As readers of this blog will hopefully have observed, I’m a very keen observer of up-and-coming developments in the legal industry. Frankly it’s my job to follow and understand emerging market developments and, particularly, how they may affect the way we serve our clients.

And so it was, with such a mindset, that almost two decades ago I came across a concept being touted as the next BIG thing: ‘unbundled legal services‘.

Along with ‘covenant lite loans‘ (this was pre-2008 after all), ‘unbundled legal services’ were going to transform and change the way we serviced our clients; particularly those sophisticated purchasers of legal services.

Then, just like that, ‘unbundled legal services’ went exactly…

…nowhere – never to be heard of again in polite conversation!

Return of the Jedi!

I’m here to tell you that, following a recent report by the Solicitors Regulation Authority (SRA) [England and Wales] – published on 15 June 2023, ‘unbundled legal services’ are back from the dead!

Before I go into what the SRA’s report says, and why it might be important, let’s take a helicopter look at what ‘unbundled legal services’ meant back in the early 2000s and what ‘unbundled legal services v2.0’ means today.

Unbundled legal services v1.0

From the outset ‘unbundled legal services’ were also known as ‘limited scope representation’, I think in part because this was the term more commonly used in the USA – although I’m happy to stand correct on that. Anyhow, at the name suggests, ‘limited scope representation’ means exactly that: your lawyer won’t do everything for you on your matter and it is up to you and your lawyer to divvy-up what they do and what you do.

For this reason ‘unbundled legal services’ were seen as being extremely sexy because you – the client – got to choose what your law firm did [and charged you for] and what you kept in-house. Even better, you – the client – now had the option to appoint subject matter experts for the “grey haired work” (as Maister would call it), but for more menial work you could appoint an LPO (anyone remember “Legal Process Outsourcing”?).

Such radically thinking could even lead to such a thing as ‘coopetition’ (as I have blogged on previously!).

But, despite the obvious benefits of growing headline revenue with ‘unbundled legal services’, I would hazard a guess that 20 years later less than 1% of most law firms’ revenue is derived from this product. Evidence of my thinking here is, I believe, substantiated by a recent article in the Law Society Gazette: ‘Unbundling? Never heard of it, say 40% of firms’ by John Hyde.

Unbundled legal services v2.0

So back to the SRA report and why unbundled legal services appears to be back in vogue.

While limited to “family law” issues, the SRA report includes two important comments:

• The first, more a definition, is: “Unbundling describes the process of dividing tasks in a service between the consumer and provider. This can, among other things, make them more affordable and accessible.” and
• the second, going to the crux of the issue: “Solicitors providing ‘unbundled’ services could make legal help affordable for those whom it is currently too expensive“.

QED, a possible solution to the Access to Justice (A2J) issue?

While I think both of those comments are correct, I want to quickly pause and cover a few of the other comments made in the Report. These include:

1. We found that unbundling does have the potential to increase access to justice as it makes some legal services more affordable.
2. Law firms could attract more clients as those clients knew they could in fact afford an unbundled deal.
3. There are low levels of awareness of what unbundling is and how widely available it is, even though a number of providers already offer this.

All of which, in my experience, are true in the broader aspects of unbundling.

To finish up..

To finish up I’m going to use the SRA’s own wording in the Report; which is that the unbundling of legal services comes with complications that include:

1. We found no significant difference in the level of satisfaction between consumers who used unbundled legal services and those who used an end-to-end service.
2. Some consumers also wanted to have more control over their case.
3. Some [law firm] providers would like to expand what they do but there are concerns around the impact on firms’ insurance premiums and the possibility of legal action if things go wrong which they were not responsible for.

Let’s not beat about the bush: Points 1 and 2 are relatively damning; but it is that last point where, in my opinion, unbundled legal services have died the death of a million cuts: while most firms and lawyers would consider offering this service, most insurers of professional indemnity [PI] insurance have no ideal of what it is or how to price the risk.

The last point is especially the case given the fact that most law firms have no real understanding of how to provide a letter of engagement to their clients with clearly defined scopes of services that don’t include a million assumptions and caveats or: “it depends” clauses.

Anyhow, setting aside all of the above, I continue to hope we will see a growth in ‘unbundled legal services’ while remaining sceptical it’ll happen.

If you need some help with how you can use unbundled legal services to successfully differentiate your firm’s offering, feel free to reach out to me for a chat.

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