The case for limited-scope retainers

Kevin Cheung
Whether your practice is transactional or litigation-focused, one area of burgeoning opportunity is in providing limited-scope legal services.  

The legal market is increasingly competitive. Online legal services providers are growing in number, law offices are opening up in Wal-Mart and, in some jurisdictions, paralegals are moving to expand the services they can offer. These examples demonstrate a trend toward more cost-conscious legal services.  

The legal marketplace is crowded due, in part, to lawyers providing similar services delivered in the same way. Limited-scope services offer a way to target unmet legal needs.

What is a limited-scope retainer?

A limited-scope retainer is a term commonly interchanged with targeted legal services, unbundled legal services and discrete legal services. It is the provision of legal services for part, but not all, of a client's matter, as agreed to between lawyer and client. Examples of such services include assisting in a case conference or mediation, appearing on a motion or drafting or reviewing a document such as a purchase and sale agreement.  

The value proposition for sole and small firms

Three reasons that sole and small practitioners should consider offering limited-scope services are: First, it allows lawyers to tap into a growing market with a demonstrated need. Second, it can foster a strong lawyer-client relationship. Third, it frees up your time to focus on other work.   

Tapping into a growing market

Many people who need legal services are reluctant to hire or even approach a lawyer for fear of the costs involved. Many of these people do not need a large firm and do not need a lawyer to do everything for them. They may be sophisticated enough to manage their matter but just require help with legal procedures or one or two steps. This is an unmet market of legal work that is largely ignored because clients do not seek out assistance and many lawyers do not proactively offer such services.  

The next time a potential client calls just price-shopping, do not simply quote your hourly rate or fixed fee. Explore what their needs are and suggest ways that you can limit the scope of services to meet their needs and budget.

A more invested client

In order to effectively deliver limited-scope legal services, the client’s goals and needs must be clearly identified. By going through this exercise with the client, they can better understand their role in the legal process. If they understand their role and understand that they have major responsibilities, they will be more invested in the work rather than just leaving everything to the lawyer.

Limited-scope retainers allow lawyers to attract clients they otherwise would not have connected with. The residual implication is the potential to develop a long-term relationship with such clients as other legal needs arise.

Better allocation of your time

A collateral benefit of limiting your role in a client’s matter is that you free up your time to do more high-value work elsewhere. An example of this is in estate administration, where the lawyer who is retained to do everything may be stuck doing a lot of the executor’s work, which may only be billed at the executor’s rate. Limiting your services will ensure your time is better spent.  

Exercise caution when offering limited-scope services

While limited-scope retainers present a wealth of opportunities, caution must be exercised when offering such services. There are numerous resources from law societies and insurers that explain in great detail the risks and best practices. The recurring tips for lawyers offering limited-scope services are:

1) A written retainer agreement clearly defining scope of work is a must;

2) Communicate to other lawyers involved in the matter, and to the court, if applicable, that you are only acting on a limited-scope basis; and

3) Offering limited-scope services does not mean the duty of competence is ignored. Full investigation into a matter must still be done. 
Limited-scope retainers are an increasingly common way of providing legal services. There are still significant, unexplored opportunities in this area for entrepreneurially minded sole and small practitioners to develop.

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