The legal aid cuts will inevitably have an impact on the availability of legal services for those on lower incomes. There may be more pressure on the court system, if the already increasing number of litigants in person continues to rise.  Firms also need to look at how services are delivered.  Andrew Nickels, Risk Manager at Zurich Insurance plc, suggests some practical measures for firms considering a fixed fee or unbundled service approach.

"What is clear is that clients need a means of obtaining knowledgeable, affordable legal advice. Fixed fee packages, or unbundled legal services, may provide the
solution for some firms.  Before taking this route, firms should understand, and have a strategy for addressing the associated risks.
Fixed fees
Some law firms are already offering fixed price packages, for example, for family services such as assisting with the making of the initial court application; further packages are then available to provide ongoing advice where required – pay as you go, a convenient means of allowing clients to keep control of their legal expenses.

It is very important to specify precisely what is included in the fixed fee –and more importantly, what isn't. It is essential to learn from the experience of fixed fees in other  ields. Many conveyancing firms have been inundated with claims arising from the lack of knowledge and appropriate skills of those doing the work – as that leads to more
claims and is more expensive in the long run. Your fixed fee must be realistic.  Robust case management systems can also assist in ensuring that the volume aspects of the work load are processed cost-effectively while more complex issues are directed to more specialist fee-earners.

Unbundled services
This is the provision of discrete events of legal assistance under a partial retainer; as  opposed to a traditional retainer where a solicitor typically deals with all aspects from initial instructions to conclusion of the matter.

The risks inherent in this way of working are significant– the Law Society is so concerned that it issued a practice note on 1 May 2013 (www.lawsociety.org.uk/advice/practice-notes/unbundling-family-legal-services).
The essence of unbundling is that the client leads the case, so the solicitor does not accept service of documents, does not send out correspondence in the firm's name or otherwise communicate with third parties,does not incur disbursements and does not go on the
court record.  There are some limited retainer models that are close to a traditional retainer in terms of the service offered to the client, but only for clearly defined elements
of the case – the greater the solicitor's involvement, the greater the risk that a full retainer could be implied."

Andrew Nickels, Risk Manager, Zurich Insurance plc

© Zurich 2013, reproduced with permission.

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