What Your Law Firm Needs to Know About PIPEDA Compliance

What is PIPEDA?

PIPEDA is a federal law and applies only to the private sector. It sets out the ground rules for how businesses must collect, use, and disclose personal information during commercial activities. The emphasis on “commercial activities” is key because if there’s no commercial activity, PIPEDA generally doesn’t apply.

PIPEDA’s primary role is to protect individuals’ privacy. It gives individuals the right to access, correct, and control their personal data—and to file complaints if they believe their privacy rights have been violated. PIPEDA also sets out 10 fair information principles that businesses must follow, including accountability, consent, limiting collection, accuracy, and openness. 

When does PIPEDA apply to law firms?

PIPEDA applies to private-sector organizations that collect, use, or disclose personal information in the course of commercial activities. Since most legal services are provided for a fee, law firms typically fall within this scope.

This means that any firm offering legal services commercially—no matter how large or small—must comply with PIPEDA’s privacy requirements.

Provincial exceptions to PIPEDA

While PIPEDA applies throughout Canada, it doesn’t apply in the following three provinces, which have their own privacy laws that are considered “substantially similar” to PIPEDA:

• British Columbia: Personal Information Protection Act (PIPA)
• Alberta: Personal Information Protection Act (PIPA)
• Quebec: Act respecting the protection of personal information in the private sector

These acts govern how organizations within those provinces collect, use, and disclose personal information during commercial activities. For intra-provincial matters, businesses typically follow their respective provincial privacy legislation instead of PIPEDA. However, PIPEDA may still apply to cross-border or interprovincial transactions, or where federal oversight is involved.

But what if law firms operate across several provinces? These firms may need to comply with multiple privacy laws at once. A firm with offices in both Alberta and Ontario will generally follow Alberta’s PIPA for activities conducted within Alberta, and PIPEDA for activities conducted in Ontario. However, PIPEDA may still apply in Alberta in situations involving interprovincial or international personal information transfers.

Additionally, PIPEDA continues to apply to federally regulated activities—such as banking, transportation, and telecommunications—regardless of provincial privacy laws. This ensures a consistent standard for privacy protection across industries that operate nationwide.

Based on this framework, law firms should pay close attention to both federal and applicable provincial privacy laws, depending on where and how they conduct business.

What practice areas are most affected by PIPEDA?

All law firms need to be aware of their obligations under PIPEDA. However, certain practice areas are more likely than others to encounter privacy issues. These include:

• Family law: Deals with highly sensitive family information.
• Immigration law: Involves biometrics, identification documents, and residency details.
• Employment law: Manages employee records and HR data.
• Real estate and wills: Require collection of financial details, identity information, and next-of-kin data.

Lawyers working in these fields frequently collect, store, transmit, and disclose sensitive personal information. For example, family law firms gather client data to conduct conflict checks before engagement, which requires obtaining explicit consent. Similarly, immigration law firms deal with immigration status, family history, and financial records—making PIPEDA compliance especially important in those contexts. 

Ethical and legal overlap: PIPEDA vs. confidentiality

While lawyers may not be fully versed in the specifics of privacy law, many of its core principles reflect the longstanding ethical duties that law societies impose. Both PIPEDA and professional codes of conduct aim to protect client interests and uphold high professional standards. However, they differ in scope. Ethical duties cover a broad range of professional responsibilities, including honesty, integrity, and confidentiality. PIPEDA, by contrast, is strictly concerned with the protection of personal information during commercial activities. 

While PIPEDA’s scope is narrower—focusing on data handling—it often overlaps with ethical duties related to confidentiality. For example, both frameworks require safeguarding client information and limiting access to it. However, lawyers must comply with both frameworks, and the two don’t always line up perfectly.

Does PIPEDA compliance guarantee ethical compliance? Not necessarily, though the two often overlap. 

For instance, PIPEDA may require that personal information be destroyed after it’s no longer needed for the purpose it was collected. But ethical obligations—such as maintaining records in case of future disputes or claims—may call for that same information to be retained for a longer period of time.

Ultimately, lawyers must be vigilant in navigating both their legal privacy obligations under PIPEDA and their professional ethical duties, ensuring that neither is overlooked.

PIPEDA law firm compliance tips

So, how can you put all this information into practice? If you’re a lawyer looking to comply with PIPEDA, here are some key tips:

1. Appoint a privacy officer

Designate someone in your firm to oversee compliance—this person should develop policies, train staff, and respond to client inquiries about how personal information is handled.

2. Get informed consent

Before collecting any personal data, clearly explain what you’re collecting, why it’s needed, and how you intend to use it. This ensures you’re receiving meaningful, informed consent—a core requirement under PIPEDA.

3. Collect only what you need

Limit the personal information you collect to what is strictly necessary for providing legal services.

4. Protect client data

Use appropriate safeguards to secure both physical and digital data. This includes encryption, password protection, and locked file cabinets. 

5. Be transparent and responsive

Maintain a clear, accessible privacy policy outlining how client data is handled. Be ready to respond to requests for access, correction, or information about your data practices in a timely manner.

6. Consider your software

The tools you use matter. Practice management software like Clio provides secure data handling and is PIPEDA-compliant.

How legaltech can help with PIPEDA compliance

Complying with PIPEDA might seem daunting, but the right legaltech tools can make it much easier. Practice management software with built-in privacy safeguards helps law firms meet their obligations. When considering your legaltech options, look out for these features:

• Audit trails: Systems that track and record all transactions and activities within your firm.
• Secure document sharing: Ensures that only the intended recipients can view, download, or modify documents. 
• Access controls: Allow you to manage who can view or use sensitive information. 

Clio supports Canadian law firms with a secure, PIPEDA-compliant platform. From encryption and two-factor authentication to audit trails and access controls, Clio is designed to protect your clients’ information every step of the way. 

Your clients’ personal information is in your hands

In the legal profession, trust is everything. When clients hand over their personal information, they expect discretion, professionalism, and legal compliance. But if you’re not keeping up with Canada’s evolving privacy laws, that trust—and your firm’s reputation—could be at risk. 

Data protection isn’t just a legal requirement; it’s an ethical one too. Whether you work at a law firm, in a corporate legal department, or as a sole practitioner, now’s the time to review your internal practices and take proactive steps toward compliance. By investing in the right tools and processes today, you can avoid serious consequences tomorrow.