Manage client expectations to be safe on limited scope retainers
Helping clients reduce the costs of resolving family disputes has become a practical issue for many family lawyers. As a result, many family lawyers are offering to do work on a limited scope retainer or “unbundled” basis. This means doing part, but not all, of the work on a legal matter. This could include one or more of: reviewing a document, the preparation of a pleading, providing advice on one issue, or representation at a single hearing.
Unbundled legal services come with potential risks for both the client and the lawyer. In choosing to partially represent him or herself, the client assumes much greater responsibility for decision-making on legal issues and how to navigate an unfamiliar legal system. The lawyer, in turn, loses access to information and a view of the bigger picture, as well as control of the matter.
Lawyers need to keep in mind that limited scope representation does not mean less competent or lower quality legal services. For Ontario lawyers, the commentary to Rule 2.01 “Competence” specifies that a lawyer considering whether to provide legal services under a limited scope retainer must carefully assess in each case whether, under the circumstances, it is possible to render those services in a competent manner. And further, new Rule 2.02(6.1) provides that: “Before providing legal services under a limited scope retainer, a lawyer shall advise the client honestly and candidly about the nature, extent and scope of the services that the lawyer can provide, and, where appropriate, whether the services can be provided within the financial means of the client.”
Thus, under the Rules, a lawyer and client can limit the scope of representation, however, the limitation must be reasonable under the circumstances. Limitations will not be considered reasonable if the time allotted is not sufficient to yield advice upon which the client can rely. Lawyers providing unbundled legal services owe the same duties of competence, diligence, loyalty and confidentiality to limited-scope clients that they owe to full-service clients.
Lawyers also need to recognize that unbundled legal services are not appropriate for all lawyers, all clients, or all legal problems: Further to a new commentary under Rule 2.02(6), limited scope representation will generally not be appropriate if a client’s ability to make adequately considered decisions in connection with the matter or representation is impaired due to minority, mental disability or for other reasons. That commentary states: “a lawyer who is asked to provide legal services under a limited scope retainer to a client under a disability should carefully consider and assess in each case how, under the circumstances, it is possible to render those services in a competent manner.” Lawyers should take care when they are providing unbundled services to clients who are or might be under a disability.
Another danger area is providing further assistance to a client after a limited scope retainer is terminated. In many cases, a matter handled on a limited scope retainer basis will have started before the lawyer became involved and/or will continue on after the work the lawyer agreed to do was completed. If the client comes back for further assistance, the lawyer should make sure a new full or limited scope retainer is in place.
At the retainer stage, the lawyer should also assess whether the potential client’s expectations are realistic, and whether he or she readily adjusts those expectations in response to new information. If the answer to either of these questions is “no”, accepting a limited retainer from this particular client may be risky.
Case law from the US demonstrates there will be post-matter disputes over the scope of lawyers’ representation on limited scope retainers. Dissatisfied clients may challenge purported limitations by refusing to pay fees, filing malpractice suits or bringing ethics complaints. Malpractice allegations raised in those cases include that the lawyer was not authorized to undertake certain aspects of the representation; that the fees were unreasonable given the scope of representation; that the litigation result or settlement should have been more favourable; or that the lawyer did not handle an aspect of the matter properly.
Good communication with the client can go a long way toward minimizing the risk of these kinds of allegations. And note that a written retainer is required for unbundled services (see Rule 2.02 (6.2) of the Rules of Professional Conduct), and it should be carefully drafted, in unambiguous language, to describe the scope of the work the lawyer in being hired to do. In particular, where the client is declining aspects of service, or undertaking to handle them independently, the details of these arrangements should be reviewed verbally with the client and spelled out in writing. The Rules require that clients give informed consent to a lawyer’s delivery of unbundled legal services.
By communicating clearly and honestly about costs, expected outcomes, and unexpected contingencies, and taking the time to listen actively and ask questions, you can manage both the client’s expectations and your own claims risk when working on a limited retainer.
This article by Dan Pinnington, VP of Claims Prevention and Stakeholder Relations at LAWPRO, originally appeared in the April 10, 2014 issue of The Lawyers Weekly published by LexisNexis Canada Inc.