Written agreements are crucial when managing client expectations

This column has previously discussed the importance of good communication in providing legal advice and, more particularly, the good practice of following up in writing to avoid complaints and ensure good customer service. However, what happens if the retainer itself governing the advice is not set out in writing?

The position before outcomes-focused regulation, introduced on 6 October 2011, was very clear. The Solicitors' Code of Conduct 2007 set out the lawyer's obligations at the point of instruction and throughout the course of the retainer. The lawyer would be required to set out in writing the agreed appropriate level of service, identify the client's objectives, outline the available options and agree the next steps. The requirements and guidance notes were specific and detailed. The outcomes-focused approach since the SRA Code of Conduct 2011 is not as black and white.

The code of conduct sets out broad outcomes with "indicative behaviours" which prove compliance or non-compliance with that particular outcome. It is up to the lawyer to consider how best to achieve the right outcomes for their clients taking into account the way that their firm works and its client base. There is no express requirement therein for anything to be in writing aside from the requirement to provide clients with your firm's complaints procedure.

While this is procedure, one recent case arising from a law firm advising the administrators of a company, has brought this matter to the fore. The law firm involved successfully defended a court application to assess its invoices issued during the course of the administration. While the law firm was successful, the court was however critical of the law firm for its lack of documentation confirming the instruction, or written evidence of agreement over the terms of the retainer.

One message arising from this case is a reminder that, whether this is a new client or a repeat client, lawyers must still be able to evidence the terms of their engagement or run the risk of wasting valuable time, money and energy arguing over what was agreed at the outset and throughout the retainer. Drafting terms of engagement can be laborious and time consuming. The resulting document can often be long winded and lawyers often feel that the client may not be inclined to read it as a result.

That said, as discussed above, this is an important document; not only is this your opportunity to set out the terms and conditions of your retainer thus protecting your firm's position in the event of a dispute, but it also sets out the scope of the service you are providing so that your client understands the parameters of the relationship. So, although the terms of engagement will protect your position (which serves to save time and costs in the event there is a misunderstanding later on) crucially, the client is more likely to be satisfied with the service it receives as expectations will have been properly set and maintained. In a service industry such as the law the latter is clearly paramount. SJ