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    Wisconsin Lawyer September 1997: Unbundling Legal Services

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    Vol. 70, No. 9, September 1997

    Mosten's Model for Unbundling
    The Maryland Experiment
    Unbundling Makes Inroads in Wisconsin

    Unbundling Legal Services

    By Dianne Molvig

    Unbundling, also called discrete task representation or limited services representation, is a practice by which a client hires an attorney to perform only specified tasks agreed upon beforehand by both attorney and client. The concept is not new, but it has received more attention lately for a couple of reasons.

    Similar to ordering
    a la carte, unbundling allows clients to choose from a menu the services attorneys provide.

    Divergent trends are afoot in the legal profession. On the one hand, a growing number of people choose to not hire an attorney when they have a legal problem. Some think they can't afford a lawyer. Some prefer to maintain control over their legal affairs, feeling that lawyers merely complicate matters and fuel the adversarial fires. Others simply aren't content to be passive recipients; they prefer active engagement.

    Whatever the reasons, statistics show that more and more people opt for self-representation when they go to court. For instance, pro se divorce litigants nearly doubled (rising from 24 percent to 47 percent) in Arizona's Maricopa County from 1980 to 1985, according to a 1993 study by the American Bar Association. The Oregon Task Force on Family Law reports similar results in that state's courts, with neither party having a lawyer in 40 percent of family law case filings.

    But although pro se litigants save attorney fees, all too often they give away their legal rights without realizing it. The Maricopa County study showed that, compared to lawyer-represented clients, pro se litigants obtained lower child and spousal support, received tax advice less often, made less use of temporary orders and weren't as informed about alternative dispute resolution options.

    A second trend also is in motion: lawyers' unemployment and underemployment. New attorneys have a harder time landing their first job; established lawyers survey their tougher competition and wonder whether their client stream will continue to flow adequately.

    The irony of the situation is clear: More people aren't hiring attorneys, often hurting themselves in the process, while attorneys need more work. Can anything be done to bring these two tendencies into alignment? Many attorneys think something can be done - if a few innovations, like unbundling, work their way into the practice of law.

    Think of unbundling as a la carte versus the traditional full-service menu. For instance, a client might enlist a lawyer for help in preparing forms and pleadings, but the client files the documents and appears in court pro se. Or, a client hires an attorney for representation in the courtroom, but does discovery and negotiations without the lawyer.

    "In unbundling, clients have a substantive role, which makes them feel more confident that they're part of the process," says Louise Trubek, clinical professor of law at the U.W. Law School. "They're not just turning everything over to some lawyer who'll do whatever he or she wants. Unbundling also reduces costs because lawyers make clear exactly what they intend to do and what they will charge for it."

    "This is giving a new label to something that's existed for a long time," points out William Hornsby, staff counsel to the ABA's Standing Committee on the Delivery of Legal Services. "If you mention unbundling to transactional business lawyers, they scratch their heads and say, 'What's new?' For example, when someone comes in who wants to start a new business, a transactional business lawyer will present a menu of what needs to be done, but won't do every bit of the work for the client."

    Opportunities and obstacles

    Other lawyers, too, without calling it unbundling, may recognize it as a practice they have long used to some degree. Now that the concept bears a name - thanks to Los Angeles lawyer Forrest Mosten, who's widely regarded as a trailblazer in unbundled legal services in this country - it's getting serious attention. Many observers think unbundling is an idea whose time has come, for the benefit of both clients and lawyers.

    "If you look at the economics of the legal profession," Hornsby says, "it defies the theory of supply and demand. We have demonstrated over and over again that there is a demand for affordable legal services by low- and moderate-income people. But lawyers have demonstrated over and over again an unwillingness to structure their practices in such a way that they can meet those needs."

    "We shouldn't blindly embrace unbundling," Hornsby adds, "but we need to examine its worth. If we give it scrutiny, then the legal profession may be able to position itself to be responsive to consumer needs. Otherwise lawyers will lose out. People will turn to other alternatives: to self-help books; to nonlawyers who provide information even under the threat of unauthorized practice of law; and to bankers, accountants, financial planners and the array of support people who will fill the consumer void."

    While unbundling offers answers to current dilemmas in the legal profession, it also raises questions. For one, many lawyers worry about boosting their malpractice risks when they perform only the parts of a job the client asks them to do. If something goes awry because of a bad client decision, lawyers fear they'll end up the scapegoats - and the subjects of lawsuits.

    Another key finding ... highlighted the critical importance of the initial diagnostic interview
    Still, the record shows only one malpractice claim related to unbundling. That happened in 1993 in California, when a worker's compensation lawyer failed to advise a client of a potential third-party claim.

    Mosten says he's "never even come close" to a malpractice claim in an unbundled case. He traces his use of unbundling back to the early 1980s when he was practicing real estate law. The unbundling concept evolved for Mosten, until he publicly defined and described it to professional colleagues for the first time at a family law conference in Australia in 1993. One reason he thinks he's remained malpractice-free all these years is "because my fees don't get out of hand," he says. "When clients owe you a lot of money and you try to collect it, that's when most malpractice claims come up."

    Mosten reports that in the portion of his practice that involves unbundled services, his client payment rate is 92 percent, compared to 70 percent among his full-service clients. "Clients appreciate lawyers who are making themselves available to do this," he says. "They also like the fact that they're treated like adults" who can make their own decisions.

    His clients' appreciation for his services feeds into both his higher payment rate and his nonexistent malpractice rate, Mosten says. "Most studies have shown that clients don't blame lawyers for bad results," he notes. "They blame them when they haven't had their phone calls returned, or they don't feel listened to. Clients who are satisfied with the process are less likely to blame the lawyer" when a case doesn't turn out as the client wished.

    Hornsby points to another reason why he believes unbundling doesn't pose the malpractice threat many lawyers imagine. Consider that malpractice claims fall into two general categories, he explains: administrative and substantive. Administrative includes such acts as failing to file in the proper timeframe or not communicating with the client. Such problems don't exist in unbundling, Hornsby contends, because the lawyer is responsible for specific services, per the client's request, not for all the detailed tasks involved in a case. In a sense, "there's no file to screw up, no client to ignore," Hornsby says.

    Still, no one is suggesting that lawyers are off the hook. "I think unbundling highlights the need to be heads-up about your own responsibility," says Katja Kunzke of the Wisconsin Lawyers Mutual Insurance Co., Madison. "We want lawyers to do that anyway for risk management purposes. I have no problem with the client saying, 'I want you to do only these three things' out of the 11 that need to be done. But I do think it remains the lawyer's obligation to point out that these are the 11 things that need to be done. The client isn't going to know that."

    As for substantive malpractice, Hornsby believes the risks diminish here, too, because a lawyer providing unbundled services will tend to deal with many of the same legal issues again and again. He compares it to what lawyers discover when they staff their local bar association hot lines. "What we hear from those people is that it's amazing how many times they answer the same question," Hornsby says. He feels the same thing occurs in a high-volume, unbundled legal practice. "The result is greater competence," he notes, "and the ability to avoid malpractice."

    "The bottom line," Hornsby adds, "is if you're worried about malpractice, don't practice law. The breeding ground for malpractice is the traditional storefront law office, not the unbundled practice."

    New rules for a new game

    Despite the assurances that unbundling is no more malpractice-prone than conventional law practice, and maybe less so, and that there's only one known malpractice claim on record in unbundled cases, lawyers still view unbundling nervously. And for good reason. "Lawyers are notoriously conservative, and I don't mean politically," says William Howe, a lawyer in Portland, Ore. "Our job is to ask the 'what if' questions. That's so ingrained in us that in a way, to be a good lawyer is to be a professional paranoid. But that is not helpful when considering new practices."

    Assuaging qualms about malpractice risks is key to wider acceptance of unbundling among lawyers. Toward that end, Howe and others propose a solution: using a written agreement. "This is a very strict fee agreement that clearly spells out whose job is what," Howe explains.

    But suppose the client doesn't ask the attorney to do something that, with hindsight, should have been done to help a case? That is a risk, Howe acknowledges. "But I think the thing lawyers miss is that we're all unbundling now," he points out. "Very few people have enough money to pay for all the legal services they could use in a case. So we do less discovery than would be required to turn over every single rock. We hit the high points. We tell the client that if we had unlimited funds, we'd talk to these other three people, but chances are it's not going to make any difference. So unbundling is just a way to be honest and get out on the table what we do in a limited sense now, and to do it in a more organized way."

    Besides written agreements, other actions could minimize malpractice claims. State statutes could be changed to grant civil immunity to unbundling lawyers for not performing tasks not specified in the written agreement signed by the client. Oregon is taking another tack. Attorneys there all have malpractice coverage through their self-insured professional liability fund. Changes in the policy may be forthcoming to cover unbundled law practice. This will be one issue examined in the next two years by a new task force, just created by the Oregon Legislature in early July 1997, to study pro se representation.

    "A big part of the job of that task force," says Howe, who is one of its 11 members, "is to put unbundling on the radar screen in a big way, and to promote that as a significant part of the solution to the self-represented issue."

    Besides liability questions, the task force will look at ethical quandaries. For instance, scripting is a controversial issue. A lawyer offering unbundled services may take on the sole task of coaching a client to talk to the opposing party. If the latter is represented by counsel, is this a violation of the lawyer's responsibility to not communicate indirectly with a represented party?

    Ghostwriting is another thorny question. A lawyer might prepare a pleading or other written document for a client, but not represent that client in court. Is this a fraud on the court, who believes that the client is pro se and therefore may make certain allowances because the client is an amateur? Colorado Federal District Judge John Kane believed it was in a 1994 ruling, in which he stated: "Having a litigant appear to be pro se where in truth an attorney is authoring pleadings and necessarily guiding the course of the litigation with an unseen hand is ingenuous to say the least; it is far below the level of candor which must be met by members of the bar."

    But proponents say ethical questions such as these few for illustrative purposes have solutions. The scripting issue could be handled by appropriate changes in ethics rules. Concerns about ghostwriting could be addressed by having attorneys sign disclosure statements when they prepare written documents for clients who appear pro se in court. Indeed, solutions may be fairly uncomplicated, although one would expect them to vary by jurisdiction.

    Moving ahead, slowly

    Practicing attorneys aren't the only ones interested in removing some of the hurdles facing unbundling. "We have many judges who are very much behind us on this," Howe says of the Oregon initiative to further unbundling. "The current chaos that reigns as a result of 40 percent of the people having no lawyer [in family law filings] is making the judges grow weary. They're real interested in some kind of change."

    In Maricopa County, Ariz., Judge Rebecca Albrecht says that unbundled legal services already are available to pro se litigants through the courthouse Self-Service Center, which she helped create two years ago. People who use the Self-Service Center can consult a list of local lawyers willing to provide unbundled services. Not only does this help pro se litigants, notes Albrecht, but it's a boon to overburdened courts. "From my perspective," she notes, "the better prepared any litigant is who comes into the courtroom, the better off I am in trying to make an adequate decision. Also, if they're prepared, I don't have to reset a hearing. So people don't have to keep coming back, which is a drain on my time and theirs."

    Will unbundling prove to be a new wave in law practice that bodes well for clients, attorneys and the courts? Or will it be a passing phenomenon that proves to be too problematic? Surely the debate amongst the various players is far from over.

    Perhaps two key points need to set the tone for that debate. First, unbundling is not a panacea. "Clients and lawyers both have to understand the limits," Albrecht points out. "The client needs to understand that if you don't give the lawyer all the information needed, you're not going to have a good outcome. And the lawyer has to be sure to cover all the questions that need to be asked in order to give good legal advice."

    Second, although unbundling must receive lawyers' best scrutiny, the discussion over its merits and pitfalls needs to be solution-oriented. "Lawyers are trained to look for problems; they're not taught to focus on solutions," Mosten says. "I think the debate over unbundling should first look at where the need is, why this is important and then find ways for it to happen - as opposed to focusing on all the reasons it's not. It's a different way to approach this."

    Meanwhile, as legal professionals continue to air the pros and cons, lawyers in various parts of the country are moving ahead. For instance, when Oregon created its new commission to evaluate unbundling and other ways to help pro se litigants, the idea was to "get this rolling to top speed in a couple years, rather than in 10 to 15 years," Howe says.

    "But unbundling is going to take off," Howe adds, "whether or not this commission even existed. Unbundling is slowly starting. But I think of it as a train that's already left the station."

    Dianne Molvig operates Access Information Service, a Madison research, writing and editing service. She is a frequent contributor to area publications.


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