In its ongoing strive to modernise the legal sector, the SRA has recently undergone a fresh drive to encourage law firms to offer ‘unbundled services’ with the Regulator unveiling plans for a pilot scheme to look at the benefits. As things stand, the biggest challenge it faces is the lukewarm enthusiasm towards the approach within the legal sector and, specifically, the concern that it may expose legal practitioners to potential breaches of the SRA’s own principles. So what exactly are ‘unbundled services’, and why is the SRA so keen to push them?
What are unbundled legal services?
‘Unbundling’ means that solicitors and clients agree which elements of the legal process each will carry out, some being undertaken by the solicitor and some by the client.
This is not a new concept and has been floated for several years by the SRA as a means of “tackling unmet need”. As the SRA explain, “Unbundling involves breaking legal work up into specific tasks and agreeing with the client who will do what. A client might be offered a variety of options, for example: a ‘pay as you go’ model, where they can get advice from a solicitor as and when needed; or ‘menu pricing’, where a solicitor deals with certain parts of a matter for a fixed fee. This can make services more accessible”.
The idea is to ensure greater access to legal expertise, especially where a complete service might not be affordable to a potential client. Another perceived benefit is that some clients will be able to exercise greater control over their matter if they have a preference for such an arrangement. This may be the case if they have been working on a matter themselves but require some legal input during the process. According to the SRA, some law firms already offer unbundled services, with mixed success; “Many firms are already experimenting with offering services in this way, with differing results. Some have found difficulties, while others have had success and have continued to make such a service available”.
Is there a real risk for legal practitioners of providing unbundled services?
Understandably, some solicitors are concerned that by providing unbundled services, they are exposing themselves to possible claims for negligence and to a greater likelihood of unintentionally breaching the SRA’s own rules and principles, including Principle 7 (to always act in the best interests of each client). It is also entirely reasonable to suppose that without such a service offering, some people who need legal assistance may not be able to readily access professional legal support where they need it, or at least may not be aware that such a provision exists.
The key will be in managing any risks and exposure while providing legal expertise which clients would otherwise not have sought. According to the SRA, this risk management will involve, amongst other things:
- Defining a clear scope for the solicitor and client and ensuring this is fully understood – including any work that a legal professional would normally be expected to do but would be specifically out of scope, due to unbundling.
- Providing clear advice about the work the client will need to undertake – this will need to include consideration by the solicitor of the needs and circumstances of each client to ensure that unbundling is appropriate. In some cases, a solicitor may need to explain that unbundling may not be suitable given the circumstances.
- Being open and honest with a client if the information provided to the solicitor is not adequate and sufficient to allow them to act in the best interests of the client.
- Ensuring that clients understand the impact on their costs as a result of how they wish to unbundle legal work.
By putting in place robust processes and procedures to manage unbundled legal work, from onboarding to completion, and refining these over time, law firms should be able to gradually reduce their risk exposure while opening up new revenue opportunities.
SRA unbundled legal services pilot
In an attempt to demonstrate the potential benefit of unbundling, the SRA is about to kick-start a pilot with law firms who offer, or are keen to try, this new operational model in family law. Core to this pilot will be finding ways to provide a ‘safety blanket’ to ensure unbundled legal service providers do not breach Principle 7. It will also attempt to prove that regulation need not be a barrier to providing unbundled services. We will keep you up to date with the outcome of the pilot when it is known.
Unbundled services will become an increasingly popular legal service offering, not least because as the public gains a greater awareness that such an option is available, demand may increase correspondingly. The more that the SRA can do to demonstrate and provide resources in the form of toolkits to show how to operate unbundled legal services in a manner that protects both the solicitor and the client, while providing access to legal expertise that would otherwise be out of reach, the more likely it will be that this will become a standard type of service offering. As always, change can be unsettling, and this is especially so in the legal sector, but embracing new working models will always be important for maintaining competitiveness in the UK’s legal marketplace.
We have been helping solicitors and other legal professionals with disciplinary and regulatory advice for 25 years. If you have any questions relating to an SRA investigation or an SDT appearance, please call us on 0151 909 2380 or complete our Free Online Enquiry.