Wednesday, November 13, 2013

"Hey stupid, did you maximize your billables today?"

It’s the Culture, Stupid! Why lawyers aren’t offering unbundled legal services
November 8, 2013 by drjuliemacfarlane

Interviews with 253 SRL’s (Self Represented Litigants) in my recent study (http://www.representing-yourself.com/PDF/reportM15.pdf) expose the reality that despite a decade of provincial Law Societies drafting new rules of professional conduct on limited scope retainers (LSR’s) or unbundled legal services – when lawyers provide services on an hourly basis for specific contracted tasks – lawyers who regularly offer their clients LSR’s are still about as rare as a shooting star on a cloudy night.

The 53% of SRLs in my study who started with counsel but ran out of money to pay the bills – as well as those who could never afford a retainer in the first place – were totally baffled by this. In interview after interview, SRLs described going systematically through the Yellow Pages and calling a dozen or more law offices asking: “Will you assist me with my case by (e.g.) reviewing my documents/appearing with me at a hearing/other task, and bill me only for the hours we agree that you spend on this assignment?” To their amazement, almost no lawyer said “yes.”

A total of just 13 SRLs reported receiving unbundled services. Virtually all sought and /or desired this.

What is the problem here? Supply should meet demand, right? Why do most lawyers not offer – and often do not see why they should consider offering – legal services this way?

Response Number 1

The public – aka the ubiquitous “non-lawyers” – do not understand that this is so much more difficult than they can possibly appreciate.

Certainly unbundling is different than a traditional lawyer-in-charge (cf The New Lawyer) approach and requires adaptation to change. The profession needs to figure out how to set and manage reasonable client expectations in a LSR.

Surely we can be smart enough to figure out how to offer what the public is asking for, and to protect ourselves to boot? And why would we imagine that today’s consumers would be satisfied with the answer “This really isn’t good for you – we know better?”

Response Number 2

Lawyers who have plenty of clients who are willing to retain them in the traditional paradigm have no incentive to use LSR’s.

Ok, so this is a bigger problem. There is little or no incentive to offer unbundled legal services if you have plenty of clients willing to retain you in a full-on, lawyer-in-charge, traditional retainer model.

However, the writing is on the wall. Without adjusting how legal services are billed, we now know that fewer and fewer personal clients will use lawyers (more than half the litigants in most family courts, for example).

And that corporations are voting with their feet, judging by the precipitous rise in in-house counsel and growing demands for alternative billing structures (a quick glance through the last 12 months of American Bar Association Magazine articles provides a rich data source for this debate)?

Moreover – is it naïve of me to suggest that the public reputation and legitimacy of the profession is adversely affected if it only represents (literally) a tiny fraction of the population, primarily corporations?

Response Number 3

If a “mistake” is made or the client is dissatisfied as a result of a LSR, they will bring a formal complaint or even sue for malpractice.

There is no empirical evidence that LSR’s generate more client complaints than traditional retainer agreements. None of the provincial Law Societies presently break down their complaints data on this basis.

My instinct is that the very small number of LSR’s produce relatively fewer dissatisfied customers than traditional retainer agreements (no shortage of complaints there). It is a matter of working at properly explaining and managing expectations.

The respondents in my study who received unbundled services were grateful and relieved to do so. The rest – who did not find a lawyer who would offer a LSR – were despondent, baffled and dissatisfied.

And a reality check: lawyers never know “everything” about a case. We need to get over our fetish with knowing “everything” about a case before being able to advise, negotiate, etc., etc. Clients often don’t tell us. The complexity of law – especially the way that law has developed in the last 20 years – means that at best a competent lawyer is giving their client an “educated guess,” even where they are providing “full scope” services. Instead of focusing on the dangers of advising a client based on limited information, we need to be realistic about just how rarely a lawyer can ever give their client a completely reliable opinion.

A LSR should and can focus on what the lawyer needs to know in order to do what they are being contracted to do.

Response Number 4

The commitment of the profession to high quality work is compromised by taking on work on a piecemeal basis.

The work that a lawyer can do when she is retained on a LSR is different from the work she would do on a traditional retainer. It is limited in scope – that’s the point. We should begin with an assumption that our clients are intelligent enough to understand that their counsel can only deliver what they have contracted to do. It is insulting to tell the public that they cannot have what they want because they cannot possibly understand it (above).

It must be possible to come to a reasonable accommodation of the reality of limited scope services between lawyer and client. If a lawyer cannot negotiate this with her client, why should her client trust her to negotiate with the other side?

Not every case is suited to a LSR, and there are some obvious warning signs; for example if the client appears to have serious mental health issues, or if there is an especially large volume of litigation material amassed to date. However the principles that safeguard against these risks – clarity, talking it through and not just relying on paperwork, noting and addressing the warning signs of diminished lack of client understanding, continuing to be transparent about actual costs – are the same that any lawyer faces with any client.

There is enormous potential in the concept of unbundling (and hats off to Forest Mosten, the “grandfather” of unbundling, who was laughed out of town when he first proposed this idea 25 years ago). Let’s get serious about realizing it.

The culture of legal practice is simply not a good enough reason for resistance to LSR’s. If the public is to access the legal services they say they want and recognize that they need, they require an affordable proposition from the legal profession.

This means not just permitting, but promoting – via education, open debate and the development of best practices – the use of limited service retainers. Perhaps most important of all, this would show that the profession is listening to the public.
Julie Macfarlane, B.A., LL.M. (London), Ph.D. (C.N.N.A.) 

Professor Macfarlane teaches Lawyer as Conflict Resolver. She has published widely in the area of conflict resolution and mediation. Her new forthcoming book is "Islamic Divorce in North America: A Shari'a Path in a Secular Society" (Oxford University Press April 2012). She is also the author of the bestselling "The New Lawyer: How Settlement is Transforming the Practice of Law" (University of British Colombia Press 2008). Her textbook "Dispute Resolution: Readings and Case Studies" is now in its 3rd edition (Emond Montgomery 2010). Professor Macfarlane is also an active mediator and dispute resolution consultant to a wide range of organizations and government agencies.

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