starts on Sept. 30, 2019, when the LSA adopted the Model Client ID Rules published by the Federation of Law Societies of Canada (FLSC). At their core, those rules require lawyers, whenever they are providing legal services related to a transaction, to verify the identity of their clients using one of three identification methods: the government-issued photo ID method, the credit file method, or the dual-process method. The LSA was the first law society to adopt the Model Client ID Rules and the staff of the LSA did a lot of work to provide training and resources to make sure Alberta lawyers were aware of the new rules and had the tools to fully comply with them.

The first dramatic turn of events occurred in March 2020 when COVID-19 hit. As everyone will recall, that was a very chaotic time in the legal profession as we frantically tried to figure out how to make sure lawyers could continue to provide legal services to their clients. One thing that happened at that time was law societies across Canada, including the LSA, followed the lead of FINTRAC and introduced COVID-19 emergency measures, which allowed lawyers to verify the identity of their clients by having the client hold their ID up to a webcam during a video conference call.

This practice had previously been specifically prohibited because it is one of the least effective ways to verify someone’s identity but, in the COVID-19 chaos, this was a solution that could be quickly implemented by just about every lawyer, so it was adopted. Essentially, the LSA took a step back in time to remove the requirement of strict compliance with the client ID rules that had been adopted just five months earlier.

An interesting thing then started to happen: some lawyers started meeting with their clients virtually. Many of those lawyers found virtual meetings to be efficient and productive and many clients preferred being able to meet with their lawyers without having to drive to the lawyer’s office. This wasn’t the case for every lawyer and every client, but it is fair to say the popularity of virtual meetings between lawyers and their clients grew dramatically, partly because of the implementation of the COVID-19 emergency measures.

The characters in our story carried on for a couple of years and things seemed to settle into a very comfortable state. This equilibrium was upset when FINTRAC terminated the COVID-19 Emergency Measures for Reporting Entities effective March 31, 2023. As I described in my previous article, for a number of reasons Canadian law societies are highly motivated to have the Client ID Rules governing lawyers mirror the client ID rules enforced by FINTRAC. As a result, FINTRAC’s termination of its COVID-19 emergency measures forced law societies to react, and they slowly started terminating the COVID-19 emergency measures in their respective jurisdictions. These terminations did not always go smoothly as many lawyers had developed virtual workflows that were very efficient and profitable, and these lawyers were worried the termination of the COVID-19 emergency measures would threaten those workflows.

This tug of war between the law societies needing to follow FINTRAC’s lead and the desire of many lawyers to continue their digital workflows came to a head in Alberta in the summer of 2023. On July 18, 2023, the LSA sent a notice to the profession that terminated the COVID-19 emergency measures effective immediately. This announcement created quite the stir among Alberta lawyers (think of a mob of lawyers storming the LSA castle with pitchforks and torches). The LSA responded to this “feedback” on Aug 10, 2023, by sending another notice to the profession reinstating the COVID-19 emergency measures. This meant that Alberta lawyers could continue to verify the identity of their clients by having the client hold their ID up to a webcam during their virtual meetings and, again, things settled into a comfortable state.

This leads us to the dramatic ending of our story. On Oct. 3, 2024, the LSA sent a notice to the profession confirming the COVID-19 emergency measures would be terminated on Jan.1, 2025, and that changes had been made to the client ID rules to facilitate virtual interactions between lawyers and their clients. A summary of the changes that will come into effect in Alberta on Jan.1, 2025, is:

1. The COVID-19 emergency measures will be terminated, which means Alberta lawyers will no longer be able to verify the identity of their clients by having the client hold their ID up to a webcam. Alberta lawyers will still be allowed to meet with their clients virtually, but when they do so they must comply with the strict requirements of the client ID rules.


2. Lawyers will be allowed to use selfie/ID technology to satisfy the requirements of the government-issued photo ID method. This technology involves the client taking photos of their ID and their face. A computer then receives the photos and assesses the security features on the ID. It also compares the portrait on the ID to the selfie to make sure the individual presenting the ID is the person pictured on the ID.


3. Alberta lawyers can use selfie/ID technology, or the Credit File method and the Dual Process Method, to verify the identity of their client even if their client is not in Canada. Previously, a lawyer was required to use an agent to verify their client’s identity if the client was outside of Canada.

Despite this chaotic storyline, and to its great credit, the LSA has done a number of things that prove its commitment to stopping fraud, money laundering and terrorist financing. First, it has created the most robust legal Innovation Sandbox in Canada, which now includes a number of companies that offer digital ID tools that allow lawyers to comply with the requirements of the client ID rules. Second, the LSA is the only law society in Canada that requires digital ID companies to complete the Viola certification offered by the Digital Identification and Authentication Council of Canada, which helps ensure the efficacy of the digital ID tool. Third, it has fully adopted the amendments to the Model Client ID Rules published by the Federation of Law Societies of Canada. Finally, the LSA has published a number of excellent resources that explain the client ID rules and help Alberta lawyers comply with them.

To recap: the LSA introduced new client ID rules, it waived compliance with those rules because of COVID-19, it terminated the waiver of compliance, it then terminated the termination of the waiver of compliance and now, in the final act of this story, it has once again terminated the waiver of compliance. There has been a lot of back-and-forth but, as with the hero in any great story, the LSA has finally gotten to where it needs to be.

Jay Krushell is the Co-Founder, Chief Legal Officer and VP of Business Development for Treefort Technologies Incorporated, an Edmonton-based cybersecurity and digital identity business. Krushell went to law school at the University of Alberta and was called to the Bar in 1999. He articled at Witten LLP in Edmonton, and he stayed with the firm as an associate and then a partner until 2021 when he left. You can reach him at jkrushell@treeforttech.com.

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