When clients ask and expect too much

This month, in the first part of a two-part article, Alistair Sim considers how the demands and expectations of certain clients can create increased risk of claims and client dissatisfaction.

If only we could count on all our clients being “model clients” with reasonable, realistic expectations.  While the world would not yet be perfect (there would still be plenty of challenges to wrestle with), we’d at least be able to count that we and our clients were pulling in the same direction.

Back in the real world, there are clients around who are anything but reasonable, who place demands on us which are unfair and have expectations which are simply unrealistic.  That situation can clearly increase the risk of mistakes and claims and the potential for dissatisfaction and complaints.  We therefore need to be careful about the work we taken on and take care to manage client’s expectations as regards both service and results.

Unrealistic client expectations

It’s easy enough to understand how, quite innocently, some clients entertain expectations which are unrealistic.  A combination of natural optimism; lack of experience and ignorance of potential pitfalls could readily explain how clients might be certain in their own minds but entirely wide of the mark about –

• Achieving a particular price for their property.
• Having a tenant removed, their divorce formalised or their house purchase completed by a particular date.
• Receiving a court settlement of a certain amount

You would certainly be asking for trouble if you allowed your clients to believe that a particular result in a transaction, litigation or an executry was guaranteed.  While of course you will always use your best endeavours to help your clients achieve their desired outcome, there will almost always be factors beyond your control which mean that the client’s objective is unachievable or at nay rate isn’t guaranteed.

Client engagement letters and terms of engagement go part of the way in helping to manage clients’ expectation by recording what you have and have not agreed to do for them; what you will charge for doing the work and how your charges may vary if the nature of the transaction changes.

Whatever form of communication you use to achieve this, at all costs make sure that your clients appreciate that a particular outcome is not and cannot be guaranteed.  There will be changes as the transaction or litigation or executry progresses and you will need to ensure that the client understands how these changes impact on the completion date, on the likely outcome in terms of price or damages achieved, on the level of your fee, on other costs to ensure that your client’s expectations remain realistic.  Make sure you record this on the file – in the absence of any record on file, the client’s version of your explanation or agreement may be preferred to yours in the event of a dispute.

Unreasonable client demands

There are all sorts of ways in which a client may place demands on you which, from your point of view, are unreasonable.  The client may put pressure on you to –

• complete a piece of work for them within an extremely short timescale.
• undertake specialist work which is outside your own/ firm’s expertise.
• undertaken work of significantly higher value than the norm for your practice.
• act for more than one party to a transaction in order to minimise costs.
• enable settlement of a transaction to proceed in spite of eg the absence of documentation.
• assume more extensive responsibilities than you consider normal/reasonable.

Easy to say perhaps but remember that you are in control.  You can and should retain that control by deciding for yourself whether you take on a particular client or piece of work.  You should only do so if the client and piece of work meet your engagement criteria including capability and resources to complete the work in accordance with the client’s reasonable expectations.

A recent analysis of the factors which contributed to claims of high value indicated that client pressure was a significant factor in a number of claims.  As an example, in the past some solicitors have been prepared to issue letters of obligation undertaking to produce documentation to enable transaction to settle on the scheduled date of entry.  In some of these cases, the documentation was never forthcoming, the solicitor had to intimate a claim and a doubled self-insured amount applied.

How to respond to pressure from clients?

Time pressures – try to manage clients and their expectations so as to minimise the time and other pressures that you are subjected to.  Accepting that time pressures are a fact of professional life, having checklists and file checking procedures will help you avoid overlooking important points and help to ensure you pick up mistakes.

Specialist work – do not give into pressure from clients or colleagues to undertake a piece of work which involves a specialism of which you have no experience.  It could prove to be a very expensive and stressful learning curve.

Very high value transactions – remember to consider the claim potential and the insurance implications when contemplating a piece of work which involves a much higher value than the firm’s normal range.  Professional Indemnity insurance in on a “claims made” basis which means that, if you arrange extra cover (Top-Up insurance for several years and that could be uneconomic if the cover is required for only this one high value transaction.

Extended responsibilities/duty of care – solicitors are regularly checking with Marsh as to the extent to which the Master Policy would cover them in the event they take on responsibilities which go beyond the scope of engagement that they are familiar with.  It is clear that, so far as possible, solicitors are seeking to avoid assuming unduly onerous responsibilities.

Powerful clients – major business clients have been known to pressure their solicitor to follow a particular course of action or turn a blind eye to something that might prejudice, for instance, the position of the client’s lender.  Do not succumb to such pressure.

Conflict of interest  - before agreeing to act for more than one party to a transaction, be clear that there is no actual conflict of interest and be clear about the requirement to withdraw in the event of a conflict emerging.

Action points

• Always remember you are not obliged to accept any client or any individual piece of work.
• If a client’s expectations are unrealistic, be sure to correct them.
• If a client’s demands are unreasonable, be prepared to say “No”.
• Consider what your criteria should be for taking on a particular client or piece of work.
• Consider whether there are any conflicts or potential conflicts?  Are you prepared to proceed in spite of the potential for conflict to arise?
• Satisfy yourself whether your firm has the requisite skills and adequate resources?
• Consider the Professional Indemnity Insurance implications and the potential cost of maintaining increased cover for as long as there remains a risk.

The information in this page is (a) intended to provide guidance on matters of practical risk management and not on issues of law and (b) is necessarily of a generalised nature.  It is not specific to any practice or to any individual and should not be relied on as stating the correct legal position.