Unbundling legal services...the pros and the cons

The SRA has made no secret of its support for ‘innovative’ approaches to the delivery of legal services, recently promoting unbundled legal services.

Chief Executive Paul Philip states that survey results ‘suggest that unbundling has the potential to make some legal services more affordable for those on low incomes, while law firms could benefit too as it would increase their client base’.

What are unbundled legal services?

It’s a limited retainer to deal with specific aspects of a case, specifying which key tasks (e.g. letter writing, drafting, or Court attendance) the Solicitor will deal with, and those which are the client’s responsibility. The Law Society (TLS) claims that unbundling can be effective in, for example, family law, housing and immigration.

What are the advantages of unbundled legal services?

This is a contentious issue. TLS claims that unbundling can improve access to legal services as those on low incomes may be able to afford a limited retainer, whereas fees for a full retainer may be prohibitive. This may also benefit firms by growing their client base and improving financial performance.

What are the risks involved in providing unbundled legal services?

Any firm considering unbundling should read the Law Society’s 2022 Practice Note Unbundling civil legal services  which highlights the risks, including:

• Failing to explain the scope of the retainer and the limitations of the services offered
• Unwittingly creating a full retainer with the consequent liabilities
• Client complaints if objectives aren’t achieved, regardless of retainer limitations
• Non-compliance with the terms of the firm’s PI insurance
• Claims of negligence or personal misconduct due to insufficient knowledge of the full circumstances of the case, a lack of duty of care to the client or third parties, or duties to the Court

For evidence of what can go wrong with a limited retainer, see:

1. Padden -v- Bevan Ashford [2013] EWCA Civ 824.
2. Minkin -v- Lesley Landberg [2015] EWCA Civ 1152.
3. Sequence Properties Limited v Kunal Balwantbhal Patel [2016] EWHC 1434 

Sequence appears to suggest that a solicitor may be under a duty to advise the client of procedural requirements which fall beyond the discreet acts of legal assistance required by the client. This is plainly unwelcome and likely to be a strong negative in the SRA’s efforts to promote this approach.

How can a law firm mitigate the risks of unbundling?

There are a number of steps you can take to mitigate the risks, including:

• Obtain your PI insurer’s approval
• The first client meeting should be face-to-face (in person or via video link). If you have concerns about the client’s ability to understand or follow your advice, consider whether unbundling is in their best interests, and decline to act if appropriate
• Check for any conflict of interest
• Explain to the client (in person and in writing) what your retainer includes, and what is not included. Be sure they understand what you will do and what they need to do themselves, and that your advice is based on the information they provide
• Keep a record of information the client has provided, their objectives in the case, and advice you have given. Give your advice in writing and be clear that it is based on the client providing complete and accurate information
• Do not allow mission creep
• Inform the client of the firm’s complaints procedure and their right to apply to LeO
• Provide a clear estimate of costs for your work and of likely third-party costs
• Record key dates on the case
• Be sure that you understand the risks demonstrated in the cases above

So, if you are considering introducing unbundled services, ensure that your client care/retainer letter covers all essential points and that you keep detailed records. If you need help, please get in touch.