The Ethics of Unbundling

Vol. 1, No. 3

 

Stephanie L. Kimbro, MA, JD, has operated a web-based virtual law office in North Carolina since 2006 and delivers estate planning to clients online. She is the author of Virtual Law Practice: How to Deliver Legal Services Online (ABA/LPM Publishing, Oct. 2010) and a free ebook, Serving the DIY Client: A Guide to Unbundling Legal Services for the Private Practitioner, April 2010. Kimbro is the 2009 recipient of the ABA Keane Award for Excellence in eLawyering. In addition to her virtual law practice, she consults on technology and the online delivery of legal services. She writes about ethics and technology issues in delivering legal services on her blog, VirtualLawPractice.org.

 

When a law firm decides to unbundle legal services, it breaks down tasks associated with a legal problem and provides specific, limited legal representation to address part of a case. Unbundling benefits clients by providing them with what they want: affordable, skilled, and limited legal assistance. Some family law practices are beginning to integrate virtual law offices into their traditional firm structures to provide online, unbundled legal services.

They are finding that family law firms are in a unique position to meet the needs of this expanding pool of clients in a cost-effective and ethical way that enhances the law firm’s bottom line and increases its competitiveness in a fast-changing legal landscape.

Courts also are looking to unbundled legal services to provide an affordable way for huge numbers of pro se litigants to receive the guidance they need to navigate the justice system. However, for all the benefits of unbundling, there also are precautions that must be taken. Any law firm considering limited-scope legal services must avoid malpractice and ensure compliance with state bar rules and regulations.

 

The Legal Market

The reality of our current legal marketplace is that individuals who might otherwise have consulted with a traditional law firm are turning to online companies, such as LegalZoom, Nolo, Inc., and USLegal, for family law services, particularly no-fault divorce and name changes. These individuals appear to be comfortable handling some of the footwork of their own legal matters in exchange for lower legal fees, regardless of the many risks associated with preparing online legal documents without a lawyer. Although it is not clear how many prospective family law clients are being lost to online legal services, we do know that LegalZoom has served thousands of clients in the past few years and earned millions in revenue from the sale of form-generated legal documents. In addition, some nonprofit organizations and state courts have stepped in to provide pro se individuals with online forms and legal guidance to facilitate unbundled services.

 

What Are Unbundled Legal Services?

Unbundled legal services should not be confused with automated legal-document assembly or blank legal forms for sale. Unbundling requires the lawyer to guide the client through the limited legal process and instruct the client on handling certain tasks without the lawyer being involved in all aspects of the legal matter. For example, the client might execute and file a document at the courthouse or attend a hearing alone after the attorney has prepared the document and provided prehearing counseling.

Some family law services that might be unbundled include the drafting of a petition or response, responses to motions, or limited court appearances. Because the firm is eliminating expenses related to portions of the legal work, fees are reduced. The practice of unbundling is not appropriate for every client or every legal problem. However, when handled correctly, the practice provides greater access to justice for individuals who otherwise might not seek full-service legal representation.

 

The Ethics of Unbundling

Because of its potential to improve access to justice, unbundling has earned the support of the ABA and many state bars. However, they warn of precautions law firms must take to ethically provide these services. The rules of professional conduct for many state bars will permit an attorney to limit the scope of representation if the limits are reasonable under the circumstances of the case. The attorney must provide competent and thorough representation, regardless of the nature of the legal assistance. Of particular concern is the thoroughness and preparation of unbundled legal services, especially if the attorney provides these online through a virtual law office or other portal, never meeting the client face-to-face. Regardless of the method of delivery, unbundling should never result in an inferior quality of service or lesser standard of practice.

The first step to providing ethical unbundled legal services is for the law firm to determine on a case-by-case basis whether the individual client’s legal needs may be unbundled or whether the matter requires full-service representation. Is the limitation reasonable? Will the client consent to limited representation? There are clearly some matters that should not be unbundled. For example, a complex child custody case may not be a good candidate for unbundling. The client will likely need a skilled, experienced attorney who can advocate the client’s best interests throughout the process, rather than undertaking isolated tasks. Some state bars have gone so far as to specify that certain practice areas, in particular, criminal defense cases, may not be handled as limited-scope representation. The law firm bears the responsibility of determining on a case-by-case basis whether unbundling is appropriate.

The key to ethically providing unbundled legal services begins with a clear definition of the legal services to be provided, in addition to the services that will not be covered during the representation. To illustrate this to the client, an attorney might compare services the client is requesting with full-services legal representation in a divorce and child custody matter. If the client decides to move forward, counsel should put this comparison in a written limited-services agreement and have the client sign to acknowledge an understanding of the differences. In a separate section, have the client sign or initial his or her acceptance of responsibility for all other matters required for completion of the legal matter. This clarifies in writing the responsibilities of both law firm and client throughout the limited-scope matter.

 

Detail Client’s Responsibilities

One way to guard against malpractice is adequately to inform the clients of potential risks in limiting legal services. Though the attorney will be responsible for his or her conduct during the course of the limited relationship, the client must understand the aspects for which he or she will be responsible after the attorney steps away from the case. It is the lawyer’s duty to instruct the client about the legal process and counsel the client on making educated decisions after the representation has ceased. The guidance and assistance must be thorough and include specific, detailed instructions as to tasks the client must complete in the legal matter.

When a lawyer ghostwrites a legal pleading for a client, disclosure is at issue. Some jurisdictions specifically require an attorney to make both opposing counsel and the court aware of the lawyer’s authorship by disclosing it on the face of the document. This relates to preserving fairness during presentations to the court as pro se litigants generally are provided leniency in filing documents and appearing before the court, in acknowledgement of their lack of legal education. Although in most cases the court will clearly discern whether a lawyer has assisted in the drafting of a document, the best practice is generally disclosure of authorship without making a formal appearance in the case. (See a recent opinion on ghostwriting and attorney disclosure from the USDC Northern District of Illinois, Thigpen v. Banas, filed Feb. 11, 2010 at http://www.abisoft.org/opinions/2010/1_08-cv-04820_20100211.pdf.

Likewise, an attorney who is tempted to ghostwrite a legal document of a lesser caliber than those created for full-service clients should decline limited representation of pro se litigants and refer their cases elsewhere. Any attorney must decline representation if the drafted document is not legal or ethical for the client to execute. It is important for the client to understand both the nature of the lawyer’s limited-scope representation in ghostwriting the legal pleading and the requirement that the lawyer disclose authorship to the court. An attorney who fails to notify a client about the duty to disclose risks an ethical conflict in protecting client confidentiality and acknowledging authorship to the court.

 

Know Your Clients

Some practice areas naturally lend themselves to unbundling. For example, a more transaction-based practice, such as estate planning or family law, may more easily be unbundled than a criminal defense practice in which the attorney is expected to provide ongoing, full-service representation. Knowing whether your firm’s clients are sophisticated enough to handle some of the footwork of their cases is an important consideration for the firm. If a client’s needs would be better suited to full-service representation, then the firm must provide full-service representation or refer the client elsewhere.

 

Step-by-Step Unbundling

Before launching your firm into the unbundled marketplace, consider the following steps.

 

  • Check your state bar rules of professional conduct. Consult your state bar rules and regulations related to unbundling. They may include, for example, restrictions or requirements such as disclosure of authorship on filed pleadings. (For a sample of online state bar ethics opinions related to unbundling legal services, see below.)
  • Establish a plan for unbundling. Analyze the services you currently provide and draft a detailed limited-scope agreement. Your firm may want to provide unbundled legal services to clients online through a secure virtual law office in addition to your firm’s full-service, in-person representation. Alternatively, your firm may want to consider expanding its practice areas by offering an unbundled service, such as drafting simple wills or powers of attorney or handling a small business formation, alongside established family law services. Another option is to offer pro bono unbundled legal services as your firm’s contribution to community access to justice. There are many ways to integrate unbundling into a family law practice.

Consider the following questions as you analyze whether unbundling is right for your firm.

 

  • Which firm services may be broken down safely and effectively for clients?
  • Which new services might appeal to your clients as an unbundled offering? For example, your family law firm might unbundle no-contest divorce services and some basic estate planning document creation for clients while still providing full-service representation on other family law matters.
  • For what type of clients would unbundling be cost-effective and efficient both for the firm and the client?
  • Can your clients handle the footwork that unbundling requires or do they need full-service representation? Although this should be determined for prospective limited-scope clients on a case-by-case basis, some areas of representation clearly require full-service representation in all instances.
  • How could your firm use technology to streamline the process of unbundling? Some virtual law practices use technology to provide checks and standardized processes to avoid malpractice when unbundling legal services for clients online.

 

A Limited Legal-Services Agreement

After determining how your firm will unbundle legal services in its practice, the next step is to draft a standard limited legal-services agreement. In this agreement, clearly define the nature of unbundled legal services in general and then the specific scope of representation for limited-scope clients. These provisions could be integrated into your existing engagement agreement. Be clear about which services and which specific steps within those services will be provided. Even more important, list the services that will not be provided and put in writing tasks the client must complete in the legal matter.

 

Adhere to Best Practices

Evaluate each prospective client’s matter to determine if parts of it may be unbundled. If the case requires full-service representation and the client insists on unbundling the matter, decline the case and explain clearly in writing why you are unable to provide limited representation. Having a record of your refusal to represent the individual may be important later if he or she proceeds with pro se representation and claims that you agreed to provide some assistance. Although these are basic best-practice rules that apply to any law firm, they are especially important for a practice that is unbundling services.

Another important measure for mitigating risks in unbundling is to keep good records of not only documents drafted and provided to the client, but also of guidance or instructions. For example, provide a handout with detailed step-by-step explanations for execution and filing of a legal document you provided to the client. These instructions should clearly detail the client’s responsibilities so that later there can be no question that you adequately instructed the client on how to proceed through completion of the legal matter.

Even though streamlining the firm’s unbundling process may be appealing, it is important to avoid rushed or incomplete advice to any client. Again, unbundled services require the same quality and conscientiousness as full-service legal representation.

Providing unbundled services for a fixed fee or according to an alternative billing structure (other than the billable hour) may help the client discern differences between full and limited services. This fixed fee may be incorporated into the limited services agreement with a detailed list of costs for services rendered. You also may find that unbundled services are easier to streamline using technology, such as document assembly and online case management tools, so that services rendered for fixed fees are efficient and cost-effective.

Conflict of interest is another issue that should not be glossed over when unbundling. To avoid malpractice, the law firm must run conflict-of-interest checks against full-service clients as well as those receiving unbundled services. In conclusion, unbundled legal services may benefit both a law firm and its clients. As the general public continues to seek more affordable, unbundled options online, law firms that step up to meet this demand, either online or in a traditional law office, will gain a competitive advantage. With basic planning and risk management, the ethical unbundling of legal services may successfully be integrated into any law practice.

 

Sidebar A

Get ABA Assistance

The ABA Standing Committee on the Delivery of Legal Services encourages lawyers to provide “unbundled” legal services and assisted pro se representation. It provides a complete index of links to state bar rules and procedures at http://apps.americanbar.org/legalservices/delivery/downloads/prose_white_paper.pdf. The Standing Committee believes unbundling is an important part of making legal services available to people who could not otherwise afford a lawyer. The website also features a white paper entitled, “An Analysis of Rules That Enable Lawyers to Serve Pro Se Litigants,” Nov. 2009, last accessed Feb. 28, 2010.

 

Sidebar B

What the ABA and State Bars Say

 

ABA’s Unbundling Resource Center: http://www.americanbar.org/groups/delivery_legal_services/resources.html.

Pro Se/Unbundling Resource Center Comprehensive Listing of Ethics Opinions Related to Unbundling:

http://www.americanbar.org/groups/delivery_legal_services/resources/pro_se_unbundling_resource_center/ethics_opinions.html

 

ABA Standing Committee on the Delivery of Legal Services white paper: “An Analysis of Rules that Enable Lawyers to Serve Pro Se Litigants,” http://apps.americanbar.org/legalservices/delivery/downloads/prose_white_paper.pdf.

 

ABA Committee on Ethics and Professional Responsibility, Formal Op. 07-446 (2007), www.abanet.org/media/youraba/200707/07-446_2007.pdf.

 

State Ethics Opinions Related to Unbundling

 

Alaska Bar Association, Ethics Opinion No. 93-1, Preparation of a Client’s Legal Pleadings in a Civil Action Without Filing an Entry of Appearance, last accessed Feb. 22, 2010, www.alaskabar.org/servlet/content/indexes_aeot__93_1.html.

 

Arizona State Bar, Opinion 05-06: Limited Scope Representation; Candor to Tribunal; Fees, issued July 2005, last accessed Feb. 22, 2010, www.myazbar.org/Ethics/opinionview.cfm?id=525.

 

California State Bar, Limited Scope Statement, issued 2009, last accessed February 22, 2010, http://calbar.ca.gov/calbar/pdfs/public-comment/2009/Limited-Scope-Statement.pdf.

 

Colorado State Bar, Opinion 101, adopted Jan. 17, 1998, addendum added Dec. 16, 2006, last accessed Feb. 22, 2010, www.cobar.org/index.cfm/ID/386/subID/1822/CETH/Ethics-Opinion-101:-Unbundled-Legal-Services,-01/17/98;-Addendum-Issued-2006.

 

District of Columbia Bar, Opinion 330, Unbundling Legal Services, adopted July 2005, last accessed Feb. 23, 2010, www.dcbar.org/for_lawyers/ethics/legal_ethics/opinions/opinion330.cfm.

 

Massachusetts Bar, Ethics Opinion No. 98-1, last accessed www.massbar.org/for-attorneys/publications/ethicsopinions/1990-1999/1998/opinion-no-98-1.

 

New Jersey Committee on the Unauthorized Practice of Law, 13 N.J.L. 1311, June 21, 2004, Opinion 40, last accessed Feb. 24, 2010, http://lawlibrary.rutgers.edu/ethics/cuap/cua40_1.html.

 

Montana State Bar Ethics Opinion No. 900409, last accessed Feb. 24, 2010, www.montanabar.org/displaycommon.cfm?an=1&subarticlenbr=103.

 

New Hampshire Bar Association Ethics Committee Practice Ethics Article, Unbundled Services—Assisting the Pro Se Litigant, May 12, 1999, last accessed Feb. 24, 2010, www.nhbar.org/pdfs/PEA5-99.pdf.

 

New Jersey Advisory Committee on Professional Ethics Opinion 713, Duties of Attorneys Providing Limited Legal Assistance or “Unbundled” Legal Services to Pro Se Litigants, 191 N.J.L.J. 302, Jan. 28, 2008, 17 N.J.L. 166, Jan. 28, 2008, last accessed Feb. 24, 2010, http://lawlibrary.rutgers.edu/ethics/acpe/acp713_1.html.

 

North Carolina 2008 Formal Ethics Opinion 3, Jan. 23, 2009, Assisting a Pro Se Litigant, last accessed Feb. 24, 2010, www.ncbar.com/ethics/ethics.asp?page=2&keywords=unbundled.

 

Utah State Bar Ethics Opinion No. 08-01, issued Apr. 8, 2008; last accessed Feb. 28, 2010, www.utahbar.org/rules_ops_pols/ethics_opinions/op_08_01.html.

 

Washington State Bar Informal Opinion 1763, issued 1997; last accessed Feb. 22, 2010, http://mcle.mywsba.org/IO/print.aspx?ID=827.

 

Published in Family Advocate, Vol. 33, No. 2 (Fall 2010), p. 27–30. © 2010 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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