Vetting and engagement issues that arise when considering, taking on and handling private client work

Client and transaction vetting are important components in the engagement process for taking on any prospective client and any kind of work. Some of the most recent issues which have arisen concern private clients and private client work.

Urgent business

Some solicitors may find it hard to resist taking on new clients or new transactions for existing clients, even against their better judgment. Yet how many times have you heard a solicitor say: “I wish I had never taken on that client/that piece of work”? Sometimes you just have to say “No”, but some of us may find that hard to say to a client or a prospective client. How should a decision to take on a new client or a new piece of work be made? While risk awareness, intuition and experience may play an important part in making that decision, having a set of criteria for vetting new clients and new business helps ensure that a consistent approach is adopted and reduce the risk that you will come to regret a decision to accept an instruction. Consider this case study.

You receive an email from a Mr Glitch in which he says you come highly recommended by a friend who is one of your clients. Mr Glitch asks you to prepare a power of attorney for him to sign to enable his son to deal with his affairs while he is on a six months voluntary service placement overseas. As he departs tomorrow, Mr Glitch asks if you can email the document to him straight away with instructions on what he has to do to make the appointment effective.

Would you consider acting for Mr Glitch? Many might intuitively decline to act on the basis that there is too much to do and not enough time to do it in. If you are inclined to help Mr Glitch, what are the risk management issues that require to be addressed?

This appears not to be an established client of the firm. The critical vetting issues include:

  • Identification – how do you carry out the necessary anti-money laundering checks if all contact with Mr Glitch is by email/phone?
  • Timescale – is it feasible to meet Mr Glitch’s requirements within his timescale, considering the practicalities of verifying his identity; arranging a meeting to take his instructions; issuing terms of engagement; giving appropriate advice (but can you restrict the scope of work in terms of engagement so that an “execution only” service is being provided?); recording that advice in writing; and/or having the document signed?

Managing clients’ expectations

Failure to ascertain, and then manage, the client’s expectations is a frequent cause of complaints/claims against solicitors. Where does it seem Swift & Co have gone wrong in the following case study? What could they have done better?

Swift & Co had acted for Mr Bigg for several years. An extremely demanding client, he produced regular work for Swifts’ commercial team. When Mr Bigg’s aunt died, the client partner promptly introduced one of his trust and executry colleagues, assuring Mr Bigg that his aunt’s estate was in good hands. The client partner was shocked when, months later, he received an email from Mr Biggs with a veritable tirade about the length of time it was taking to wind up his aunt’s estate. The email concluded: “If it takes the firm six months to wind up a simple estate, I have to question the firm’s ability to handle my other business properly”.

Clearly Mr Bigg had his own expectations about the timescale involved in handling a small executry. He is not unique. Many clients have their own ideas about how long it should take for a solicitor to carry out a transaction, case or piece of work. Yet Swift & Co appear not to have ascertained Mr Bigg’s expectations regarding timescale. Again, they are not unique. The engagement process is an ideal opportunity to manage the client and his expectations. Yet some solicitors continue to miss that opportunity, as shown by a recent survey of the profession where 17% of respondents said that they did not mention timescales (“how long will this take?”) at all in their terms of engagement.

Scope of engagement

Problems can arise where the scope of the work, and any exclusions, limitations and qualifications, is not set out properly in terms of engagement, as in the following case study.

Mr A writes to complain that B & Co mishandled the estate of his late uncle Mr C. On further investigation, you ascertain that Mr A’s dissatisfaction is down to his belief that his uncle was never given advice on IHT planning. The will had been prepared by the firm’s former senior partner. It appears from the file that Mr C had been adamant that he only wanted the will drafted and didn’t want “complicated advice that lawyers could charge more fees for”.

Mr A is also arguing that the firm ought to have made it clear to his late uncle that, while there might be scope for mitigating inheritance tax on his estate, the firm was not being asked to consider tax planning and therefore no tax planning advice was being given. Mr A is a client of the firm in his own right and when the firm prepared a will for him, he received a letter stating “You have advised that you do not require us to consider and advise on any scope for mitigating the impact of inheritance tax on your estate”.

The problems in this case arose from the fact that the firm never made it clear whether tax planning advice was included in or excluded from the scope of the engagement. Moreover, any arguments in their favour could be weakened by their inconsistent approach to scoping engagements.

Capability and capacity

Consider the following case study.

Your corporate/commercial colleagues want to assure certain clients that the firm can produce all the documentation required to set up various trusts into which substantial shareholdings are to be transferred.

What are the engagement and terms of engagement issues to be addressed here? Clearly the clients’ expectations in terms of result, timescale, service and cost, and the scope of the work, should be considered. In addition, in some cases, the nature of the work and the firm’s experience in undertaking that work may be an issue. Assuming the firm is confident that this is work which it is within the capability of the firm to handle, how will the clients’ expectations be managed? That question may be answered by making a determination, bearing the clients’ requirements in mind, of how and when the work will be carried out and by whom. That determination may require an assessment of the availability of skills required to carry out the work, current and prospective workloads of fee earners, and any possible requirement for supervision of fee-earners.


Your client vetting or risk assessment of a prospective client or a new piece of work may lead to a decision to decline the instruction. If you decide that you are not prepared to take on a prospective client or a new piece of business, it may be advisable to issue a letter of “non-engagement”. This may seem a stange idea but it can provide protection for the solicitor. For example:

A prospective client has a meeting with a solicitor about a personal injury claim in which, it transpires, the triennium will expire in a few days. The solicitor is not willing to take the case and informs the prospective client accordingly. Some time later, the solicitor is surprised when that person intimates a claim alleging that he can no longer pursue the personal injury action owing to the solicitor’s failure to raise an action following the meeting.

If you were faced with this situation, would you prefer your defence to be based on your memory, a file note of the meeting, or a letter of “non-engagement”?

A letter of “non-engagement” may also protect you in certain multi-party situations. You may be clear that you are only acting for Mr and Mrs A and not their daughter, Miss B, in a family-funded purchase transaction. However, Miss B, whether reasonably or unreasonably, may believe that you are protecting her interests as well as those of her parents. A letter of “non-engagement” sent to Miss B to make it clear that you are not acting for her and that she should take her own legal advice on the transaction, should pre-empt any possible misunderstandings and future problems.

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