Unbundling has “untapped potential” states LSCP

The Legal Services Consumer Panel has concluded that legal unbundling services should be promoted more proactively in a bid to reduce scepticism and encourage more firms to offer the service.

Defined as “the separation of tasks within a package of legal services between the consumer and the legal service provider” in which the two parties agree which parts of the package the client will undertake, the legal watchdog stated in it’s findings that unbundling services have “untapped potential”.

But reports show that the take-up of unbundled services has reduced over the last five years, with unbundling accounting for just 16% of legal services delivered in England and Wales in 2020, down from 19% in 2015.

Figures show that ethnic groups used unbundled legal services less in 2020 compared with 2015 as 17% of black Caribbean, 34% of Pakistani and 24% Chinese of consumers chose to break up legal services compared with just 14% of white British consumers. Similarly regional splits in consumer use of unbundled services was evident as those based in London chose to use an unbundled arrangement more than regions outside of the capital. The percentage of female users as well as those in the 18-34 age group has also decreased since 2015.

Despite widespread scepticism from legal providers, the panel stated that any fears or reluctance to offer the service could be overcome by better use of case management systems and technology to reduce the risks. The panel also requested additional support from regulators to provide clear and effective guidance and technological tools to support lawyers who want to offer particular services.

The panel commented on it’s call to regulators to support unbundling initiatives, stating that:

“The SRA has not issued any regulatory guidance that emphasises the role of unbundling in widening access, the opportunity it provides for increased business amongst providers, or guidance on assessing consumers’ capability.  The SRA should explore the feasibility of encouraging providers to offer unbundled services as a standard feature.”

The SRA has, however, recently launched a pilot scheme to assess the benefits and drawbacks to firms and clients undertaking unbundling services, and by doing so wants to create a “safety blanket” via a network of firms that will work together and share ideas and advice.

A Law Society spokesperson commented on the scheme:

“Some practitioners have started to deliver forms of unbundled services, but concerns remain, particularly around the risk of being found negligent for things the solicitor believed fell outside the retainer.”

“This risk is one of the biggest barriers to the prospects for unbundled services to deliver costs savings. We hope that the SRA pilot study will provide robust evidence of the issues that unbundled services raise.”

Firms that wish to join the pilot scheme can contact [email protected] for more information.

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