1. In the context of a sophisticated client, sophisticated can best be defined as

• In the context of a sophisticated client, "sophisticated" can best be defined as
• complicated, self-reliant, and cosmopolitan.
• refined and cultured.
• simple and naïve.
• confident, knowledgeable, and up to date.
• aggressive, dynamic, and forceful.
• Which of the following best describes the likelihood of a student becoming involved in a

situation necessitating legal advice?

• A student, or someone close to a student, sometimes becomes involved in such a situation.
• A student, or someone close to the student, will always become involved in such a situation.
• Because students are not business people, they never become involved in such situations.
• Because students cannot be sophisticated, they will often become involved in such situations.
• Legal advice is not available to students.
• Raman is a sophisticated client. This means that she
• understands how to manage a lawyer-client relationship.
• has a law degree.
• is a small business owner.
• manages her legal affairs without assistance from a lawyer.
• will probably never find herself in a situation necessitating legal advice.
• Which of the following is not a good reason for a businessperson to seek advice from a lawyer?
• The businessperson cannot find the necessary legal information.
• The businessperson cannot understand the necessary legal information.
• The necessary legal information is available online.
• It would take too long for the businessperson to find the necessary legal information.
• The businessperson is facing criminal charges.
• For sophisticated clients, the availability of an abundance of legal information online is
• a negative development, because online information is rarely accurate or helpful.
• a positive development, because it means that they will no longer need to retain lawyers as part of

their team.

• a negative development, because accessing this information tends to be more costly than retaining a

lawyer.

• a positive development, because it provides greater access to information they can use as part of

their decision-making process.

• a neutral development, because lawyers are still the only ones able to access this information.
• When searching online for legal information, it is best to
• trust that if it is published online, it must be accurate.
• never trust the information found on a website.
• use American sources, as they tend to be more comprehensive than Canadian ones.
• gauge the accuracy of the information by the look of the website.
• seek input from a lawyer when answers cannot be readily found.
• Sophisticated clients
• do not need to retain a lawyer.
• know that it is better to hire a lawyer than to conduct research on one's own.
• are willing to pay for legal advice at any cost.
• tend to be embarrassed to request legal advice.
• have the skill and confidence to find basic legal information.Ch 1. Managing Your Legal Affairs

Business Law in Canada 13/CE Richard Yates

• The primary purpose of an initial consultation with a lawyer is
• to arrange payment of the lawyer's fees up front.
• to develop strategies for dealing with the legal situation in question.
• for the prospective client to decide whether to retain the lawyer.
• for the prospective lawyer to help mediate the current dispute.
• to discuss the availability of Legal Aid.
• The decision to enter the lawyer-client relationship should be
• made quickly to ensure that no one else can retain your lawyer.
• solely up to the lawyer, as he or she is the one with the legal training.
• made primarily on the basis of cost.
• a mutual decision made primarily on the basis of trust.
• solely up the client, as the client is the one paying for the services.

10.When someone refers you to a particular lawyer, you should

• retain the lawyer regardless of who gave you the referral.
• gauge the referral on the basis of the level of trust you have for the person making the referral.
• retain the lawyer regardless of their area of practice.
• ensure the referral is from a family member rather than a mere friend.
• ignore the referral as irrelevant.

11.A lawyer referral service

• will enable a businessperson to retain a lawyer without need for an initial consultation.
• is an online fee-based service providing results.
• regulates the legal profession in the interest of the public.
• provides the names and phone numbers of lawyers who practice in a particular area of law.
• is also known as "Legal Aid".

12.A provincial law society

• is a self-governing body for lawyers.
• has as its mandate the provision of free legal services in the public interest.
• operates primarily to offer low-cost legal advice to members.
• operates primarily to enhance the commercial interests of its members.
• is a self-governing body for businesspeople seeking legal advice.

13.Becoming a sophisticated client will

• ensure that a business person never needs a lawyer.
• help a business person manage her legal affairs more efficiently and effectively.
• result in a business person developing a bias against lawyers.
• relieve a business person from having to conduct legal research.
• protect a business person from needing legal advice.

14.The Canadian Bar Association is

• the national society for legal aid services.
• a professional organization that represents judges and lawyers.
• focused on enhancing public safety in the liquor distribution industry.
• an organization responsible for reviewing lawyers' accounts.
• a disciplinary body for members of the legal profession.

15.When setting up a small business, the best approach to follow is to assume that after the business has been set up and commences operating,Ch 1. Managing Your Legal Affairs

• the lawyer you chose to assist you in the start-up of the business will continue to represent you.
• the lawyer you chose to assist you in the start-up of the business will refer you to a different lawyer.
• a lawyer will no longer be required.
• you will not need legal advice, as long as you are a sophisticated client.
• the lawyer you chose to assist you in the start-up of the business will provide free legal services for

the duration of the business's operation.

16.Which of the following is not an advantage to maintaining an ongoing relationship with your lawyer?

• The lawyer will know and understand you and your business.
• The lawyer will be able to provide legal advice more efficiently, thereby reducing your legal costs.
• The lawyer will be able to customize legal advice so it will be even more useful to you.
• The lawyer will automatically track your business activities so that he or she can provide constant

advice and guidance.

• The lawyer will be motivated to do even more for the client.

17.Legal fees

• are always calculated in a single, specified way.
• should not be discussed with a lawyer until a bill has been prepared.
• are typically negligible.
• should be discussed during the initial consultation with the lawyer.
• are rarely the subject of confusion or misunderstanding.

18.Which of the following statements is correct?

• It is a popular misconception that legal services can be very costly.
• Some people don't retain lawyers even when they need them because they are afraid of the cost.
• All legal matters are billed to clients on an hourly basis.
• It is considered unprofessional to raise the issue of fees during a consultation with a lawyer.
• Lawyers should always be retained, regardless of the cost.

19.Contingency fee agreements

• are typically used for real estate purchases, the drafting of wills, and incorporations.
• are not subject to any restrictions.
• are synonymous with retainer agreements.
• may result in a lawyer not receiving any legal fees for the work done on a file.
• must be prepared for all lawyer-client relationships.

20.Which of the following statements regarding provincial law societies is false?

• Provincial law societies may restrict the use of contingency fee agreements.
• Provincial law societies may set maximum contingency fees for certain types of cases.
• Provincial law societies may offer a fee mediation service.
• Provincial law societies provide online information on lawyers' fees.
• Provincial law societies provide free legal services to people in need.

21.Typically, lawyers bill their fees on the basis of which of the following?

• A fixed fee, an hourly rate, or a contingency fee
• A fixed fee, a pro rata distribution, or a contingency fee
• A stipend, a pro rate distribution, or an hourly rate
• A stipend, an hourly rate, or a contingency fee
• A fixed fee, a stipend, or a pro rata distributionCh 1. Managing Your Legal Affairs

22.Which of the following statements regarding retainers is false?

• Before commencing work on a matter for a new client, a lawyer usually requests that a retainer be

paid.

• Provincial law societies typically restrict the use of retainers to personal injury or product liability

cases.

• A retainer is deposited into a trust account to the credit of the client.
• The lawyer may require the client to "top up" the retainer as funds are withdrawn from the trust

account to pay legal bills.

• A retainer helps ensure that lawyers will be paid for their legal services.

23.A retainer

• works to secure the release of an arrested person.
• refers to the costs incurred by a lawyer on a client's behalf.
• is the amount a lawyer will receive when charging based on a contingency fee agreement.
• works as a deposit.
• is the amount a client must pay that is in addition to regular legal fees and disbursements.

24.Having a good lawyer on your team is

• usually too expensive to be worthwhile.
• only necessary for large companies.
• a good alternative to becoming a sophisticated client.
• a legal requirement prior to incorporating a business.
• a critical component of being a sophisticated client.

25.Legal aid is

• universally available, regardless of subject matter or financial need.
• available to anyone who can demonstrate financial need, regardless of subject matter.
• available exclusively for criminal law issues, subject to demonst financial need.
• only available for business law issues.
• available subject to substantive and financial eligibility requirements.

26.Which of the following statements is most accurate?

• If you have a legal problem and cannot afford a lawyer, you may be eligible for legal aid.
• If you have a legal problem and cannot afford a lawyer, one will be provided for you.
• If you qualify for legal aid, you will automatically be exempt from all legal costs.
• Everyone qualifies for legal aid.
• Everyone can afford a lawyer.

27.If you collect money as a result of a settlement or judgment obtained through the assistance of legal aid, you will

• probably have to repay some or all of the legal aid benefits you received.
• probably be ineligible to enforce the settlement or judgment if the debtor refuses to pay.
• probably be able to keep the full amount of the settlement of judgment.
• be required to turn the amount of the settlement or judgment over to legal aid.
• be required to turn the amount of the settlement or judgment over to the court.

28.A small business owner

• is wise to obtain legal aid for business matters rather than having to incur legal costs.
• is automatically entitled to legal aid assistance.
• is usually not able to receive legal aid with respect to the type of legal issues involving the business.
• should always use duty counsel rather than having to retain a lawyer.
• should retain duty counsel to draft contracts outlining legal duties.Ch 1. Managing Your Legal Affairs