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Lawyers E&O Insurance: Evaluate Exposures When Offering Unbundling Legal Services


Lawyers E&O Insurance Evaluate Exposures When Offering Unbundling Legal ServicesRisk Management & Best Practices Key for Unbundling Services

Unbundling legal services is a way for attorneys to limit the scope of the services they provide to clients who are looking for this type of representation. Think of it as offering one’s services a la carte. In unbundling, the client’s legal matter is broken down into separate tasks, with an attorney providing representation to the client that is only related to one or more of those tasks. He or she does not provide the client with full legal representation. There are benefits for both the client and the attorney in offering legal services in this way, but there are also potential errors and omissions (E&O) liability exposures that need to be addressed with Best Practices and strong risk management protocols.

Unbundled services may include such things as providing basic legal advice; drafting pleadings, declaration or orders; reviewing documents; conducting legal research; negotiating; strategy coaching, preparation of exhibits; organization of discovery materials; drafting contracts and agreements; and ghostwriting, among others.  In unbundling legal services, attorneys provide access to specific services that individuals may attempt to do themselves. Attorneys will often charge less to provide these limited services, with many invoicing a fixed rate rather than a standard billable charge. Those who represent themselves (pro se litigants) or those with moderate to lower income may look to use unbundled legal services.

Attorneys can benefit, too, from unbundling, as they’re able to add a new source of revenue for clients who want a limited scope of representation. In fact, many of these services may fold right into the firms’ workflow so they can be provided efficiently. This type of offering, of course, is not for every firm and each law office has to determine if it’s right for them, including whether they have procedures in place to ensure that there is sufficient and adequate communication between the firm and limited-scope clients.

This brings us to the potential exposures that can arise from unbundling. For example, does the firm have a responsible member who is charged with following up with a limited-scope client to determine whether instructions were clear and that the client doesn’t have any concerns about completing the legal matter? Does the client have a clear understanding of what he or she is receiving through the unbundled services? If not, these issues could lead to allegations of improper professional representation or negligence due to an error or omission.

To help stem the potential for E&O claims, there are several key risk management and Best Practices protocols that should be implemented when offering unbundling legal services. These include, but are not limited, to:

  • First, determine whether a case be served well through limited-scope services or whether it requires full-service representation. Should you decide to decline to unbundle the services, be sure to record the declination in a written letter to the client.
  • Have the client provide informed consent of the limited-scope representation once you have made it clear what you will be providing. Be sure to lay out specifically the scope of the work you will be performing by listing the tasks that your firm is providing and those that your client is responsible for. Draft a checklist that lays out each party’s responsibilities. Should the responsibilities change, be sure to update that checklist.
  • Document the client’s file with all guidance and advice that has been provided, including all checklists and instructions that have been given to the client. Date all documentation.
  • Be sure to address any collateral issues that may arise related to the case that the client may have not discussed. This will lower the risk of the client alleging that you failed to advise on these issues.
  • Determine the form of communication that will be provided between your firm and the client – face-to-face meetings, phone conferences and/or emails. Ensure that the client is comfortable with the mode of communication.
  • Any ghostwriting on behalf of the client needs to be disclosed to the court.
  • If issues come up that are beyond the limited scope of representation you have agreed to, immediately suggest to the client that they seek another attorney to help him or her with the matter.
  • Stick to the tasks that you have agreed to and do not provide advice beyond the scope of work that are your client’s responsibility.

Of course, make sure you have proper Lawyer’s Errors & Omissions insurance to protect you in the event of a claim alleging professional negligence or an error or omission. Axis Insurance Services specializes in E&O insurance and can provide the right policy for your law firm. Please give us a call at: (877) 787-5258.

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Blogged on: April 11, 2014 by Mike Smith
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