Thu 13 Oct 2016

Supporting Families Through Change: Unbundled Legal Services Project Part 5

Posted by Guest.Author

In this post we will explore their experience with financial arrangements for unbundled services, their satisfaction with those services and their suggestions for change.

In Part 4 of this series on unbundled legal services, we explored the survey responses about unbundling from members of the public who have encountered legal issues related to their separation and divorce.   We dealt with their experience with accessibility and use of unbundled legal services in general and in mediation. The formal summary of survey results can be found here.

Financial Arrangements

Consistent with the responses of lawyers, the vast majority of financial arrangements were based on the hourly rate method (regular rate, discounted rate or some combination).  Flat fee options were used in a minority of situations including the following:

“I paid a flat fee plus I put together the Binder and had the lawyer fact check the information and she presented in Court for 30 minutes.”

Research[1] shows that people seeking legal services value affordability, control over price and predictability of cost.  Interestingly, 50% of family respondents to this survey reported that in hindsight the unbundled services they received were somewhat or very affordable (compared to their perception at the time of the retainer: 35%).

Despite this finding, however, the hourly billing method is unlikely to meet any of these criteria without some clearly negotiated boundaries.  People with a limited budget do not prefer an open-ended fee arrangement, particularly with hourly rates in the $250 - $500 range.

One respondent commented:

“Even with a discounted rate, and even though I did a lot of work on my own, the amounts added up.  I ended up spending $20,000 on legal fees, in the course of a year.  It easily would have been $100,000 without these arrangements.”

Many lawyers are experimenting with flat fees and implementing them on a variety of unbundled tasks.  For example, lawyers we interviewed commonly offer a flat fee for the initial consultation meeting (usually with a fixed time) which works well for them and their client. There are also a myriad of other creative fee arrangements that could be used to advantage for unbundled legal services.  Innovative firms in Canada and in the U.S. are already developing new approaches to pricing that create a viable revenue stream and keep costs to a reasonable level for their clients.  It seems that there is significant room for innovation in this area as well and this project will consider options as part of its exploration of alternative business models.

Client Satisfaction with Unbundling

71% of respondents said they were likely or very likely to seek unbundled legal services for a future family dispute.  They particularly appreciated the lower cost and the ability to be more in control of their own legal matter.  Most were extremely grateful for the services provided by their unbundled lawyer.

“I wish I knew about this option much much earlier.  Too much money was spent in the first part of my divorce (a year’s salary approximately).”

“In hindsight, I was so lucky to have access to these services.  I would not have been able to afford it otherwise.”

The results of this survey support the conclusion that many families want and could benefit from unbundled legal services. Those who used them found them extremely valuable and would use them again in future. There is likely still a large group of people who do not yet know that these services are available and would jump at the chance to use this approach if they could. Studies refer to a large population of people who have an “unmet need for legal services” particularly in the family area.  These people have legal needs but no “real” access to a lawyer or paralegal and constitute a potential “untapped market” for well-designed and affordable legal services.

Survey respondents provided a long list of suggestions for system improvement (see the summary here).  Of particular importance to them were access to legal information, to out-of-court options including mediation and to affordable legal services.  They called for more unbundled services, rules making it mandatory for lawyers to explain unbundling as an option and more online information about unbundling.

This project (and the aligned A2JBC initiative) are focusing on increasing the number of BC family lawyers who offer unbundled legal services and making a list of these lawyers available to the public online and through other means.  We are collaborating with the National Self-Represented Litigant Project who are about to launch a national database of unbundling lawyers.

Closing Comments

The next post in this series will discuss the responses of family mediators (both private mediators and family justice counsellors) to unbundled legal services.

Information about the BC Family Unbundled Legal Services project can be found here.  Summaries of the responses to all three surveys are posted on that page.

Mediate BC is enormously grateful to the lawyers, mediators and members of the public who participated in these surveys – thank you!  The information was really helpful.  Stay tuned for more information.

Posted by Kari Boyle, Unbundled Legal Services Project Manager

[1] Including the report of the National Self-Represented Litigants Project (2013).  Executive summary here:  https://representingyourselfcanada.files.wordpress.com/2014/06/executive-summary.pdf