The Practical Lawyer

These days, sole practitioners are often singled-out as an insurance risk. Indeed, most lenders will require panel firms to have two or more partners, in the expectation that this will reduce the likelihood of fraud. As a result, it is tempting for sole practitioners to get together and create arrangements that may appear from the outside to be a partnership, but in reality remain separate firms.

Your duty to your client continues until the retainer has been properly terminated. Note that simply writing to a client saying that your firm will cease to act if invoices remain unpaid, may not be sufficient to actually terminate the retainer.

The Services Regs 2009 came into force on 28 December 2009. They are the result of an EU Directive and they apply to many categories of ‘service providers’ including solicitors (although they do not apply to notaries, and financial service providers).

The aim of the Regs is to ensure that customers have the necessary information. Virtually all the information required will already be provided by solicitors’ firms. The detailed information that must be made available is:

There was relatively little publicity given to the sudden abolition of remuneration certificates last August. Indeed, many firms have yet to change their standard documentation to reflect the fact the remuneration certificate procedure no longer exists.

Previously, the obligation with non-contentious costs was to inform the client of the right to a remuneration certificate; the right to have the bill assessed by the court; and the right to charge interest on the bill. Since 11 August 2009, this has been amended to remove the remuneration certificate option. Thus, you now have to inform the client in writing of:

Accounts Rule 18, dealing with controlled trust money, was recently repealed. The end result is that solicitors are now permitted to include trust money within their client bank accounts.

As the demand for legal services declines, so the number of practising solicitors increases (to 112,589) [2010] LSG 14 January 1. As far as trainees are concerned, the number of training contracts last year was down 32%, but the number starting the LPC course declined by a mere 2.5% [2010] LSG 7 January 8. Apparently, about half of all trainees have debts of over £10,000 before they qualify [2010] LSG 7 January 3.

The guidance on referrals has become increasingly messy, with the latest edict on what to do if a client has a pre-existing referral arrangement.

When can you start charging interest on unpaid costs?

Non-contentious: you can charge interest from one month after delivery of the bill of costs (provided the client has been given written notice of the right to request a remuneration certificate, and the right to seek assessment of the bill by the court).

If you issue a gross sum bill, can the client then request a further detailed breakdown?

Non-contentious: the client can ask for a remuneration certificate, but that will not oblige the solicitor to provide a further detailed breakdown of the bill. Note that you can provide a further breakdown and make a charge for it, so you should put that to the client and get his or her consent before incurring that additional cost.

the client can request a detailed breakdown of costs in place of the original bill within three months of receiving it. However, the catch is that this request by the client will then cancel your original gross sum bill (ie if you then decide, when going through the file, that you did not include all your costs, then you are entitled to draw up a bill for a larger amount). Note that this does not apply if you have issued proceedings for payment of the bill, or if there is a Contentious Business Agreement.

Source: Guide to Good Practice (Law Society Publishing; £39.95). A comprehensive guide.

A summary of the main occasions when you should decline to act:

where it would involve you in a breach of professional conduct (eg undisclosed contract race);

if you lack the expertise to carry out the client’s instructions confidently;