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Unbundled Legal Services

In the old days, you had to pay an attorney a "retainer" in order to obtain legal representation. Putting a lawyer on retainer meant that the attorney was standing by, ready to respond at a moment's notice to any legal problem. No legal problems, the lawyer still got paid.  But times have changed and most people are unwilling (let alone able to afford) to pay a lawyer for waiting.

Nowadays, most people only hire an attorney to represent them for the limited purpose of a particular lawsuit, or specific issue such as taxes. The purpose for which the attorney was hired is called the "scope of representation." When you hire an attorney for your divorce or estate plan, the attorney's retainer agreement will almost always specifically exclude anything outside the scope for which they were hired. But if anything happens that falls within that scope of representation, the attorney responds and the client incurs a fee.

The difference between the way things worked in the old days and the way things work now is an important distinction because lawyers who are opposed to the concept of limited scope representation are actually already practicing it when compared to the way their grandfathers practiced law.

For many years, lawyers defined the scope of representation. Not because they should have, but because they could. People would hire a lawyer for their divorce or other legal matter and quickly find themselves passengers on a runaway roller-coaster, fees growing exponentially while the roller-coaster went up and down and around in circles. When you got off, your pockets were empty and they lawyer’s were full. Another analogy might be that the client called their lawyer into the kitchen to make a pot of stew.  The lawyer stirs the pot and picks out the tastiest morsels. When the lawyer is full, they walk out of the kitchen and the client is left with a pot of broth.

The system was able to justify this abuse by hiding behind "ethics." Bar associations claimed it was in the clients' best interest that the lawyers handled everything. In reality, it was only in the lawyers' best interests because they were empowered to stir the pot as long as they saw money floating in the broth. When the case and assets were picked-over and nothing was left, the lawyer would settle things or get out of the case. Clients went into the system with stew and came out with broth.

In the last few years, reforming attorneys, who recognized the wastefulness and devastation wrought on their clients who could no longer afford to pay for their children’s college education, have exposed the corruption of the old model of legal representation and they have been campaigning for change. Change came in the form of "limited scope representation” and "unbundled legal services."

Unbundling is like à la carte pricing. You decide exactly what you want and what you don't want. You can choose to perform certain tasks yourself at a great cost savings. For other things, you might want the attorney to offer advice, or maybe play a larger role as defined by you. The attorney can only perform the tasks you authorize, so you have more control over your legal expenses. For this reason unbundling often costs less than "flat fee" services.

If you're comfortable and willing to prepare your own financial disclosures, why should you pay an attorney to do it?  If you want an attorney to weigh-in, you have that option. If there are long periods of waiting for the other party to take action, you don’t necessarily need to be paying an attorney to wait with you. When something happens, you can always call the attorney for their input. In the unbundling model, the client has complete control over the services they use and the costs they incur.

But change does not come easily. Many bar associations fought these new models with the argument that people would be unknowingly forfeiting their legal rights if they took advantage of unbundling. If they could, they would shout, "Get your hands off our pot!" Who's pot?  This paternalistic posturing hid what the system was really worried about; the lawyer’s monopoly on fixing the price of access to justice.

Clients have an absolute right to choose what they want their attorney to do, just as much as they have a right to choose their attorney. Slowly and gradually, the legal system has come to acknowledge and accept this fact.  For many legal matters, a full retainer still makes sense, but attorneys should have a duty to advise clients when that is the case and when the client might be better served by an alternative.  If a lawyer dismisses or won't discuss unbundling with you, look elsewhere – that lawyer might have their eyes on your pot of stew rather than on what’s best for you.