From the SLCC: the key role terms of engagement can play in a firm's risk management regime

Earlier this year the Scottish Legal Complaints Commission (SLCC) issued revised guidance to practitioners on how best to avoid the major issues which often lead to complaints.

When out speaking to groups of solicitors, as I often do, this subject frequently arises, possibly more so now that annual CPD must include risk management-related training – a focus to be welcomed.

It’s no surprise that complaints can create considerable risk to legal businesses. A series of upheld complaints could seriously impact on the bottom line in terms of compensation payouts – and on next year’s indemnity insurance premiums.

There are also wider risks. Word of mouth is still one of the main sources of new work: new clients are often family or friends of existing clients. That is great when things are going well,

but not when things go less well. In small communities, in particular, complaints can prove a significant risk to a firm’s reputation which, at the extreme end, can be catastrophic.

Similarly, increasing use of social media means it does not take too long – or regrettably, sometimes, too much thought – to set off a disgruntled anti-firm campaign which can be difficult to contain.  

Arguably, upheld and published conduct complaints are more likely to pose a risk to a firm than complaints about services. However, service complaints also carry potentially serious risks, and the distinction between conduct and service is not always clear, particularly from the perspective of the client (or prospective client).

It makes sense, therefore, that ways to mitigate against the risk of service complaints should be given serious consideration.

Starting off on good terms

One of the best ways of ensuring that clients’ expectations as to service levels can be met, if not exceeded, is by giving them as much key information as possible at the outset.

In saying that, there is an immediate caveat that the more comprehensive the terms of engagement, the less likely they are to be read. Is there an inherent anomaly?

Clearly there needs to be a balancing act between provision of detail on the one hand with crafting something which is readable on the other. A colleague takes the view that it is a science; I tend to think of it as more of an art form. In any event, it’s not impossible to get the balance right, and some firms do a very good job of it.

Many of the service complaints we see could have been avoided by carefully crafted terms of engagement, tailored to the individual client.

The Law Society of Scotland’s rules and guidance cover the content in some detail. In addition the Society, and Master Policy brokers Lockton, are about to publish a comprehensive guide covering risk management related to terms of engagement – themes around costs, timescales, scope of work, signposting to the SLCC in case of dissatisfaction, chime loudly with our own experience. We are grateful for the opportunity to comment on the draft.

However, from looking at more than 10,000 complaints, what other things might we suggest you consider including in your terms of engagement?

  • Is there any aspect of the work which the firm will not be covering? It’s all too easy for the client to mention something at that initial meeting – like a tax issue – and then forget that you said your firm doesn’t cover that.
  • Who will the client deal with, or hear from, on a day-to-day basis? The client may have struck a good rapport with you at the first meeting, and then feel let down by a letter from a paralegal – that may not feel like the level of service they signed up for.
  • How often will you update the client? It’s important to make clear at the outset, as far as you can, how frequently the client can expect updates.
  • How will you communicate? Will it be mainly/solely by email? Some firms even communicate by text.
  • Do you need to make any reasonable adjustments? If the client has a disability, or is in some other way potentially vulnerable, you may need to address that up front.
  • Contact details. Have you stressed the importance of the client keeping you up to date with their contact details – including mobile number?

But, perhaps most importantly:

  • Has the client fully taken in what you have said? Legal services are generally a distress purchase and the client may not be in a good state of mind to take on important information, especially at that initial meeting. And a perceived power imbalance can deter the client from asking questions for fear of appearing stupid. Poor communication underlies the majority of our complaints. So, if you are in any doubt about whether the client has understood something critical, why not cover that (and yourself) in writing too?

As I always say, none of this is rocket science. It’s also not a cure-all. Ongoing expectation management, clear communications and accurate file recording are other equally important contents of your complaint-prevention risk management toolbag.

However, getting things like these set out from the start, in your terms of engagement, can avoid a number of the scenarios which we see leading to complaints.

The Author
David Buchanan-Cook is head of Strategic Insight at the Scottish Legal Complaints Commission
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