For the legal profession, the impact of the current recession has been felt the most by the nation’s one million-plus lawyers who are sole practitioners or members of small firms.
These lawyers are not at the top of the compensation scale to begin with. They generally work on what’s called “the consumer side” of law, representing individual clients and small businesses in personal injury, family, criminal defense and personal debtor cases that tend to pay less. In tough times, many such practitioners have experienced a reduction in the number of clients they serve. And, inescapably in such an economy, these clients tend to drag out their payment for services. The financial and economic difficulties such lawyers face have been substantial.
Here’s a new idea on how to cope. According to the ABA Journal, the chief justices of the New Hampshire and California state supreme courts, noting the rise in pro se representation by people who cannot afford a lawyer, have advocated a cost-saving measure known as limited scope representation.
The justices say that 41 states have adopted an ABA model rule or related variations that allow lawyers to take only a part of a case. That could mean a person or business hires a lawyer to help them fill out forms, prepare documents, coach them on how to present in court or represent them in court for one or two hearings. The justices disagree with lawyers who see this as undermining the value of the legal profession. In a New York Times column, they wrote: “Litigants who can afford the services of a lawyer will continue to use one until a case or problem is resolved … [b]ut for those whose only option is to go it alone, at least some limited, affordable time with a lawyer is a valuable option we should all encourage.”
This is called “unbundling.” Giving representation this way to people of limited means also gives business to lawyers who otherwise would not have it. It recognizes that lawyers are in business to make a living while helping people with their personal issues. It draws a distinction between providing services at a reasonable fee, and providing pro bono services without charge. Lawyers have a professional obligation to provide legal services, according to some in the profession, not just to the clients who can pay for them, but to the people who need but cannot afford them. This position is not without opposition. Limited scope representation occupies a middle ground between the two.
If the individual has modest means and can pay something, the process for determining the fee may be different. One could continue to bill by the hour, but for a limited scope as agreed to by both the lawyer and the client. Or, the lawyer could set a fixed fee for the unbundled segment.
Overall, this fee setting process is no different than the process for determining a full engagement fee. If you do limited scope representation because the client is short of funds for the full engagement, the lawyer may want to be more diligent and request full payment in advance of delivering the service or advice. Without this, the client may exert subtle or overt pressure to ultimately make the legal service a pro bono matter. If you tell the prospective client what the cost will be before assisting him/her, the client will not be surprised at the end. You will likely have a happier client, one that is satisfied with her/his decision to retain you.
As the justices point out, this may be the best way to provide affordable legal service to those who are not indigent — while at the same time giving lawyers paying work that may even lead to a full-time client later on.
Ed Poll J.D., M.B.A., CMC is the principal of LawBiz® Management, a national law firm practice management consultancy based in Venice, California. For more information, visit his Web site www.LawBiz.com or email him at EdPoll@LawBiz.com.