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I’ve been thinking a lot about unbundled legal services lately, particularly in the field of consumer bankruptcy law. With the changes to the US Bankruptcy Code that became effective in October 2005, a host of new requirements forced lawyers to raise their fees significantly in order to cover their costs. Though necessary from a business perspective, it created hardship for many people who needed to file for bankruptcy.
This, of course, is nothing new – the doors to the courthouse are often barred to those with limited resources, forcing them to go it alone or do nothing at all. This is not the say that lawyers should lower their fees, but rather that there needs to be a middle ground.
People who need help should be able to get it, and lawyers deserve to be compensated for their representation.
Enter the notion of unbundled legal services, when the lawyer provides a more limited scope of representation than the norm in exchange for a lower legal fee. It’s good for the consumer because they get what they can afford, and good for the lawyer because they can still make an honest living for their efforts.
In the field of consumer bankruptcy, unbundled legal services has surfaced in the form of do-it-yourself document preparation services that offer petition preparation for very low fees. Though seemingly good for consumer debtors, these services are not law firms and so cannot provide reliable legal advice. The consumer is therefore left with nothing more than a typing service. They’ve got to fend for themselves when it comes to getting information about exemptions, types of debts, and even whether they qualify for Chapter 7 or Chapter 13 bankruptcy.
DIY services like this come and go, often being brought to their knees by the court system – and rightfully so. You don’t need a lawyer to file for bankruptcy, but if you’re paying someone a fee you should at least be informed.
There have been some scattered decisions regarding the unbundling of legal services in the context of consumer bankruptcy cases, but none have fully embraced the subject in light of the needs of the consumer debtor and exactly how representation should be structured in order to maintain the integrity of the process within the bounds of the law.
As an untethered lawyer – one who seeks a life of freedom and balance, protecting his or her clients without sacrificing integrity and ethics – the subject of unbundled legal services is bound to surface. And I would be remiss if I didn’t grab this bull by the horns and help to work through the issues surrounding unbundled legal services.
After all, there’s not a whole lot of coherent information available to the legal profession unless you dig for it. Some state bars have made tentative moves towards defining how unbundled legal services should work, but many fields of law remain uncharted territory.
Watch here for more on this fascinating subject, specifically how a bankruptcy lawyer can seek to offer unbundled legal representation as part of his or her practice.
Photo courtesy of z287marc.
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I tend to think what is heading our way is what has happened with all other industries. Lawyers will give away what is abundant and move on to sell that which represents scarcity. So, all of the forms and system for creating forms, notices and the like, which is what some attorney hide behind in reality, will become completely worthless as they will be presented for everyone's use. What will be sold is the guidance. The model now where lawyers try to compete with LegalZoom and sell nominal work product online is getting cheaper and cheaper as more attorneys do it. Like LegalZoom the money is not made in the forms, but in the extra services sold. A time will be reached when the price of the online services will be zero for unbundled services. Attorneys need to think through how they operate when this happens.
Excellent point, Chuck. The unbundled legal services we see online now tend towards the “fees for forms” model rather than a “lower fee for guidance without as much action” model. I intend to continue investigating these issues as time rolls on, as it's on top of my mind lately.
The Courts in response to the unbundling by some attorneys are pulling into Court the lawyer who sells the form and requires the attorney to represent the party in the legal action.
The Courts are not at all on the same page. They want everyone to have counsel as it makes the Court's work much simpler.
The Courts in response to the unbundling by some attorneys are pulling into Court the lawyer who sells the form and requires the attorney to represent the party in the legal action.
The Courts are not at all on the same page. They want everyone to have counsel as it makes the Court's work much simpler.