Austin's angle: up scope

As you know, we must issue a letter of engagement when taking on a new client and/or new case or transaction. The older among us still probably somewhere in our waters harbour a grudge that this is a hassle and gets in the way of doing the work and clearing a desk already piled high. Well, the reality is that it is a terrific bit of risk management, and is no more than you or I would expect if we hired a plumber or took out an ISA – a statement in advance of who we are, who regulates, and what to do if something happens, with of course a clear statement of the costs arising.

It also sets a tone. The firm that appears to the client as one accountable, efficient and trustworthy is a firm to be instructed with confidence. OK, some clients won’t read the terms and conditions, either because they already trust you or because this document falls under the definition of small print and thus is blithely ignored while the client gets on with the business in hand – but the letter of engagement is a Good Thing.

In my years on Law Society of Scotland client relations committees, letters of engagement played a depressingly large part of the problems we dealt with. All too often a client ended up complaining because what happened or did not happen was a surprise to them, and the solicitor had little or nothing to counter with, due to lack of terms and conditions sent out. Fee charges were at the head of this, but it could as easily be other aspects of the work which would have been covered by a proper statement of terms sent out when it should have been (or at all).

The letter of engagement is a sine qua non, a necessary item – but sometimes only a start. A key phrase these days is scope of engagement. Every bit of work we do is unique, but there are two principal/general issues around scope of engagement.

The first is the universal. In every purchase there is, amongst many others, the matter of conclusion of missives and what that means. We know as solicitors that it means a binding contract, subject to searches etc. Does the client know that? Can we properly assume they do? And crucially for us – have we ever been on the record as telling them?

It is good/essential to go through the missives in a meeting or over the phone and note in our file or case management history that we have done so and what the client’s position on clauses is. But it needs to be written and recorded, preferably also to the client. One assist to this is the preliminary/explanatory note to clients. We provide clients upfront with a variety of plainly written notes, differing for a purchaser, a seller, a prospective tenant or landlord, telling them the salient points – including, in the present example, a paragraph about what missives are and what it means to conclude them. Notes will explain unwarranted alterations, buildings insurance (we don’t arrange it and cannot be assumed to), money laundering funds rules, timing of receipt of mortgage instructions, release of free sale proceeds – plus a million and one things that are likely or possible in the transaction being commenced.

In other words it is a description of what we do and don’t do, as well as what our actions on clients’ behalf mean in practical terms. It is then the client’s responsibility to read and understand that. Not that we are now bombproof – we still need to keep them actively advised as we move along – but it is a terrific backstop.

The second aspect is a more tailored product. Example – when a client comes to you so outraged about his treatment by a company, partner, opponent, customer, that litigation is instructed, it is crucial to make the client aware of how litigation works generally (see last paragraphs above), but also in the particular case you are involved in. You need to tell the client what will happen, what they/we need in the way of evidence, some sense of the time it will take, and crucially a description of the expenses aspect of the case.

Also you need to give a realistic assessment of the chances as best you can – with a view to revising this in the light of new information or evidence as it arrives – and indeed initially set the client up for revision of the chances later on, because at the outset you didn’t have all the evidence. The worst thing is for a client to turn round and say “You said we’d win when I first came in” , and you not be able to show them a measured pre-assessment and re-assessment of the chances that says what you really advised.

The moral is that even more than in medicine, prevention is better than cure. Clients are all different. Some understand in a quite experienced or sophisticated way that the practice of the law is part science, part art, and outcomes need not be guaranteed. But we are in a more consumer-orientated world than ever before. Indeed you’ll know there is a pursuers’ panel of solicitors of our own profession whose job it is to assist those clients who wish to claim against us. No complaint about the existence of experienced lawyers – they have a respectable job to do – but risk management ought to keep them at bay.

Compared to when I started, the infrastructure surrounding the delivery of legal services is vast – client ID, terms of engagement, risk assessment, money laundering issues, IT security and the rest. But going back to my old late father, he used to say that if it becomes apparent during the course of a case that someone is going to get into trouble, make sure it’s your client.