Unbundling is not the answer

Last week the Legal Services Board called on lawyers to do more to promote ‘unbundled’ legal services, publishing research to back up its stance.

What are ‘unbundled’ services? Basically, it is about getting the client to do parts of the work themselves, and charging them less as a result.

The LSB gives an example of a consumer ‘preparing the evidence and the court bundle themselves and then directly instructing the barrister who represents the consumer at the court hearing’.

Apparently unbundling is becoming particularly popular in private law family matters, where it is being used to make up for the loss of legal aid. Fixed-fee packages are being offered to cover undefended divorce, or defined stages in children or finance cases, such as representation at initial, interim or final hearings. Fixed fees are also being offered for help with specific documents such as divorce petitions.

In civil matters, similar packages are being offered for small claims (although there would normally only be one court hearing); as well as advice on how clients could draft documents themselves, or the drafting of documents for them.

The research commissioned by the LSB - which involved interviews with 35 consumers who had used unbundled services, as well as 14 legal services providers and six judges - found that people were generally satisfied with the way it had worked. Consumers felt they had greater control, and in some cases believed they could get things done quicker than the solicitor.

So the LSB has chastised the profession for not doing more to shout from the rooftops that it is prepared to offer this half-service, for a cut-down price.

But if I were running a law firm, I’m not sure I would be going down this particular route.

It’s not particularly surprising that, in this very small sample of consumers, there was general satisfaction with unbundling. But we should be wary of concluding that this development would be good for consumers overall. As the LSB acknowledges, this type of offering is not suitable for more vulnerable consumers, who lack the understanding needed to complete the tasks themselves. In fact, depending on the precise nature of the work, it is probably only good for those with a decent standard of written English – and an unusual ability to be impartial about their own case.

Unfortunately, while the LSB tells lawyers that they need to start advertising and promoting unbundled services more obviously, it doesn’t offer any tips on how to explain to a client, yes, we’ve advertised this unbundled option, but we can’t offer it to you because your mental faculties aren’t really up to it.

What did the judges who were interviewed think of unbundling? Again, it is not really a surprise that they felt broadly positive about the concept. Faced with the current tsunami of litigants in person, any input from a lawyer - even if only on certain aspects of the case - is going to be welcome.

The legal services providers interviewed had mostly started providing unbundled services in the past two years, typically through fixed fees, or a ‘pay as you go’ model. So what did they think of it? There were some positive comments, for example that it allowed them to serve clients who could not otherwise afford it. But there were three main concerns.

Firstly, that if the client couldn’t cope with the work, it would adversely affect the outcome of the matter. Secondly, that clients may not fully understand the limits of what the solicitor has agreed to do for them. Thirdly, the professional negligence and complaints risk of giving advice based on poor initial information from clients – building a house on sand.

These are all very valid concerns – and are not the only problems, because unbundling does not seem to sit well with solicitors’ regulatory requirements or professional indemnity issues either. The work may be less, the fee will be less, but is the risk to the solicitor any less? Quite possibly not.

The research features some interesting quotes from the providers offering unbundling, which are very telling: ‘There’s the risk element in terms of negligence. If you’re just taking snapshots of a piece of litigation, then there is a danger that your advice isn’t what it would have been had you known the whole picture.’

‘I do find myself thinking, “God, if you would just let me do it, I could do this for less stress and less money”, because I spend as much time hand holding as I would actually just getting on and doing it.’

‘Either [the client] will get a dreadful result, because they made such a mess, and no one’s got the time to sort it out, or they will just simply fall apart and take a settlement because they don’t know what to do.’

Given all the negatives, why are firms doing down this route at all? One provider made it clear that it had begun offering unbundled services because ‘it is probably the way legal services are going, and if you sit like a dinosaur… you are going to lose out’.

Given the high risk and low reward unbundling seems to offer, I’d say it is something most firms could afford to miss out on.

Rachel Rothwell is editor of Litigation Funding magazine