New “limited scope legal representation” rule
gives solo and small firm practitioners special opportunity
to expand practice with “unbundled legal services”

38 General Practice, Solo & Small Firm Section Newsletter No. 5
(Illinois State Bar Association March 2010)

By John T. Phipps

The new Illinois Rules of Professional Conduct, which went into effect January 1, 2010, now allow “limited scope legal representation.” This is what has typically been known as “unbundled legal services.”

Under the prior rules, the standard was once a lawyer was in a case or matter, the lawyer was the lawyer in the case or matter and under the professional standards was then held to be responsible for the entire case or matter. Some lawyers with special fee agreements or special limited engagement agreements sought to limit her or his involvement in a matter, but under the rules such “unbundled services” were never formally recognized and the effectiveness of the agreement was unclear. In other words, lawyers who were “unbundling services” took the risk that in a given situation the professional standards required them to be responsible for the whole case whether they agreed to be or not.

This changed on January 1, 2010 when new Rule RPC 1.2(c) became effective. Under new RPC 1.2(c) “a lawyer may limit the scope of representation if the limitation is reasonable under the circumstances and the client gives informed consent.” This language leaves a lot open for development. The new rules do not contain any definite standards to indicate what is permitted under the rule. This is both good and bad because the vagueness allows lawyers to develop a number of ways to unbundle services in order to experiment with what clients want and determine what kind of services they can or should provide on a limited basis. Under the Rule lawyers can consult with clients about many different kinds of matters on a limited basis. Examples are advising a client how to present or defend a small-claims case, how to file a motion to modify child support when the parties are in agreement and consulting with the client who is setting up a business but wants to do their own corporate paperwork or have a lawyer review the paperwork the client has prepared. The list of potential engagements is virtually unlimited. Under the new rule a lawyer can consult with the client on a limited basis and can charge a reasonable hourly or flat fee for the limited service. This allows lawyers to provide quality legal services to a client without having to take on the responsibility for the whole matter. The basic requirement in a limited engagement is that the client must give “informed consent.” Basically, the rule means the client must sign some form of limited engagement agreement which discloses the limits. This opens up a large market for potential legal work.

One major possible problem with “unbundling” is how the courts will interpret unbundled or limited representation agreements in court matters. For example, a client might want to hire a lawyer to present their case or defend them in a small-claims case but limit the lawyer’s role to attend the hearing and either make a court presentation or advise a client as to how to represent himself or herself during the hearing. This appears to be a very straightforward situation. Historically, once a lawyers is in the case the courts hold that lawyer responsible to represent the client throughout the rest of the case. In the past, a few courts were very lenient and would let a lawyer make a limited appearance and then excuse the lawyer from further service and were the exception, because most courts tended to hold the lawyer in the case. In order to solve this problem, at the very least, local rules or practices will now need to be developed to provide guidance for judges and lawyers on how to deal with “limited engagement” court cases. Given the interests of clients in not paying more in fees than the amount in dispute and the large amount of unmet legal needs with the public’s involvement in the courts, it is critical that simple limited engagement procedures be developed so that litigants can obtain affordable legal services is smaller cases. Many clients will of course continue to have a lawyer represent them for the whole case, but there are clearly a large number of matters that do not require full representation and people who cannot afford to pay a full fee but want and need to hire lawyers to protect their interests in a court case. Court rules or procedures that allow lawyers to appear on a limited basis and effectively represent the client at the critical points in the court process benefit both the courts and the public.

Lawyers need to be aware that the new rule RPC 12(c) now permits lawyers to unbundle their services to provide what a client really needs and wants at a price that the client can afford. Whether lawyers like it or not, the public has shown that they want “limited engagement agreements” so they can buy the legal services they really want when they either can’t afford or do not want to pay for the full range of legal services that a lawyer can provide. The new rule opens this potential market because it allows solo and small firm practitioners to adopt the practices that can meet what the market wants. The reality is that limited representation is a client-driven market that new rule 1.2(c) allows us to meet. Because the Rule allows clients to obtain quality services on a limited basis, it benefits both the public and lawyers because it opens new areas of potential services to meet the unmet needs of potential clients.

Limited engagements present a great opportunity. The potential market is substantial so lawyers should consider the implications and benefits of “limited engagements.” The ISBA is aware of the rule change and is examining how “limited engagements” can benefit ISBA members. In the meantime, because we now have an opportunity to expand our services, we should all consider what “limited engagements” or “unbundling” means to our own practice and develop our own limited engagement agreements and opportunities.