What are unbundled legal services?

Unbundled or “pay as you go” legal services are when a firm and its client agree that some tasks traditionally undertaken by the solicitor, such as drafting letters or attending court hearings, will be completed by the client themselves. 

The offering of unbundled services has been under discussion for a number of years and in 2021, the SRA announced a pilot within family law. In September 2022, a report of initial findings was made by the SRA and a recording of their webinar discussing the potential issues, benefits and drawbacks of working in this way is available here. A report with more detailed findings is expected to be released soon.

What are the risks involved in offering unbundled legal services?

An important risk to consider is that firms could inadvertently assume the responsibilities and liabilities of a full retainer whilst generating a reduced fee. This could arise in various ways including: 

• failure of a client to comply with its responsibilities, either through inability or a lack of understanding of the expectation;
• reliance on data provided by a client, which ultimately proves to be inaccurate or incomplete and affects the advice given;
• misunderstandings about the scope of service that a firm has agreed to perform or conversely, scope creep, where the actions of a firm extends the remit of a limited retainer;
• challenges or complaints from clients if the desired outcome is not achieved, irrespective of the agreed remit;
• changes to established case law. 

The risk landscape around this topic is likely to evolve, especially if insurance claims increase because of more frequent use of unbundled services.

What to consider if my firm is thinking about offering unbundled legal services?

A “one size fits all” agreement about what work can and can’t be unbundled may be impractical given the different capabilities and requirements that clients could have. Consequently, firms should establish what they are proposing and how it will work within their firm, including an explanation of the following. 

• Will unbundled services only be offered at the instigation of clients, or will the concept be explained more widely?
• If the work is suitable for an unbundled arrangement, how will the firm assess the client’s capability to conduct agreed tasks?
• Who will make that assessment and how will it be recorded?
• What will happen if the firm feels that an unbundled arrangement is unsuitable for that individual client?
• How will the firm ensure that clients understand their responsibilities?
• How will the firm collect and record information received from the client?
• The Law Society makes clear that “One professional negligence risk for provision of unbundled services comes from advising the client on the basis of inadequate information. You should keep a written record of information provided by the client and the advice you give should be provided in writing subject to the disclaimer that it is based on the client's information and that you cannot be liable for incorrect advice if the client has not provided all the relevant information.”
• How will the firm monitor the matter to ensure that unbundled services remain suitable?
• What action will be taken if the firm starts to have concerns over the suitability/capability of the client as matters progress?

What can my firm do to help mitigate these risks?

A firm’s records and retainer will be key documents if a claim arises so make sure that the information supplied by the client is carefully recorded and that the retainer clearly lists tasks that the firm will carry out, as well as those falling outside of the scope of service. It’s also important to review the retainer on a regular basis and issue a new one where appropriate, ensuring that any changes to your instructions are also fully reflected on your file. 

Even with the benefit of a clear retainer, there is case law that highlights risks associated when acting in a limited capacity or with a limited retainer. More details can be found on The Law Society website: 

• Padden v Bevan Ashford Solicitors [2011] EWCA Civ 1616; 
• Minkin v Landsberg [2015] EWCA Civ 1152 
• Sequence Properties Limited v Kunal Balwantbhal Patel [2016] EWHC 1434 

Solicitors have both a duty of care and regulatory obligations irrespective of limitations within their retainers. These will need to be carefully managed if a firm chooses to pursue unbundled services. 

If you would like to discuss any points covered in this article, or anything connected to your PII policy, please get in touch.