Unbundling is old hat...

Unbundling as a service delivery and price modulation strategy is as old as the hills: for everyone but law firms. Quite a bit has been written about it recently (eg. Legal Futures and Law Society Gazette) but sadly, it is another example of how our pricing epiphany is most other goods or service providers old rubbish wrappings. Still, better late than never. Let's get on with it as it does represent another pricing option...

What is more, it is a trend that I see increasing and if firms don't find ways to embrace it, and deliver it profitably without unjustified risk exposure, we will once again be leaving money on the table.

There is nothing magic about unbundling (or 'disaggregation' if you want to sound smart, or silly?). It is the process of deconstructing a legal project into logical constituent parts or stages and then considering to what extent, some of those tasks could be handled other than in your firm. This could include outsourcing to a legal process outsourcer or another firm in a lower cost centre or another office of your firm in a lower cost centre.

More usually, it refers to the process of sharing tasks between the firm and the client. This could be initiated by the firm seeking to come within the clients' budgetary constraints. It could be initiated by the client wanting a 'dip in, dip out' arrangement. This latter phenomenon has gained particular traction in the family law arena.

Opportunity or unneccesary risk?

It brings with it some opportunities as well as some threats and challenges. Ironically (or perhaps not surprisingly?), one of the biggest challenges has been and will continue to be the mindset of practitioners. Mea culpa. I can recall the first time I was asked by a client to implement such an arrangement some 10 years ago. I was aghast. My immediate reaction was that either I do the whole job or I don't want any of it. It will be professionally unsatisfying doing bits and pieces and besides, there are surely risk management issues if we aren't directly involved with the whole job from end to end?

My attitude has changed and like so many of the evolving delivery and pricing dynamics impacting the profession, we either find a way to accomodate it or someone else will. If a client could benefit from £10,000 of legal work but can't afford that, would you rather be asked to do half of it and be paid £5,000 or do none of it?

Scoping the retainer is critical

There are however some dos and don'ts, the most important of which being something we have historically been pretty slack at and that is complete unequivocality around the scope of the retainer; something we refer to as the Triangle of Pricing Certainty in our Pricing Masterclasses. The 3 points of the triangle comprise the Scope, Assumptions and Exclusions, and with unbundled work, there is no margin for error if you want to avoid a potential professional indemnity insurance notification.

Law Society practice note....

It is therefore timely and very helpful that the Law Society has issued a practice note on the subject of unbundling. It has been drafted to specifically address the needs of family lawyers but the principles are just as valid for any area of legal practice. I commend it to you. You can go straight to the practice note by clicking here.