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‘Yes, we can do it for that price; ‘What would you like me to leave out?’

“I am sick and tired of asking my external law firms for a garden shed and getting a bloody office tower and a bill to match!”

So opined [verbatim] a very frustrated FTSE 100 GC in a casual conversation with us recently.

Why this profound dissonance between expectation and reality? Why do lawyers keep delivering stuff the clients didn’t ask for, don’t want and won’t pay for? Is it fair to characterise this behaviour as professional arrogance (‘…we know better than you’) and/or unprincipled and ill-considered up selling?

Two understandable explanations…

No, for the most part there are two other understandable but equally culpable forces at play. The first is lawyer’s sense of professionalism. We want to do a great job, we want to have the latitude to be able to bring all our skill, knowledge and experience to bear in pursuit of the clients’ interests. We do not see ourselves as corner cutting amateurs, and if the job is worth doing then it’s worth doing not just properly, but to the very best of our ability.

The second imperative is a well-founded and entirely justifiable belief that if we do not bring a ‘I-must-leave-no-stone-unturned’ approach to a piece of work, then we expose the client to risk and loss, and by proxy expose the firm and ourselves to allegations of professional negligence with resulting liability.

The convergence of these two imperatives drives most lawyers inexorably to deliver the jewel-encrusted, gold-plated version of the job very time with scant regard to what the client has asked for, what they need or what they are willing to pay for.

To be fair, lawyers do have a duty not to blindly respond to client instructions if they think that they are deficient or mistaken or ill informed. But nor should that be an excuse or justification for disregarding entirely what the client is asking for or their apparent budget.

But breaking the job up…?

The concept of disaggregation, unbundling, limited retainers or whatever one likes to call it is hardly a new concept but a greater need for it than ever, it finds little favour and consequently clients and their lawyers continue to find themselves at loggerheads over misaligned expectations.

Our message is a simple one. We need to work considerably harder and more thoughtfully about ways to approach this particular issue in ways that achieve a judicious balance between trying to do a job properly, not exposing ourselves to unwarranted risk or liability and trying to deliver on the clients cost expectations. Dismissing these concepts out of hand as unworkable is unhelpful, will perpetuate the conflict and precludes firms from coming at the pricing angle from what can be a very constructive perspective.

Risk – Court of Appeal guidance…

When we engage in discussions with firms that we are working with, the conversation always circles back to two issues. The first is the risk/liability issue and the second is, ‘how do you go about deciding which bits to leave out?’ The second question is well beyond the scope of a short blog but so far as the first question is concerned, the 2015 UK Court of Appeal decision of Minkin v Landsberg [2015] EWCA Civ 1152 provides some extraordinarily helpful and authoritative guidance.

The Court of Appeal concluded that solicitors instructed on a limited retainer do not have a broader duty of care to their clients, asserting the importance of ensuring that lawyers can offer unbundled services.

Sharon Minkin pursued a claim against Lesley Landsberg, a family lawyer at Barnet Family Law, after problems arose from a consent order covering financial arrangements with Minkin’s former husband. Minkin blamed a lack of legal advice for the reason she had entered into the order.

But Landsberg said she had been instructed only to draft a consent order, after a previous order had been rejected by a district judge for being poorly drafted. She had not been instructed to advise on the merits of the agreement.

Lord Justice Jackson agreed that Landsberg did not have an obligation to give advice beyond what she had been instructed to do. The Court emphasised the importance of ensuring solicitors can unpack legal services without being held to a wider duty of care.

A checklist…

The Court helpfully summarised the applicable principles as follows:

i) A solicitor’s contractual duty is to carry out the tasks which the client has instructed, and which the solicitor has agreed to undertake.

ii) It is implicit in the solicitor’s retainer that he/she will proffer advice which is reasonably incidental to the work that he/she is carrying out.

iii) In determining what advice is reasonably incidental, it is necessary to have regard to all the circumstances of the case, including the character and experience of the client.

iv) In relation to (iii), it is not possible to give definitive guidance, but one can give fairly bland illustrations. An experienced businessman will not wish to pay for being told that which he/she already knows. An impoverished client will not wish to pay for advice which he/she cannot afford. An inexperienced client will expect to be warned of risks which are (or should be) apparent to the solicitor but not to the client.

v) The solicitor and client may, by agreement, limit the duties which would otherwise form part of the solicitor’s retainer. As a matter of good practice, the solicitor should confirm such agreement in writing. If the solicitor does not do so, the court may not accept that any such restriction was agreed.

We owe it to clients and ourselves to be more imaginative and creative in developing pricing options for clients if we wish to break the cycle of either over-pricing work and missing out on it or doing work that the client is unwilling or unable to pay for and which we end up writing off.