Law Society of Ontario's Identification and ID Verification Rules

Law Society of Ontario distinguishes between "identification" and "ID verification".

So the first step is to determine if it is sufficient to do "identification" or whether "ID verification" is also required. 

Identification consists of obtaining certain information from the client without obtaining a piece of ID. ID Verification however is a more involved process where the lawyer is required to verify the identity of the client or the third party.

Generally speaking, ID Verification is required anytime the lawyer engages in or give instructions in respect of receiving, paying or transferring funds

Identification

Basic Identification

Identification refers to obtaining basic identification information about the client. If the client is representing an organization, identification also includes obtaining basic identification information about the organization. The law society requires a lawyer who completes an identification to obtain the following information:

1. The client’s full name.
2. The client’s business address and business telephone number, if applicable.
3. If the client is an individual, the client’s home address and home telephone number.
4. If the client is an organization, other than a financial institution, public body or reporting issuer, the organization’s incorporation or business identification number and the place of issue of its incorporation or business identification number, if applicable.
5. If the client is an individual, the client’s occupation or occupations.
6. If the client is an organization, other than a financial institution, public body or reporting issuer, the general nature of the type of business or businesses or activity or activities engaged in by the client, if applicable.
7. If the client is an organization, the name, position and contact information for each individual who is authorized to give instructions with respect to the matter for which the licensee is retained.
8. If the client is acting for or representing a third party, information about the third party as set out in paragraphs 1 to 7, as applicable.

See Section  23.  (1) of By-Law 7.1

Note that as part of "identification", the lawyer isn't required to obtain a piece of ID and only receives the above-referenced information.

Identification when lawyer involved in the transfer of funds

When the lawyer engages in or gives instructions in respect of the receiving, paying, or transferring of funds, the lawyer is required to also obtain information about the source of funds.

See Section  23.  (2) of By-Law 7.1

If the client is an organization and the lawyer engages in or gives instructions in respect of the receiving, paying or transferring of funds, the lawyer should 

1. obtain the name of each director of the organization, other than an organization that is a securities dealer; and
2. make reasonable efforts to obtain,
   1. the names and addresses of the persons who own, directly or indirectly, twenty-five percent or more of the organization or of the shares of the organization, if applicable,
   2. the names and addresses of all trustees and all known beneficiaries and settlors of the trust, if applicable, and
   3. information establishing the ownership, control and structure of the organization.

See Section  23.  (2.1) of By-Law 7.1

ID Verification

In contrast with "identification", "ID verification" is a more involved process as part of which the lawyer "verifies" the identity of the client or third party.

The Law Society of Ontario requires lawyers to complete ID verification every time they engage in or give instructions in respect of receiving, paying, or transferring funds. If the client is representing an organization, the lawyer should also verify the identity of each individual who is authorized to give instructions with respect to the matter for which the lawyer is retained.

See Section  23.  (4) of By-Law 7.1

Available Methods of ID Verification

Law Society of Ontario provides 5 permitted methods of ID Verification:

1. Government-issued photo identification method
   
   The lawyer must physically examine a government-issued photo ID, to ensure it's authentic and contains certain identifying information. See this Law Society of Ontario article.
   
   You can find a list of acceptable government-issued photo identification documents here: Government-issued photo identification documents acceptable to Law Society of Ontario.
   
   
2. Dual process method 
   
   The lawyer can rely on any two of the following pieces of information:
    
   1. Information from a reliable source that contains the individual’s name and address
   2. Information from a reliable source that contains the individual’s name and date of birth, and/or

   3. Information containing the individual’s name that confirms that they have a deposit account or credit card or other loan amount with a financial institution.

      See this Law Society of Ontario article.
      
      
3. Credit file method
   
   The lawyer must request and obtain the credit file of the client directly from a  Canadian credit bureau, confirm the credit file has been in existence for at least 3 years and verify that the identifying information matches.
   
   See this Law Society of Ontario article.
   
   
4. Virtual verification with authentication method (most popular)
   
   Virtual verification with authentication method is a variation of the first method (Government-issued photo identification method) with the primary difference being that the ID will not have to be inspected physically. See Law Society of Ontario's In-person vs. Virtual Verification of Identity
   
   This method is quickly gaining popularity among lawyers as it can be completed remotely using technology without having to physically meet with the client. 
   
   Law Society of Ontario requires lawyers who wish to verify the identity of an individual using video conferencing technology or other forms of virtual communication to authenticate the individual's government-issued photo identification document using technology that compares the features of the government-issued photo identification document against
   1. 1. known characteristics (e.g., size, texture, character spacing, raised lettering, format, design)
      2. security features (e.g., holograms, barcodes, magnetic strips, watermarks, embedded electronic chips), or
      3. markers (e.g., logos, symbols)
   
   See this Law Society of Ontario article.
   
   Learn more about how you can use Nojumi to complete virtual ID verification and authentication of government-issued photo identification documents.
   
   
5. Using an agent method
   
   The lawyer enters into a written agreement with an agent to complete the ID verification on behalf of the lawyer. The by-law doesn't specify who can act as an agent but the Law Society requires the lawyer to ensure the agent is independent and reputable, can be relied upon to understand what is required, and is capable of performing the steps to verify identity. 
   
   See this Law Society of Ontario article.