2020 Approved Budget 1 Table of Contents 1

2020 Approved Budget 1

Table of Contents 1 2 3 Budget Overview Annual Fees 2020 Budget at a Glance 4 Full Fee Equivalent Licensees Budget Vision & Approach 6 2020 Annual Fee Budget Focus & Development 8 Historical Annual Fees for Lawyers Key Factors Impacting the Budget Historical Annual Fees for Paralegals 11 12 13 14 2020 Budget Summary - Consolidated 16 2020 Budget Summary - Lawyers 17 2020 Budget Summary - Paralegals 18 2020 General Fund Expense Breakdown 19 2018 -2020 Budget Comparison 20 2020 Budget by Group 21 2018 -2020 FTE Comparison 22 4 5 6 Funding the Budget Operations by Division Other Funds How is the Budget Funded? Use of Fund Balances 24 25 Governance & Policy Support of Other Organizations Professional Development & Competence Professional Regulation & Tribunal Client & People Services Administration 2 27 31 37 43 50 56 Compensation Funds Capital Fund County Libraries Fund Errors and Omissions Insurance Fund 64 66 67 68

1 Budget Overview 3

Budget Vision & Approach Message from the CEO The process for the development of the 2020 Law Society of Ontario budget has been ongoing since early 2019. Having just completed one full year in office, the CEO, along with a new Senior Management Executive have taken the opportunity to reconsider the approach to operations and budget management. The organization has been through a period of change which included a focus on creating enhanced stability within and across divisions and prioritization of regulatory functions. The activity recalibrated the tone and approach of our work together, within operational units and with the Board. As a general principle, past budgeting exercises at the Law Society have tended to include allowances for policy projects and program implementation anticipated to be approved within a coming budget year. The approved budget for 2020 no longer anticipates the implementation of policy projects and programs, and therefore does not include any related budget estimates. For the 2020 budget, each division was requested to clarify projections based on a three year review of actual expenditures. This analysis, supported by the CFO and Finance team in partnership with Senior Managers, has produced a budget that more closely reflects anticipated actual spending and will tighten variances between projected and actual results. The change in approach has produced a budget that reduces the annual licence fee for lawyers and paralegals in 2020. 4

Budget Vision & Approach Message from the CEO This approach to budgeting has an impact on how the organization will address policy and program activities moving forward. As 2019 comes to a close, and 2020 policy deliberations move forward at the Board, approval of any new projects or programs will be presented on the basis that costs of implementation will not be incurred until the following fiscal period (2021). Alternatively, if a project or program is time sensitive or deemed critical, on recommendation by the relevant policy committee and confirmation of existing contingency funds by the Audit & Finance Committee, use of contingency funds may be recommended and approved by Convocation to the extent that monies remain available and priorities have been assessed. In addition to these modifications, the CEO has directed management to ensure that all proposals for policies, projects and programs be presented with cost/benefit/risk recommendations. This may, where appropriate, also include recommendations for the reduction of costs in other projects and programs, with a focus on avoiding policy and operational duplication. With this new approach, the organization will also be in a better position to address decision-making that results from the deliberations of two new task forces meant to address the scope of the Law Society’s work – the Proportionate Regulation Task Force and the Program Review Task Force. Management looks forward to working with newly elected and appointed Board members to further clarify the Law Society’s project and program approvals process and finances. 5

Budget Focus and Development Message from the CFO The 2020 budget has been developed with the objectives of: § § § focusing on the Law Society’s core operations and serving the public, licensees and candidates reducing the annual fee for licensees and maintaining a zero increase for candidates in the Licensing Process, and mitigating risk by ensuring the Law Society’s strong financial position is maintained. The 2020 budget also takes into account policy decisions that require incremental funding such as the enhancement of the Practice Management Helpline and trends in the licensee membership relating to the calculation of full fee equivalent paying licensees. The 2020 budget is also restructured to introduce a central operations contingency intended to fund unanticipated scenarios that may arise during the year such as extraordinary litigation matters or short term costs incurred to implement efficiencies that will result in long term savings. This consolidated approach to managing for possible in-year impacts allows for a reduction in budgeted funds across departments. More importantly, this approach supports centralized control of operational spending related to unanticipated situations with all such matters now requiring CEO approval and enhanced CFO financial and budgetary oversight. 6

Budget Focus and Development Message from the CFO This budget plans for the return of the lawyer Compensation Fund fund balance to the required level under the Law Society fund balance policies. This is the final year of a three year plan to restore the fund balance and includes an additional $5 million levied from lawyers. The effects of the grant limit change from $150, 000 to $500, 000 are now being realized as the initial receipt of claims begins. To ensure that the fund balance is adequate, and with the benefit of more information sinception of the increased grant level, an actuarial review of fund balance requirements based on most recent experience will be undertaken to support 2021 budget planning. The fee related to the paralegal Compensation Fund remains unchanged with risk to the fund balance managed with a grant limit of $10, 000. The capital budget incorporates funding for essential information technology and facilities initiatives. Constant investment in technology and its infrastructure is required to mitigate against the risks associated with out of date systems, untimely updates or lack of maintenance. With the Law Society owning a heritage building and grounds, maintenance of the premises is costly and complex, both from the perspective of maintaining its historical integrity and working with old infrastructure. The capital budget includes a contingency for in-year unanticipated or urgent needs. Spending against the contingency requires CEO approval with the CFO providing budgetary oversight. 7

Key Factors Impacting the Budget § Historical expenditure review by senior executives identified reductions for the 2020 budget totalling approximately $2. 8 million in comparison to the 2019 budget. § There is a net reduction of 6. 5 full time equivalent employees (FTEs) compared to 2019. § Funding for the Awareness Campaign’s media buy of $600, 000 is not included pending decision by Convocation to continue it, in which case it will be taken from contingency. § There will be a reduction of $515, 000 in the budget related to the bencher cost centre. This includes removal of the $370, 000 budgeted in 2019 to support a possible decision by Convocation to eliminate or reduce the 26 day deductible period for remuneration purposes. 8

Key Factors Impacting the Budget § Contingency funds intended for new policy, program or similar decisions of Convocation is set at $1, 000 in the 2020 budget, a reduction of $500, 000. § The provision for salary merit increases is 2% and is below CPI. § The full fee equivalent licensees for lawyers is projected to increase by 1, 400 to 44, 000. § The full fee equivalent licensees for paralegals is projected to increase by 100 to 6, 400. 9

2 Annual Fees 10

Full Fee Equivalent Licensees Annual fees for licensees are determined separately for lawyers and paralegals. Paralegals do not share in all the expenses of the Society nor benefit from all non-annual fee revenue. For example, paralegals do not contribute to the operations of Library. Co nor do they share in the portion of investment income transferred from the Errors & Omissions Insurance Fund as that fund is dedicated strictly to lawyer related insurance transactions between the Law Society and LAWPRO. The Law Society utilizes a three tiered fee structure depending on the nature of the licensee’s practising/employment status. Licensees practising law or providing legal services pay 100% of the relevant annual fee; those employed but not practising pay 50%; those retired or not working pay 25%. The number of licensees in each category are prorated to determine what the number of lawyers and paralegals would equate to at the 100% fee category. This is referred to in the budget materials as the number of full fee equivalent licensees (FFE). Lawyers Fee Category Estimated Number Paralegals Full Fee Equivalent Fee Category Estimated Number Full Fee Equivalent 100% 39, 500 100% 4, 300 50% 6, 800 3, 400 50% 3, 200 1, 600 25% 4, 200 1, 100 25% 2, 000 500 Total 50, 500 44, 000 Total 9, 500 6, 400 11

2020 Annual Fee Compensation Fund $219 Compensation Fund $13 [CATEGORY NAME] [VALUE] 11% 2020 Annual Fee For Lawyers 9% [CATEGORY NAME] [VALUE] 1% Capital Fund $91 2020 Annual Fee For Paralegals 4% $2, 066 90% 76% [CATEGORY NAME] [VALUE] 12 $1, 006 9%

$ 2, 500 44, 000 43, 000 $ 2, 000 42, 000 $ 1, 500 41, 000 $ 1, 000 40, 000 39, 000 $ 500 38, 000 $ - 37, 000 2015 FFE Lawyers 2016 General Fund Annual Fee Breakdown General Fund 2017 2015 2018 2019 Proposed 2020 Compensation Fund Capital Fund 2016 2018 2017 Library. Co 2019 2020 Approved $ 1, 563 $ 1, 555 $ 1, 531 $ 1, 598 $ 1, 693 $ 1, 574 32 71 87 300 226 219 202 194 191 182 69 47 104 91 91 Total Annual Fee $ 1, 866 $ 1, 867 $ 1, 916 $ 2, 183 $ 2, 201 $ 2, 066 FFE Lawyers 38, 100 39, 500 40, 200 41, 200 42, 600 44, 000 Compensation Fund Library. Co Capital Fund 13 Full Fee Equivalent (FFE) Historical Annual Fees For Lawyers

$ 1, 200 6, 500 $ 1, 000 5, 500 $ 800 4, 500 $ 600 3, 500 $ 400 2, 500 $ 200 1, 500 $ - 500 2015 2016 FFE Paralegals Annual Fee Breakdown General Fund 2017 2018 General Fund 2015 2019 Compensation Fund 2016 2017 Proposed 2020 Capital Fund 2018 2019 2020 Approved $ 912 $ 933 $ 925 $ 997 $ 1, 009 $ 902 Compensation Fund 15 16 17 12 15 13 Capital Fund 69 47 104 91 91 $ 996 $ 1, 046 $ 1, 100 $ 1, 115 $ 1, 006 6, 300 6, 400 Total Annual Fee FFE Paralegals 4, 700 5, 050 5, 600 14 6, 100 Full Fee Equivalent (FFE) Historical Annual Fees For Paralegals

3 Budget at a Glance 15

2020 Budget Summary - Consolidated 1 Annual Fee Revenue 2 Licensing Process 3 CPD 4 Other Revenue 5 Total Revenues 6 Salaries and Benefits 7 Operating 8 Program 9 General Fund 10 Capital Fund 11 Library. Co 12 Compensation Fund Approved 2019 Budget 100, 790, 100 14, 157, 500 8, 251, 000 10, 625, 700 133, 824, 300 69, 961, 200 4, 542, 300 45, 292, 300 119, 795, 800 4, 449, 900 8, 152, 900 10, 137, 100 Approved 2020 Budget Change 2019 Budget vs 2020 Budget 97, 305, 400 14, 478, 000 8, 251, 000 10, 693, 000 (3, 484, 700) 320, 500 67, 300 130, 727, 400 70, 483, 400 4, 518, 500 41, 757, 800 116, 759, 700 4, 586, 400 8, 019, 100 10, 073, 600 (3, 096, 900) 522, 200 (23, 800) (3, 534, 500) (3, 036, 100) 136, 500 (133, 800) (63, 500) 13 Total Expenses 142, 535, 700 139, 438, 800 (3, 096, 900) 14 Excess of Expenses over Revenues (8, 711, 400) - 15 E&O Surplus Investment Income 16 Fund Balances (8, 711, 400) 1, 200, 000 7, 511, 400 17 Total Use of Fund Balances 8, 711, 400 - 1, 200, 000 7, 511, 400 8, 711, 400 16 -

2020 Budget Summary - Lawyers Approved 2019 Budget Approved 2020 Budget Change 2019 Budget vs 2020 Budget 1 Annual Fee Revenue 93, 761, 900 90, 873, 900 (2, 888, 000) 2 Licensing Process 11, 860, 900 12, 106, 400 245, 500 3 CPD 7, 322, 800 - 4 Other Revenue 5 Total Revenues 6 Salaries and Benefits 7 Operating 8 Program 9, 375, 400 9, 434, 600 122, 321, 000 119, 737, 700 59, 200 (2, 583, 300) 61, 912, 400 62, 348, 400 436, 000 4, 034, 100 4, 016, 800 (17, 300) 40, 677, 300 37, 727, 900 (2, 949, 400) 9 General Fund 106, 623, 800 104, 093, 100 (2, 530, 700) 10 Capital Fund 3, 876, 600 4, 000 127, 400 11 Library. Co 8, 152, 900 8, 019, 100 (133, 800) 12 Compensation Fund 13 Total Expenses 14 Excess of Expenses over Revenues 15 E&O Surplus Investment Income 16 Fund Balances 17 Total Use of Fund Balances 9, 990, 900 9, 944, 700 128, 644, 200 126, 060, 900 (46, 200) (2, 583, 300) (6, 323, 200) - 1, 200, 000 - 5, 123, 200 - 6, 323, 200 - 17

2020 Budget Summary - Paralegals Approved 2019 Budget Approved Change 2020 2019 Budget vs Budget 2020 Budget 1 Annual Fee Revenue 7, 028, 200 6, 431, 500 (596, 700) 2 Licensing Process 2, 296, 600 2, 371, 600 75, 000 3 CPD 928, 200 - 4 Other Revenue 1, 250, 300 1, 258, 400 8, 100 5 Total Revenues 6 Salaries and Benefits 7 Operating 8 Program 11, 503, 300 10, 989, 700 (513, 600) 9 General Fund 10 Capital Fund 11 Compensation Fund 12 Total Expenses 13 Excess of Expenses Over Revenues 14 Fund Balances 15 Total Use of Fund Balances 8, 048, 800 8, 135, 000 86, 200 508, 200 501, 700 (6, 500) 4, 029, 900 (585, 100) 13, 172, 000 4, 615, 000 12, 666, 600 (505, 400) 573, 300 582, 400 9, 100 146, 200 128, 900 (17, 300) 13, 891, 500 13, 377, 900 (513, 600) (2, 388, 200) - 2, 388, 200 - 18

2020 General Fund Expense Breakdown Consolidated Program $ 41, 757, 800 36% Operating $ 4, 518, 500 4% General Fund Total 2020 Expenses $116, 759, 700 Lawyers PARALEGALs Program $ 4, 029, 900 32% Program $ 37, 727, 900 36% Operating $ 4, 016, 800 4% Salaries & Benefits $ 70, 483, 400 60% Operating $ 501, 700 4% Salaries & Benefits $ 62, 348, 400 60% 19 Salaries & Benefits $ 8, 135, 000 64%

2018 – 2020 Budget Comparison 2020 $ 139, 438, 800 2019 $ 142, 535, 700 2018 $ 136, 643, 600 2018 Budget 2019 Expenses 2020 Salaries & Benefits Operating Program Capital Fund 66, 951, 300 4, 449, 500 39, 910, 500 4, 300 7, 993, 000 13, 035, 000 136, 643, 600 69, 961, 200 4, 542, 300 45, 292, 300 4, 449, 900 8, 152, 900 10, 137, 100 142, 535, 700 70, 483, 400 4, 518, 500 41, 757, 800 4, 586, 400 8, 019, 100 10, 073, 600 139, 438, 800 Annual Fees Licensing Process CPD 2018 96, 652, 300 Budget Funding 2019 100, 790, 100 2020 97, 305, 400 Other Revenue Library. Co E&O Surplus Compensation Fund Balances Total 13, 268, 300 8, 686, 000 10, 495, 600, 000 6, 941, 400 136, 643, 600 14, 157, 500 8, 251, 000 10, 625, 700 1, 200, 000 7, 511, 400 142, 535, 700 14, 478, 000 8, 251, 000 10, 693, 000 1, 200, 000 7, 511, 400 139, 438, 800 20

2020 Budget By Group [SERIES NAME] [VALUE] 20. 5% 125. 5 FTEs [SERIES NAME] [VALUE] 8. 2% 81. 0 FTEs [SERIES NAME] [VALUE] 3. 3% No FTEs $139, 438, 800 [SERIES NAME] [VALUE] 31. 9% 229. 0 FTEs [SERIES NAME] [VALUE] 23. 2% 160. 5 FTEs [SERIES NAME] [VALUE] 8. 2% No FTEs 21 [SERIES NAME] [VALUE] 4. 7% 12. 5 FTEs

2018 -2020 FTE Comparison 2020 [VALUE]FTEs 2019 [VALUE]FTEs 2018 [VALUE]FTEs 22

4 Funding the Budget 23

How is the Budget Funded? Sources of Revenue Annual Fees Licensee fees account for approximately 75% of total revenue sources in 2020. The annual fees represents the amount paid by lawyers and paralegals to support the operations of the Society. For 2020 the annual fee for lawyers is $2, 066 and for paralegals is $1, 006. Licensing Process fees represent the next significant component of revenue collected by the Society, making up approximately 11% of Society revenues, with continuing professional development fees being the third largest contributor at approximately 6%. The remaining 8% of revenue is from a variety of sources including investment income, royalties, late fees, catering and events, and additional licensee fees for professional corporations, Law Society referral service and certified specialist. Licensing Process Fees Licensing process fees are the fees paid by licensing candidates enrolled in the lawyer licensing process and the paralegal licensing process. The fees are $4, 710 and $1, 400, respectively. Continuing Professional Development Continuing professional development revenues are collected from lawyers, paralegals and others for attendance, in person, online or on demand at Law Society professional development programs. Licensing Process Fees 11% Annual Fees 74% Sources of Revenue $130. 7 million Continuing Professional Development 6% Other 8% Catering and Events 18% Breakdown of Other Revenue Investment Income 20% Late Fees 15% 24 By-Law Administration Fees 6% Ordered Costs 4% Payment Plan Fees 4% Law Society Referral Service 3% Certified Specialist 3% Miscellaneous 14% Lexis Nexis Royalties 13%

Use of Fund Balances The Society has fund balance management policies that prescribe the appropriate range of balances to be maintained in both the General and Compensation Funds. [CATEGORY NAME] 58. 8% [VALUE] When balances exceed the policy approved minimums, options are available to utilize a portion of the fund balance to mitigate annual fees. [CATEGORY NAME] 27. 4% [VALUE] Fund Balances Used This is a best practice in not for profit budgeting and the 2020 budget proposes the utilization $7. 5 million of accumulated fund balances from the lawyer and paralegal General Funds and $1. 2 million from the E&O Fund. $8. 7 million [CATEGORY NAME] 13. 8% [VALUE] This will not impair the Society’s financial position or risk being outside the policy approved fund balances and will positively impact the setting of annual licensee fees. 25

5 Operations by Division 26

Governance & Policy 27

Overview Non-AF Revenue 3% Governance & Policy The Law Society is governed by a board of directors, known as benchers which includes lawyers, paralegals and appointed representatives (non-lawyers and non-paralegals). The Policy Division groups together a number of functions important to the corporate and governance interests of the Law Society, including policy, committee and Convocation support. Bencher Convocation • Convocation governs the Law Society of Ontario • Benchers set policy and determine other matters related to the regulation of Ontario’s lawyers and paralegals through committee work and Convocation board meetings • 44% 2020 Budget G&P Portion of LSO Expenses $6. 6 million 4. 7% 2020 Funding of G&P Expenses $6. 0 million 4. 6% 9% Annual Fees 97% Policy – Equity Initiatives Office of Treasurer • 47% Under the Law Society Act, the Treasurer is the president and Chair of the Board of the Law Society At the Law Society Tribunal, benchers sit on hearings as adjudicators to hear discipline cases concerning lawyer and paralegal conduct, competence and capacity 28 • Supports Committees and the Benchers as they make decisions governing the regulation of lawyers and paralegals in the public interest • Develops policy, in collaboration with Benchers and Management, in the Committee process • Assists in strategic communications and supports organizational alignment of new policy • Manages the administration of committees, working groups and task forces • Develops and implements equity policies and initiatives pertaining to the professions

Operating Budget Summary Governance & Policy 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Governance & Policy Total 2, 038, 100 2, 078, 900 2, 495, 300 2, 135, 200 Operating Expenses 106, 700 108, 800 126, 800 Program Expenses 2, 510, 100 2, 698, 700 5, 455, 600 4, 294, 400 Salaries and Benefits Total Expenses 4, 654, 900 4, 886, 400 8, 077, 700 6, 556, 400 Total Non-Annual Fee Revenues 238, 700 243, 500 Excess of Revenues Over Expenses / (Expenses Over Revenues) (4, 416, 200) (4, 642, 900) Full Time Equivalent 190, 000 (7, 887, 700) 190, 000 -18. 8% 0. 0% (6, 366, 400) 15. 5 12. 5 Items of Note • The decrease in salaries and benefits is the result of a reduction of three FTEs in the Policy division. • The change in the program expenses budget is due to a return to the traditional $1 M contingency fund intended for new policy, program or similar decisions of Convocation, a reduction of $500, 000, and a reduction in the budget related to the bencher cost centre of $515, 000. The latter includes removal of the $370, 000 budgeted in 2019 in support of a possible decision by Convocation to eliminate or reduce the 26 day deductible period for bencher remuneration. There is a realignment of budget related to equity initiatives of $157, 000, with funding shifting to other divisions with appropriate skills to support equity initiatives. 29

Operating Budget Details Governance & Policy 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Bencher | Convocation Salaries and Benefits - - Operating Expenses - - Program Expenses 1, 729, 100 4, 097, 600 3, 093, 800 1, 902, 000 1, 729, 100 1, 902, 000 4, 097, 600 3, 093, 800 Total Expenses Total Non-Annual Fee Revenues 238, 700 243, 500 Excess of Revenues Over Expenses / (Expenses Over Revenues) (1, 490, 400) (1, 658, 500) Full Time Equivalent 190, 000 (3, 907, 600) - 190, 000 (2, 903, 800) - Office of Treasurer Salaries and Benefits 54, 100 55, 200 100, 700 99, 700 Operating Expenses 5, 800 5, 900 20, 900 383, 000 390, 700 480, 800 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 442, 900 451, 800 602, 400 601, 400 - (442, 900) (451, 800) Full Time Equivalent - (602, 400) - (601, 400) 1. 0 Policy | Equity Initiatives Salaries and Benefits 1, 984, 000 2, 394, 600 2, 035, 500 Operating Expenses 100, 900 102, 900 105, 900 398, 000 406, 000 877, 200 719, 800 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 2, 023, 700 2, 482, 900 2, 532, 600 3, 377, 700 2, 861, 200 - (2, 482, 900) (2, 532, 600) Full Time Equivalent 30 - (3, 377, 700) - (2, 861, 200) 14. 5 11. 5

Support of Other Organizations 31

Overview 11% Support of Other Organizations 2020 Budget Support Portion of LSO Expenses The 2020 budget continues to include support for other organizations. 15% 2020 Funding of Support Expenses 2% $11. 4 million 8. 2% 70% $10. 5 million 8. 0% 2% Annual Fees 100% Federation of Law Societies of Canada • The national coordinating body of Canada’s 14 provincial and territorial law societies • The Federation supports the development of national standards of regulation Canadian Legal Information Institute (Can. LII) • Can. LII is a non-profit organization launched in 2001 by the Federation of Law Societies of Canada on behalf of its 14 member law societies to provide efficient and open online access to a comprehensive collection of current judicial decisions, legislative documents and secondary resources 32 Library. Co • Library. Co, a wholly-owned, not-for-profit subsidiary of the Law Society of Ontario, was established to develop policies, procedures, guidelines and standards for the delivery of legal information and library services across Ontario and to administer funding on behalf of the Society

Overview 11% Support of Other Organizations 2020 Budget Support Portion of LSO Expenses The 2020 budget continues to include support for other organizations. $11. 4 million 8. 2% 70% 15% 2020 Funding of Support Expenses 2% $10. 5 million 8. 0% 2% Annual Fees 100% Pro Bono Ontario Justice Education Network (OJEN) Law Commission of Ontario Federation of Ontario Law Associations (FOLA) • Pro Bono Ontario helps Ontarians who have essential legal needs but cannot afford a lawyer • FOLA is a non-profit organization that coordinates activities for county law associations • OJEN develops innovative educational tools that introduce young people to the justice system, help them understand the law, and build their legal capability • Advocates for a better justice system that recognizes the crucial role competent and professional lawyers play in that system • The Law Commission of Ontario is an independent organization that researches issues and recommends law reform measures to make the law accessible to all members of Ontario’s communities. 33

Operating Budget Summary Support of Other Organizations 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Support of Other Organizations Total Salaries and Benefits - Operating Expenses 55, 238 56, 300 64, 000 Program Expenses 11, 055, 544 11, 276, 700 11, 502, 700 11, 368, 900 Total Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 11, 110, 782 - 11, 333, 000 - (11, 110, 782) (11, 333, 000) Full Time Equivalent 34 - 11, 566, 700 - (11, 566, 700) - 11, 432, 900 - (11, 432, 900) - -1. 2% 0. 0%

Operating Budget Details Support of Other Organizations 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Federation of Law Societies of Canada Salaries and Benefits - Operating Expenses - 1, 155, 600 1, 111, 000 1, 211, 000 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 1, 132, 977 1, 155, 600 1, 111, 000 1, 211, 000 - (1, 132, 977) (1, 155, 600) Full Time Equivalent - (1, 111, 000) - (1, 211, 000) - Canadian Legal Information Institute (Can. LII) Salaries and Benefits - Operating Expenses - Program Expenses 1, 604, 871 Total Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) - 1, 815, 200 1, 715, 200 1, 604, 871 1, 637, 000 1, 815, 200 1, 715, 200 - 1, 637, 000 - (1, 604, 871) (1, 637, 000) Full Time Equivalent - (1, 815, 200) - (1, 715, 200) - - Library. Co Salaries and Benefits - Operating Expenses - Program Expenses 7, 900, 000 8, 058, 000 8, 152, 900 8, 019, 100 Total Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 7, 900, 000 8, 058, 000 8, 152, 900 8, 019, 100 - (7, 900, 000) (8, 058, 000) Full Time Equivalent 35 - (8, 152, 900) - (8, 019, 100) -

Operating Budget Details Support of Other Organizations 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Pro Bono Ontario | Ontario Justice Education Network (OJEN) | Law Commission of Ontario Salaries and Benefits - Operating Expenses - 242, 600 223, 300 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 237, 800 242, 600 223, 300 - (237, 800) (242, 600) Full Time Equivalent - (223, 300) - Federation of Ontario Law Associations (FOLA) - Operating Expenses 55, 238 56, 300 64, 000 Program Expenses 179, 896 183, 500 200, 300 Salaries and Benefits Total Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 235, 134 239, 800 264, 300 - (235, 134) (239, 800) Full Time Equivalent 36 - (264, 300) -

Professional Development & Competence 37

Overview Professional Development & Competence 2% 12% 2020 Budget PD&C Portion of LSO Expenses Professional Development and Competence focuses on the 20% competency and professional standards of the professions through $32. 3 million 23. 2% the licensing processes, provision of legal information and supports, competence resources and education programs, and post-licensing quality assurance programs. 13% Executive Director’s Office Practice Supports & Resources Practice Management • • • Responds to requests for guidance from over 8, 000 callers and supports over 130 practice management and professional responsibility resources including: Practice Management Guidelines, Practice Guides, checklists, articles, FAQs, and other tools Provides “just in time” guidance and information to enable licensees and others to make informed decisions through the Practice Management Helpline Licensing Process Certified Specialist • Manages the licensing processes - standardized, fair, transparent and defensible systems of assessment for entry-level lawyers and paralegals • Approximately 2, 400 new registered lawyer candidates and 1, 400 new registered paralegal candidates in the licensing process annually • Develops and delivers the Licensing Examinations and the Experiential Training Programs (Articling and the Law Practice Program/PPD) • Approximately 2, 200 lawyers and 1, 300 paralegals are licensed each year • Accredits and audits college paralegal programs • Provides professional credentialing through certifying specialization in designated practice areas Manages support services through Coach and Advisor Network using a mentorship model 38 [CATEGO RY NAME] [PERCEN TAGE] CPD 26% 9% 2020 Funding Of PD&C Expenses $31. 6 million 24. 2% 43% Annual Fees 27% Continuing Professional Development • Delivers educational programming for the legal professions on a wide variety of substantive and professionalism topics via live programs, and live and archived webcast • Coordinates the development and presentation of approximately 140 programs per year Other Non- AF Revenue 1%

Overview Professional Development & Competence 2% 12% 2020 Budget PD&C Portion of LSO Expenses Professional Development and Competence focuses on the 20% competency and professional standards of the professions through $32. 3 million 23. 2% the licensing processes, provision of legal information and supports, competence resources and education programs, and post-licensing quality assurance programs. 13% Practice Review Spot Audit • Conducts Spot Audits to assess a law firm’s compliance with the Law Society’s financial record keeping requirements • Conducts Practice Management Reviews to assess an individual lawyer’s practice management activities • Conducts Entry to Practice Reviews for those licensees returning to practice after 5 or more years Conducts Practice Audits of paralegal practices - a combined financial audit and practice management review 39 2020 Funding Of PD&C Expenses $31. 6 million 24. 2% 43% Annual Fees 27% Other Non- AF Revenue 1% Great Library Corporate Records & Archives Practice Audits • [CATEGO RY NAME] [PERCEN TAGE] CPD 26% 9% • Supports the research and information needs of the lawyer and paralegal professions through a significant print collection, and increasingly through electronic resources, and responds to over 20, 000 legal research and information requests each year • Administers Access. CLE, a full-text, searchable website • Shares information through its blog, Know How • Manages the Law Society’s large and complex document collection, including the organization’s official corporate records and artifacts of historical significance to Ontario’s legal professions

Operating Budget Summary Professional Development & Competence 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Professional Development & Competence Total Salaries and Benefits 15, 882, 600 16, 200, 100 16, 763, 900 17, 289, 800 Operating Expenses 954, 900 974, 000 1, 129, 800 1, 018, 900 Program Expenses 12, 568, 800 13, 242, 000 14, 700, 800 14, 026, 600 Total Expenses 29, 406, 300 30, 416, 100 32, 594, 500 32, 335, 300 -0. 8% Total Non-Annual Fee Revenues 22, 588, 600 23, 040, 400 22, 880, 500 23, 196, 300 1. 4% Excess of Revenues Over Expenses / (Expenses Over Revenues) (6, 817, 700) (7, 375, 700) Full Time Equivalent (9, 714, 000) (9, 139, 000) 158. 5 160. 5 Items of Note • The increase in salaries and benefits relates to the addition of two FTEs for the Practice Management Helpline enhancements approved by Convocation in 2018. • The difference in the 2020 salaries and benefits over projected actuals for 2019 is affected by staffing vacancies in the Licensing Process, Practice Management and Practice Review departments and the additional positions for the Practice Management Helpline. • The change in the program expenses is mainly due to savings identified by management and the elimination of $570, 000 budgeted in 2019 to support development of the family legal services provider licence with additional funding not needed in 2020. 40

Operating Budget Details Professional Development & Competence 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Executive Director’s Office | Practice Supports & Resources | Practice Management Salaries and Benefits 2, 236, 500 2, 281, 200 2, 425, 200 2, 612, 200 Operating Expenses 121, 800 124, 200 126, 900 Program Expenses 68, 300 69, 700 205, 100 267, 100 Total Expenses 2, 426, 600 2, 475, 100 2, 757, 200 3, 006, 200 Total Non-Annual Fee Revenues 27, 200 27, 700 Excess of Revenues Over Expenses / (Expenses Over Revenues) (2, 399, 400) (2, 447, 400) Full Time Equivalent - (2, 757, 200) (3, 006, 200) 17. 0 19. 0 3, 573, 800 3, 729, 500 Licensing Process | Certified Specialist Salaries and Benefits 3, 235, 700 3, 300, 400 Operating Expenses 152, 500 155, 600 175, 600 159, 900 Program Expenses 9, 155, 800 9, 650, 000 10, 304, 100 9, 989, 300 Total Expenses 12, 544, 000 13, 106, 000 14, 053, 500 13, 878, 700 Total Non-Annual Fee Revenues 14, 440, 400 14, 729, 200 14, 457, 500 14, 778, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) 1, 896, 400 1, 623, 200 404, 000 899, 300 Full Time Equivalent 40. 5 2, 388, 700 2, 436, 500 2, 500, 900 2, 533, 400 111, 000 113, 200 117, 600 109, 100 1, 550, 300 1, 581, 300 1, 779, 800 1, 664, 300 Continuing Professional Development Salaries and Benefits Operating Expenses Program Expenses Total Expenses 4, 050, 000 4, 131, 000 4, 398, 300 4, 306, 800 Total Non-Annual Fee Revenues 7, 921, 400 8, 079, 800 8, 251, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) 3, 871, 400 3, 948, 800 3, 852, 700 3, 944, 200 29. 0 Full Time Equivalent 41 29. 0

Operating Budget Details Professional Development & Competence 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget 5, 737, 200 5, 851, 900 5, 958, 700 6, 070, 700 469, 500 478, 900 571, 300 504, 300 38, 000 38, 800 6, 368, 800 6, 568, 800 6, 613, 800 2018 Actuals Practice Review | Spot Audit Salaries and Benefits Operating Expenses 37, 300 Program Expenses Total Expenses 6, 244, 000 Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 28, 200 28, 800 (6, 215, 800) (6, 340, 000) (6, 568, 800) (6, 613, 800) 48. 0 Full Time Equivalent - Practice Audits Salaries and Benefits 472, 200 481, 600 502, 000 546, 800 Operating Expenses 51, 600 52, 600 59, 900 2, 900 3, 000 23, 500 2, 700 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 526, 700 537, 200 585, 400 609, 400 - (526, 700) (537, 200) 1, 812, 300 1, 848, 500 Full Time Equivalent - (585, 400) - (609, 400) 4. 0 Great Library | Corporate Records & Archives Salaries and Benefits Operating Expenses Program Expenses Total Expenses 1, 803, 300 1, 797, 200 48, 500 49, 500 78, 500 58, 800 1, 754, 200 1, 900, 000 2, 349, 500 2, 064, 400 3, 615, 000 3, 798, 000 4, 231, 300 3, 920, 400 171, 400 Total Non-Annual Fee Revenues (3, 443, 600) Excess of Revenues Over Expenses / (Expenses Over Revenues) Full Time Equivalent 42 174, 800 172, 000 167, 300 (3, 623, 200) (4, 059, 300) (3, 753, 100) 20. 0

Professional Regulation & Tribunal 43

Overview 5% Professional Regulation & Tribunal 24% Professional Regulation responds to regulatory issues brought to the Law Society’s attention by resolving and investigating matters, and representing the Law Society in hearings before the Law Society Tribunal. Primary activities of Professional Regulation include complaints handling, investigations, discipline prosecutions, monitoring and enforcement of orders and undertakings, trusteeships, and client compensation. Executive Director’s Office Case Management • Oversees the case management system and the Integrated Regulatory Information System ("IRIS") • Monitors quality of case files • • Develops qualitative analysis and recommendations regarding file handling, issue management, work process and procedural improvements Develops reporting structures and the examination and evaluation of reporting requirements Annual Fees 94% 11% 2020 Budget PR&T Portion of LSO Expenses 13% 2020 Funding of PR&T Expenses 4% $44. 5 million 31. 9% $41. 1 million 31. 4% 4% 16% 23% Other Non -AF Revenue 2% Regulatory Compliance - By-Law Administration Services Complaints Intake & Resolution • Receives, logs, and acknowledges complaints related correspondence, assessing whether a written complaint is within Law Society jurisdiction • Resolves less serious allegations transferring serious allegations to Investigation Services • Complaints Resolution Commissioner conducts an impartial review of an investigation to close the file, often meeting with the complainant to discuss the matter 44 Investment Income 3% Investigation Services • Administers by-law driven processes, including annual reporting; enforces, suspension orders and revocations • Investigates serious allegations of licensee misconduct, incapacity and incompetence • Communicates practice restrictions, discipline histories and other regulatory information internally and to the public • Investigates issues relating to the good character of licensee applicants and the unauthorized practice by non-licensees • Resolves and closes file, refers the matter to the Proceedings Authorization Committee (PAC) or transfers file to Litigation Services

Overview 5% Professional Regulation & Tribunal 24% Professional Regulation responds to regulatory issues brought to the Law Society’s attention by resolving and investigating matters, and representing the Law Society in hearings before the Law Society Tribunal. Primary activities of Professional Regulation include complaints handling, investigations, discipline prosecutions, monitoring and enforcement of orders and undertakings, trusteeships, and client compensation. Litigation Services • Provides advice to investigators on investigation files • Prepares memoranda for the Proceedings Authorization Committee on recommendations for a hearing • Represents the Law Society before the Law Society Tribunal and before the courts 11% 2020 Budget PR&T Portion of LSO Expenses 13% 2020 Funding of PR&T Expenses 4% $44. 5 million 31. 9% $41. 1 million 31. 4% 4% 16% Trustee Services • Annual Fees 94% 23% Other Non -AF Revenue 2% Compensation Funds Ensures the protection of client funds, files and property, when a licensee is no longer able to continue operating his or her professional business due to death, incapacity, abandonment of practice or revocation • Obtains a court order appointing the Law Society as trustee of the practice • Provides information services to assist with a practice wind-up 45 • Processes claims by clients who have lost money as a result of the dishonesty of a licensee • The current maximum amounts payable to a claimant in respect of lawyer or paralegal dishonesty are $500, 000 and $10, 000, respectively Investment Income 3% Law Society Tribunal • Processes, hears and decides regulatory cases about Ontario lawyers and paralegals in a manner that is fair, just and in the public interest

Operating Budget Summary Professional Regulation & Tribunal 2019 Projected Actuals 2018 Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Professional Regulation & Tribunal Total Salaries and Benefits 24, 622, 600 25, 115, 100 28, 553, 900 28, 528, 900 Operating Expenses 1, 655, 400 1, 829, 175 2, 010, 500 Program Expenses 5, 986, 800 6, 886, 400 14, 579, 700 13, 869, 800 32, 264, 800 33, 830, 675 45, 144, 100 Total Expenses Total Non-Annual Fee Revenues 612, 400 Excess of Revenues Over Expenses / (Expenses Over Revenues) Full Time Equivalent (31, 652, 400) 44, 520, 600 -1. 4% 2, 415, 200 2, 305, 500 0. 0% (31, 415, 475) 2, 121, 900 (42, 838, 600) (42, 215, 100) 231. 5 229. 0 Items of Note • The variance between the 2020 salaries and benefits and the 2019 projected actuals is related to significant staffing vacancies. Active recruitment is in progress and the budget is maintained in anticipation of full staffing. These vacancies are primarily in the Investigation Services and Litigation Services departments. • The increase in operating expenses relates to anticipated costs for scanning and digitization of regulatory process files. • The change in program expenses is due to savings identified by management related to the Executive Director’s Office and in Tribunal. • The difference in the 2020 program expense budget over projected actuals for 2019 relates to favourable lawyer compensation fund routine grant experience compared to budget and the $5 million provision to replenish the fund balance. A three-year plan was initiated in 2018 to replenish the fund balance by including an annual $5 million provision above the amount for routine claims. The plan is on target to achieve its replenishment objective in 2020. 46

Operating Budget Details Professional Regulation & Tribunal 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget 2, 084, 200 3, 307, 200 2, 390, 500 Executive Director’s Office | Case Management Salaries and Benefits 2, 043, 300 Operating Expenses 157, 300 187, 400 310, 500 295, 500 Program Expenses 1, 850, 800 1, 887, 800 2, 680, 600 2, 312, 900 Total Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 4, 051, 400 4, 159, 400 6, 298, 300 4, 998, 900 - (4, 051, 400) (4, 159, 400) 5, 091, 500 5, 193, 300 Full Time Equivalent - (6, 298, 300) - (4, 998, 900) 23. 0 15. 5 Complaints Intake & Resolution Salaries and Benefits Operating Expenses 176, 200 Program Expenses 157, 100 4, 857, 500 5, 342, 700 215, 675 263, 400 269, 000 160, 200 239, 700 176, 600 Total Expenses 5, 424, 800 5, 569, 175 Total Non-Annual Fee Revenues 285, 600 Excess of Revenues Over Expenses / (Expenses Over Revenues) (5, 139, 200) (5, 277, 875) 1, 717, 500 1, 751, 900 1, 896, 300 1, 780, 700 117, 500 119, 900 167, 400 129, 900 21, 200 21, 600 50, 500 50, 000 Full Time Equivalent 5, 360, 600 5, 788, 300 291, 300 179, 900 (5, 180, 700) (5, 608, 400) 45. 0 48. 5 Regulatory Compliance | By-Law Administration Services Salaries and Benefits Operating Expenses Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 1, 856, 200 1, 893, 400 2, 114, 200 1, 960, 600 788, 400 804, 200 700, 000 (1, 067, 800) (1, 089, 200) Full Time Equivalent 47 (1, 414, 200) (1, 260, 600) 20. 0 19. 5

Operating Budget Details Professional Regulation & Tribunal 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget 7, 703, 500 7, 857, 600 8, 632, 900 8, 915, 600 725, 300 810, 000 678, 400 814, 400 388, 300 396, 100 296, 700 292, 700 8, 817, 100 9, 063, 700 9, 608, 000 2018 Actuals Investigation Services Salaries and Benefits Operating Expenses Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) - (8, 817, 100) (9, 063, 700) Salaries and Benefits 4, 901, 100 4, 999, 100 6, 393, 800 6, 538, 300 Operating Expenses 314, 600 320, 900 403, 600 418, 600 Program Expenses 187, 000 190, 700 139, 300 152, 900 Full Time Equivalent (9, 608, 000) 10, 022, 700 (10, 022, 700) 70. 5 72. 5 Litigation Services Total Expenses 5, 402, 700 5, 510, 700 6, 936, 700 7, 109, 800 Total Non-Annual Fee Revenues - Excess of Revenues Over Expenses / (Expenses Over Revenues) (5, 402, 700) (5, 510, 700) 1, 412, 500 1, 440, 800 1, 476, 300 Operating Expenses 57, 200 58, 300 54, 500 58, 500 Program Expenses 74, 300 100, 000 152, 600 118, 900 Full Time Equivalent - (6, 936, 700) - (7, 109, 800) 41. 0 Trustee Services Salaries and Benefits Total Expenses 1, 544, 000 1, 599, 100 1, 683, 400 1, 660, 800 3, 000 Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 1, 483, 400 3, 100 100, 600 (1, 541, 000) (1, 596, 000) Full Time Equivalent 48 (1, 582, 800) (1, 560, 200) 14. 0

Operating Budget Details Professional Regulation & Tribunal 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Compensation Funds Salaries and Benefits Operating Expenses Program Expenses Total Expenses 480, 900 490, 500 555, 500 616, 200 11, 200 19, 000 25, 700 29, 000 2, 812, 300 3, 500, 000 10, 137, 100 10, 073, 600 3, 304, 400 4, 009, 500 10, 718, 300 10, 718, 800 Total Non-Annual Fee Revenues (464, 600) Excess of Revenues Over Expenses / (Expenses Over Revenues) 1, 316, 600 (3, 769, 000) (2, 692, 900) Full Time Equivalent 1, 325, 000 1, 325, 000 (9, 393, 300) (9, 393, 800) 5. 0 1, 434, 400 1, 461, 500 Law Society Tribunal 1, 272, 300 1, 297, 700 Operating Expenses 96, 100 98, 000 Program Expenses 495, 800 Salaries and Benefits 107, 000 630, 000 883, 200 692, 200 Total Expenses 1, 864, 200 Total Non-Annual Fee Revenues - Excess of Revenues Over Expenses / (Expenses Over Revenues) (1, 864, 200) (2, 025, 700) Full Time Equivalent 49 2, 025, 700 2, 424, 600 2, 260, 700 - (2, 424, 600) - (2, 260, 700) 13. 0

Client & People Services 50

Overview Non- AF Revenue 24% 21% Client & People Services 2% Client & People Services division is a collection of business units, including Human Resources, Corporate Resource & Training Centre, Client Service Centre, Catering and Events that offer a diverse range of services to internal and external stakeholders. Executive Director’s Office Human Resources Corporate Resource & Training Centre • Partners strategically with business units to recruit, develop and retain a high performing and diverse workforce • Offers advice, consulting and support to enhance personal and organizational effectiveness • Develops organization-wide training on matters of operational improvement and ongoing talent management 2020 Budget C&PS Portion of LSO Expenses 5% 2020 Funding of C&PS Expenses 39% $10. 7 million 8. 2% $11. 5 million 8. 2% 32% Annual Fees 76% Catering - Events Client Service Centre • Receives over 160, 000 calls to Resource Centre, Complaints Reception and Main Reception lines and receives over 15, 000 e-mails to the Law Society inbox • Provides food services for internal and external meetings and events, manages the Osgoode Hall Restaurant, and assists in preparation of meals for the Toronto Lawyers Feed the Hungry Program • Updates licensee information and maintains most of the contact related database changes • Works closely with Facilities to manage internal and external room bookings and provides maintenance of the spaces • Produces licensee and staff Law Society photo ID cards, Certificates of Standing, Status Letters, and Adjusted Billings for licensees whose status have changed during the year • Connects people looking for legal assistance with a lawyer or paralegal who will provide a free consultation of up to 30 minutes to help determine rights and options 51

Overview Non- AF Revenue 24% 21% Client & People Services 2% Client & People Services division is a collection of business units, including Human Resources, Corporate Resource & Training Centre, Client Service Centre, Catering and Events that offer a diverse range of services to internal and external stakeholders. 5% A confidential service designed to help members to achieve their health and wellness goals • Lawyers, paralegals, licensing candidates, law students, judges, other legal professionals and their families can access the MAP $11. 5 million 8. 2% Parental Leave Assistance Plan (PLAP) • Financial assistance following the birth or adoption of a child – $750 per week for up to 12 weeks ($9, 000 max. per family) • For practising lawyers (women and men) in sole practice, or firms of up to five lawyers, who do not have access to other parental or adoption benefits • 39% 32% Member Assistance Plan (MAP) • 2020 Budget C&PS Portion of LSO Expenses Funded by and fully independent of the Law Society of Ontario and LAWPRO, Homewood Health provides services through coaching, counselling, peer support and resources 52 2020 Funding of C&PS Expenses $10. 7 million 8. 2% Annual Fees 76%

Operating Budget Summary Client & People Services 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Client & People Services Total Salaries and Benefits 7, 277, 200 7, 422, 700 7, 647, 100 7, 715, 800 Operating Expenses 319, 600 326, 000 500, 600 489, 300 Program Expenses 2, 908, 200 2, 966, 400 3, 233, 800 3, 247, 300 Total Expenses 10, 505, 000 10, 715, 100 11, 381, 500 11, 452, 400 0. 6% Total Non-Annual Fee Revenues 2, 490, 000 2, 539, 800 2, 572, 700 0. 0% Excess of Revenues Over Expenses / (Expenses Over Revenues) (8, 015, 000) (8, 175, 300) Full Time Equivalent (8, 800) (8, 879, 700) 82. 0 81. 0 Items of Note • The variance in 2020 salaries and benefits expense compared to 2019 projected actuals relates to staffing vacancies. 53

Operating Budget Details Client & People Services 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Executive Director’s Office | Human Resources | Corporate Resource & Training Centre Salaries and Benefits 2, 615, 900 2, 668, 200 2, 672, 200 2, 650, 200 Operating Expenses 150, 500 153, 500 243, 400 242, 100 1, 374, 600 1, 402, 100 1, 730, 000 1, 580, 500 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 4, 141, 000 4, 223, 800 4, 645, 600 4, 472, 800 - (4, 141, 000) (4, 223, 800) Full Time Equivalent - (4, 645, 600) - (4, 472, 800) 21. 0 20. 0 Client Service Centre Salaries and Benefits 3, 192, 500 3, 256, 400 3, 473, 000 3, 484, 100 Operating Expenses 118, 900 121, 300 205, 300 195, 300 21, 600 22, 000 53, 900 18, 900 Program Expenses Total Expenses 3, 333, 000 3, 399, 700 3, 732, 200 3, 698, 300 Total Non-Annual Fee Revenues 479, 900 489, 500 427, 700 Excess of Revenues Over Expenses / (Expenses Over Revenues) (2, 853, 100) (2, 910, 200) Salaries and Benefits 1, 468, 800 1, 498, 200 1, 501, 900 1, 581, 500 Operating Expenses 50, 200 51, 200 51, 900 Program Expenses 759, 200 774, 400 824, 700 822, 700 Full Time Equivalent (3, 304, 500) (3, 270, 600) 41. 0 Catering | Events Total Expenses 2, 278, 200 2, 323, 800 2, 378, 500 2, 456, 100 Total Non-Annual Fee Revenues 1, 741, 400 1, 776, 200 1, 910, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) (536, 800) (547, 600) Full Time Equivalent 54 (468, 500) (546, 100) 20. 0

Operating Budget Details Client & People Services 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Member Assistance Plan (MAP) Salaries and Benefits - - Operating Expenses - 597, 800 609, 800 525, 200 625, 200 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 597, 800 609, 800 525, 200 625, 200 268, 700 274, 100 235, 000 (329, 100) (335, 700) Full Time Equivalent (290, 200) (390, 200) - Parental Leave Assistance Plan (PLAP) Salaries and Benefits - Operating Expenses - 155, 000 158, 100, 000 200, 000 Program Expenses Total Non-Annual Fee Revenues Excess of Revenues Over Expenses / (Expenses Over Revenues) 155, 000 158, 100 100, 000 200, 000 - (155, 000) (158, 100) Full Time Equivalent 55 - (100, 000) - (200, 000) -

Administration 56

Overview 12% Administration 6% The Society’s administrative functions include executive oversight, financial administration, information systems, office of general counsel and facilities management. 27% 6% 2020 Budget Administration Portion of LSO Expenses 12% $28. 6 million 20. 5% 2020 Funding of Administration Expenses • Leads the operations of the Law Society • Provides advice and support to the Treasurer and benchers and operational oversight for projects and activities that bridge strategy, policy and large-scale implementation • The office includes the Corporate Secretary function with oversight and management of governance functions • Coordinates the contribution of benchers and management to Federation of Law Societies of Canada Finance • • • $26. 0 million 19. 9% 25% 12% Office of Chief Executive Officer Annual Fees 83% • Manages the Society’s enterprise risk management including risk identification, assessment and mitigation and compliance reporting • Provides Financial administration to the Law Society Foundation and Library. Co Inc. 57 Supports business applications and information and communications technology that enables the Law Society to operate efficiently and effectively Manages IT related projects and initiatives for the Law Society Investment Income 3% External Relations & Communications Information Technology Oversees the Society’s financial administration including its annual budget, financial policies and reporting, internal controls and support for the Audit and Finance Committee Late Fees 6% Non- AF Revenue 8% • Coordinates the Society’s communications, government and stakeholder relations functions • Provides strategic communications and engagement advice and services • Works closely with the Treasurer, benchers, management and operational areas to advance policy initiatives and strategic priorities by taking a leadership role in engagement and communications strategy development, media relations and issues management

Overview 6% 12% Administration 6% The Society’s administrative functions include executive oversight, financial administration, information systems, office of general counsel and facilities management. 27% 2020 Budget Administration Portion of LSO Expenses $28. 6 million 20. 5% • • Delivers integrated services to create and maintain adaptable and optimal spaces that are safe, sustainable and promote positive work environments Manages capital projects lifecycle renewal for the Law Society Provides oversight for all corporate litigation • Supports and co-instructs external counsel appointed by the Law Society’s insurers in respect of litigation that is insured • Manages an average of 30 corporate litigation files each year • Provides a variety of legal services to the organization, ranging from advice and opinions on emerging policy matters through to legal implications of implementation of programs and policies including employment law and other organization obligations 58 $26. 0 million 19. 9% Annual Fees 83% Office of General Counsel • 2020 Funding of Administration Expenses 25% 12% Facilities 12% Late Fees 6% Non- AF Revenue 8% Corporate • Includes expenses not aligned specifically with an operational department including insurance, audit fees, provision for bad debts, payment card processing fees and the central operations contingency. Investment Income 3%

Operating Budget Summary Administration 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget % Change Presented / Prior Year Approved Administration Total Salaries and Benefits 13, 644, 900 13, 917, 800 14, 501, 000 14, 813, 700 Operating Expenses 511, 500 521, 700 710, 600 697, 600 Program Expenses 12, 878, 700 13, 341, 500 14, 109, 700 13, 043, 500 Total Expenses 27, 035, 100 27, 781, 000 29, 321, 300 28, 554, 800 -2. 6% Total Non-Annual Fee Revenues 4, 791, 100 4, 886, 900 5, 085, 500 5, 157, 500 1. 4% Excess of Revenues Over Expenses / (Expenses Over Revenues) (22, 244, 000) (22, 894, 100) Full Time Equivalent (24, 235, 800) (23, 397, 300) 127. 5 125. 5 Items of Note • The increase in salaries and benefits when compared to the 2019 approved budget is attributable to market adjustments in the Security department offset by a reduction of two FTEs in the External Relations and Communications division. • The variance in the 2020 salaries and benefits in comparison to the 2019 projected actuals is due to staffing vacancies. • The change in the program expenses is due to savings identified by management and the removal of funding for the Awareness Campaign’s media buy of $600, 000 pending a decision by Convocation to continue. 59

Operating Budget Details Administration 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget Office of Chief Executive Officer Salaries and Benefits 1, 280, 000 1, 305, 600 1, 317, 300 1, 335, 600 Operating Expenses 76, 300 77, 800 78, 600 Program Expenses 355, 700 362, 800 295, 700 244, 500 Total Expenses 1, 712, 000 1, 746, 200 1, 691, 600 1, 658, 700 Total Non-Annual Fee Revenues - Excess of Revenues Over Expenses / (Expenses Over Revenues) (1, 712, 000) (1, 746, 200) Salaries and Benefits 2, 826, 100 2, 882, 600 2, 998, 500 3, 063, 200 Operating Expenses 91, 500 93, 300 161, 500 146, 500 Program Expenses 149, 200 152, 200 318, 500 288, 500 Full Time Equivalent - (1, 691, 600) - (1, 658, 700) 5. 0 Finance Total Expenses 3, 066, 800 3, 128, 100 3, 478, 500 3, 498, 200 Total Non-Annual Fee Revenues 552, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) (2, 514, 800) (2, 565, 100) Salaries and Benefits 4, 540, 500 4, 631, 300 4, 831, 200 4, 914, 100 Operating Expenses 108, 400 110, 600 126, 400 Program Expenses 1, 759, 700 2, 000 2, 200 2, 125, 200 Full Time Equivalent 563, 000 473, 000 (3, 005, 500) (3, 025, 200) 25. 0 Information Technology Total Expenses 6, 408, 600 6, 741, 900 7, 157, 800 7, 165, 700 Total Non-Annual Fee Revenues 12, 000 12, 200 12, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) (6, 396, 600) (6, 729, 700) Full Time Equivalent 60 (7, 145, 800) (7, 153, 700) 43. 0

Operating Budget Details Administration 2019 Projected Actuals 2018 Actuals 2019 Approved Budget 2020 Approved Budget External Relations & Communications Salaries and Benefits 1, 763, 500 1, 798, 800 1, 949, 000 1, 865, 600 Operating Expenses 100, 100 102, 100 180, 800 Program Expenses 1, 766, 300 1, 801, 600 2, 339, 100 1, 519, 100 3, 629, 900 3, 702, 500 4, 468, 900 3, 565, 500 Total Expenses Total Non-Annual Fee Revenues 60, 400 61, 600 120, 000 Excess of Revenues Over Expenses / (Expenses Over Revenues) (3, 569, 500) (3, 640, 900) Salaries and Benefits 1, 969, 500 2, 008, 900 2, 088, 400 2, 230, 300 Operating Expenses 57, 800 59, 000 77, 200 79, 200 4, 863, 600 5, 175, 700 5, 285, 700 Full Time Equivalent (4, 348, 900) (3, 445, 500) 18. 0 16. 0 Facilities 4, 768, 200 Program Expenses Total Expenses 6, 795, 500 Total Non-Annual Fee Revenues - Excess of Revenues Over Expenses / (Expenses Over Revenues) (6, 795, 500) (6, 931, 500) (7, 341, 300) (7, 595, 200) Full Time Equivalent 28. 0 6, 931, 500 7, 341, 300 7, 595, 200 Office of General Counsel Salaries and Benefits 1, 265, 300 1, 290, 600 1, 316, 600 Operating Expenses Program Expenses 1, 404, 900 77, 400 78, 900 86, 100 188, 600 192, 400 448, 400 248, 400 Total Expenses 1, 531, 300 1, 561, 900 1, 851, 100 1, 739, 400 Total Non-Annual Fee Revenues 250, 000 - (1, 281, 300) (1, 561, 900) Excess of Revenues Over Expenses / (Expenses Over Revenues) Full Time Equivalent 61 - (1, 851, 100) - (1, 739, 400) 8. 5

Operating Budget Details Administration 2018 Actuals 2019 Projected Actuals 2019 Approved Budget 2020 Approved Budget - - 3, 332, 100 Corporate Salaries and Benefits - - 3, 891, 000 3, 968, 900 Operating Expenses Program Expenses Total Expenses 3, 891, 000 3, 968, 900 3, 332, 100 Total Non-Annual Fee Revenues 3, 916, 700 3, 995, 000 4, 480, 500 4, 552, 500 Excess of Revenues Over Expenses / (Expenses Over Revenues) 25, 700 Full Time Equivalent 62 26, 100 1, 148, 400 - 1, 220, 400 -

6 Other Funds 63

Compensation Funds The Compensation Funds are restricted by the Law Society Act. Under the Act, the Funds’ revenues are to include licensee annual fees, recoveries and investment income from the investment of the accumulated fund balances. The Funds make grants to members of the public who are the victims of licensee dishonesty and misappropriation of client funds held in trust. Convocation has delegated responsibility for the approval of grants to the Compensation Fund Committee. Current guidelines for grants cap payments at $500, 000 for the lawyer fund and $10, 000 for the paralegal fund. The lawyer fund is governed by a Convocation approved fund balance management policy. The policy sets out minimum and maximum fund balance amounts to be maintained and prescribes the use of the accumulated fund balance and steps to be taken in the event the fund balance is below the policy minimum. Currently, the minimum balance to be maintained in the lawyer fund is approximately $20. 5 million. A key element of the fund balance management policy is the use of actuarial estimates to predict future claims activity and the appropriate size of the fund balance. This review is undertaken every three years with the next scheduled review in 2020. 64

Compensation Funds The Paralegal Fund, due to its relatively short existence, operational since 2008, is not governed by a fund management policy. However, its current balance of $800, 000 is two and one half times the total grants paid from the fund sinception. The fund is in a very strong position and would be able to absorb a major defalcation if one were to occur. Compensation Fund Summary Lawyers Paralegals Total Program expenses 104, 700 13, 300 118, 000 Provision for grants 4, 840, 000 115, 600 4, 955, 600 Fund balance replenishment 5, 000 - 5, 000 Toal program expenses 9, 944, 700 128, 900 10, 073, 600 Salaries and administration 572, 600 645, 200 Total expenses 10, 517, 300 201, 500 10, 718, 800 65

Capital Fund The Law Society maintains a Capital Fund for the purpose of providing funding for the replacement, upgrade and restoration of its physical assets and information technology systems. Annual fees, currently $91 per licensee, are reported in the Fund as revenue, and expenditures on approved projects are made from the Fund. The Society is undergoing an assessment of the useful life of its physical plant to develop a ten year plan for the upkeep and eventual replacement of relevant equipment. An assessment of the Society’s information technology needs will be undertaken to identify and prioritize systems in need of upgrade or replacement. On completion of these studies, a plan for capital expenditures will be brought forward to Convocation for consideration and approval. These studies will inform future capital expenditure plans. A comprehensive multi-year plan will be presented as part of the 2021 budget process. 66

County Libraries Fund The Society maintains the County Libraries Fund to collect fees from lawyers for the provision of legal information and the support of county library services across Ontario’s law libraries through its whollyowned not-for-profit subsidiary Library. Co. On an annual basis the Society approves a budget submission from Library. Co and levies lawyers their proportionate share based on the estimated number of full fee equivalent lawyers in the upcoming year. The revenue raised from the annual fee is reported as revenue of the Fund, and payments made to Library. Co are reported as an expense of the Fund. For 2020, the amount to be paid to Library. Co is $8, 019, 000. To the extent that levies raised exceed payments to Library. Co, the difference is maintained in the County Libraries Fund fund balance. This balance is available to mitigate future annual fees raised for the purpose of funding Library. Co. The balance in the Fund at the end of 2018 was $131, 000. 67

Errors and Omissions Insurance Fund The Society’s Errors and Omissions Insurance Fund (E&O Fund) is maintained for the purpose of reporting insurance related transactions between the Society, lawyers and LAWPRO administers the day to day operations of the E&O Fund under a management services agreement with the Society at no cost. The Fund’s surplus funds are managed by the Society’s investment manager under a Convocation approved investment policy. The Fund has no active claims outstanding and investment income surplus to the needs of the Fund is available for the use of the Society’s general operations. The 2020 budget proposes utilizing $1. 2 million of investment income from the E&O Fund to mitigate the 2020 lawyer annual fee. The Fund reports the Society’s investment in LAWPRO of $35. 6 million at cost. 68