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A risk manager from Master Policy co-insurer Zurich considers the dangers of dabbling
There are many reasons why solicitors dabble in fields of law in which they have little or no expertise: to keep clients and to keep them happy; to help out family and friends; or the pressure to fee.
Whatever the reason, dabbling is highly dangerous. Notwithstanding the pressures of recession, you cannot afford to take on work in fields of law you know little about. The long term cost in terms of unhappy clients, complaints, negligence claims and increased insurance premiums could far exceed any fees generated.
It can be difficult to say “no” when a client asks you to act, especially if they insist that they won’t trust anyone else. But if you don’t have the relevant expertise, it’s in the client’s best interests as well as your own to just say “no”. Take the following scenario:
Whilst acting in a property dispute, an assistant solicitor was asked by the client to draft a deed of variation to minimise inheritance tax in relation to her late husband’s estate. The assistant advised the client that neither he nor anyone else in the firm undertook such work and that she should approach another law firm. The client was insistent that she didn’t want to go anywhere else. She told the assistant that she had attended a seminar on IHT planning by a firm of financial advisers and that he could obtain a style deed of variation from them. The assistant duly obtained the style from the advisers who made it clear that it might not be suitable for that client’s specific circumstances. The assistant drafted the deed which he considered to be “quite straightforward”. It turned out not to be as straightforward as he thought. It fell foul of the gift with reservation rules and was totally ineffective in minimising IHT liabilities. After the client died her daughter made a claim against the firm.
Dabbling in an effort to keep clients happy often has the opposite effect.
Creeping scope/the “straightforward” transaction
Dabbling is not always the result of a conscious decision to undertake work in a different practice area. Much of the time it arises as the result of a complication in an existing instruction, or an apparently small bit of ancillary work flowing from an ongoing transaction.
Many solicitors make the mistake of thinking that it is safe to undertake occasional pieces of “uncomplicated” work, even if it is in a different area of practice – for example, in relation to drafting wills or simple contracts, or handling “straightforward” disputes. Far from being risk free, the reality is that dabblers lack the experience to know whether a matter is simple or requires greater expertise.
A partner specialising in non-contentious construction acted for a developer which was constructing 10 homes. The developer became embroiled in a dispute with its subcontractor and asked the partner to act in the dispute. The partner gave some preliminary advice but, when the builder raised proceedings, he was soon in difficulty about how to respond. Better late than never, the partner informed his client that the case was developing beyond his capability and referred the client to a specialist construction litigator in another firm.
Some solicitors fear that if they refuse to act and send the client elsewhere, the client will take all their business away. The unfortunate irony is that if they do take on the work and their lack of expertise causes the client loss, they will almost certainly lose the client. In the above case study, while the developer never made a claim against the firm, nor did they instruct that firm again.
It would be particularly frustrating if a “dabbling” claim was intimated in circumstances where another fee-earner within the firm was competent to undertake the work. Whether it’s a case of thinking they can do everything, or being embarrassed by admitting that they can’t, many claims could be avoided if the solicitor would just pass the client to a colleague with the relevant expertise.
Even in an area that you practise in regularly, accepting instructions that are more complex than you are accustomed to dealing with can lead to errors and consequential claims.
The clinging client
What should you do if, having disclosed your lack of expertise, the client wants to instruct you anyway?
Refuse the instruction. Why would any client want to retain an incompetent lawyer? Remember that if you take on a case that you do not have the expertise to deal with, disclosing your lack of ability does not limit your duty of care. If something does go wrong, in any resulting negligence claim your conduct will be judged against the standard of a reasonably competent solicitor (not by the standard of an incompetent solicitor)!
You should also be aware that if you take a matter on when you do not have sufficient expertise you may be in breach of para 10 of the schedule to the Solicitors (Scotland) Standards of Conduct Practice Rules 2008. This provides that “Solicitors must only act in those matters where they are competent to do so”.
Acting for family and friends
Relatives often assume that because you are a lawyer you know all there is to know about every area of law. Whilst flattering, it’s simply not true. Only you know what you do know and what you don’t. A sensible rule of thumb is that if you wouldn’t do the work for a stranger because of lack of expertise, you are not qualified to do it for a family member or friend.
When acting for family or friends, often the work is taken on as a favour, free of charge, with no formal engagement. Almost invariably nothing is documented, with a resulting lack of clarity about what the solicitor will and will not be doing for the “client”. The dabbling solicitor often assumes that even if something does go wrong there will never be a claim. This is not the case.
A sole practitioner specialising in media law agrees to be the executor of his brother’s will. When his brother dies four years later, he delays in administering the estate, whether due to pressure of his other work, or lack of experience in dealing with executry matters. During this time there is drop of £112,000 in the value of the estate due to falling property and share prices. The beneficiaries (the solicitor’s niece and nephew) then raise a claim against their uncle for diminution in value of the estate.
Awareness of potential dabbling does not stop at the transaction vetting stage. Unexpected absences can also lead to solicitors dabbling in areas that they don’t have the expertise to deal with.
A client, the owner of a pharmacy business, instructed a firm to act for him in the defence of a claim brought by one of his suppliers. An assistant litigation solicitor was assigned to deal with the case, but shortly afterwards she became ill and went on long-term sick leave. Not wanting to let the client down, a partner in the firm who had previously acted for the client on non-contentious matters took over the conduct of the case. He handled it very badly. He failed to:
- provide the client with any advice on the merits of his defence;
- present sufficient evidence to the court;
- advise the client adequately regarding the possible outcomes of the case.
Venturing into the unknown
As firms have struggled to cope with recession, many practices have sought to diversify, and many solicitors have moved into other areas of practice. Diversification may be a very wise commercial move, but it must be undertaken with great care to avoid the dangers of dabbling. If you are contemplating diversifying, do first consider whether there is any relevant expertise in the firm, whether appropriate supervisory procedures are in place, and whether relevant training has been provided to the appropriate staff.
Reliance on counsel
Some solicitors think that it’s acceptable to act in areas in which they have no expertise as long as they can rely on counsel. Even if an error originates from counsel, the client is likely to bring a claim against the solicitor with whom they have the direct relationship. And it’s difficult to obtain a 100% contribution from counsel in any professional negligence claim. The best advice is that if you don’t have the expertise to critically evaluate counsel’s advice, then you should not take the matter on.
Whilst individuals have a responsibility to say “no” to work they don’t have the expertise to deal with, every practice should have a firm-wide policy clearly communicated to all fee earners (including partners) which sets out the type of work that the firm will and will not undertake and which contains an absolute prohibition on fee earners dabbling in areas outside their expertise.
Lindsay Kerr is an assistant risk manager at Zurich Professional & Financial Lines. Lindsay can be contacted at firstname.lastname@example.org .
The information contained in this article provides only a general overview of subjects covered and is not intended to be taken as advice regarding any individual situation, and should not be relied upon as such.