Sticking to a Budget for Dispute Resolution

Two of the most common complaints against lawyers are inadequate reporting or communication and overcharging. A product being demonstrated at LawFest last week – LawVu’s cloud based portal – seemed to offer a tidy fix for both these issues.

Staying within a budget has not typically been a big emphasis for litigation work. The reason generally offered is that it is too hard to quote accurately the outset: too much depends on the other parties’ conduct and the potential for unforeseen skirmishes en route. The lack of certainty around fees is however a big problem for the client who has finite resources or, even if they don’t, will probably want to spend a finite and known amount. The client will usually approach the problem with some expectations about both time and money they want to invest in solving their problem. Those expectations may not match their lawyer’s and there is potential for a great deal to go wrong in the relationship as a result. A client, having spent what they intended to spend, may feel unable to do anything other than double down and bet on a win. That is likely to place a strain on everyone. Others may decide they simply cannot afford to go on and carry on their case without legal assistance. As I found in my study of litigants in person (LiPs), one of the key drivers of the decision to continue without legal assistance was this gap in communication:

… LiPs were influenced by the differences between the legal fees indicated and the fees charged, for example a discrepancy of $20,000. This made these LiPs unsure of whether they could afford representation. This factor was common where the LiP had originally engaged counsel with a particular budget in mind, but exhausted that budget without reaching a resolution of the matter.

It was with this in mind that I was pretty excited to see a demonstration of LawVu’s product. The product is being marketed to law firms and in-house counsel as a cloud based portal for managing legal matters. What I liked about it (other than being aesthetically pleasing) is that it offers a very transparent method for managing a matter. Everyone (including a client) can log-on and see what the objectives are and who is doing what. Strikingly, there is a prominent budget field which gives the dollar amount set for the task. Using software like this to manage litigation matters seems to me to hold the promise of a way to both reduce problems with inadequate reporting or communication and complaints about overcharging.

While it is not being marketed in this way, I also thought it had great potential for lawyers wanting to offer limited retainers (aka unbundled services). It offers a quick and easy way to keep everyone on the same page about what the lawyer is responsible for and what the litigant is going to do. It updates and automatically generates a retainer letter with the amended instructions. These features would go a long way towards answering two of the concerns that lawyers have about offering unbundled services. These, as I have previously discussed, are:

  • [unbundled services have] low monetary rewards and high costs – lawyers paid for an “hour of your time” spent additional time recording the advice (to protect against future claims of incorrect advice) and time recording the retainer;

  • difficulty accurately recording the limits of the retainer and having to be mindful of updating the retainer when the client returned for further assistance

I’d be very interested in talking to anyone who wants to use it for unbundled services to see what they think or if there is another product out there with this capability. I will also be discussing this issue in an upcoming New Zealand Law Society Webinar, so lawyers please sign up and share your thoughts.