Client Care, Practice Management and Business Awareness
Client Care
The retainer and the terms of engagement
A retainer is the contract under which the lawyer acts. It may be oral or in writing, but good practice (and most regulators) demand a written engagement letter setting out the scope of work, the identity of the client, the fee basis and estimate, who will handle the matter, how the client may complain, and what is excluded. Confirm instructions in writing, particularly where the client limits or expands scope.
Costs and communication
Give the best information on likely cost at the outset and update the client when circumstances change; explain disbursements, VAT and billing intervals. Confirm significant advice in writing - oral advice is unprovable if disputed. Keep the client informed of progress and of delays. Avoid jargon. Identify vulnerable clients and clients lacking capacity, and adapt (intermediaries, best-interests decisions).
Confidentiality, conflicts and complaints
Distinguish confidentiality (all client information) from legal professional privilege (a narrower, evidential concept). Run conflict checks before accepting instructions and again if the matter changes. Explain the complaints procedure at the outset and handle complaints promptly and in writing; keep a written record. On termination, account to the client and note any lien.
Traps
- Assuming an unwritten retainer is unenforceable - it usually is enforceable, just harder to prove.
- Treating confidentiality and privilege as identical.
- Failing to confirm advice given by telephone.
Rule of thumb: if it is not on the file, it did not happen - record instructions, advice, cost updates and client decisions contemporaneously.
Practice Management and Business Awareness
Accounts and client money
Know the client account rules: client money must be paid promptly into a client account, must not be mixed with office money, and may only be withdrawn for a purpose connected with that client's matter or as the client directs. Paying office expenses or a client's personal debts from client funds without authority is a serious breach. Understand interest on client funds, reconciliation, and audit requirements.
Risk and compliance
Cover anti-money-laundering and know-your-client checks, source of funds and of wealth, suspicious transaction reporting, data protection and confidentiality, cybersecurity and email fraud, file review and supervision, delegation limits, professional indemnity insurance, undertakings registers and business continuity. Understand business structures (sole practitioner, partnership, LLP, company) and their liability consequences, plus continuing professional development obligations.
Business awareness
Learn the metrics: chargeable hours and utilisation, work in progress, lock-up (debtor days plus WIP days), cash flow, realisation rate and recovery, fee earner leverage and matter profitability. Understand pricing (hourly, fixed, capped, contingent), budgeting, marketing and client retention, and how to write a short business case.
Traps
- Assuming a client's advance payment can be used to settle the firm's overheads.
- Treating a change in the client's bank details as routine - verify by a known channel (a common fraud).
- Confusing profit with cash flow.
Rule of thumb: money in, money out - never move client money without a documented client authority or a matching client liability.