Common Issues with Private Client legal services
The lawyers’ approach. Every private client lawyer we have ever met is an ‘island’ unto themselves. The usual traits are to believe in their way and their drafting and their expertise but also to fear the advice and comment from their peers.
As such, it can be unclear in larger firms what actual ‘products’ or ‘services’ are being offered by the firm through its private client lawyers. One lawyer may offer lifetime property trusts, another may offer first registration of title work for conveyancing, another may offer Court of Protection and Deputy services, another professional trustee services. But do the partners and/or head of department know this and understand a plan of how to deliver those services at low-risk and profitably?
All such issues are entirely understandable. This can stem from private client lawyers only dealing with their own client work i.e. that they are not dealing with other private client lawyers as part of a conveyancing transaction, for example – they are often producing a Will or document for the client and it is not scrutinised from outside or even by other private client lawyers within their own firm. Some sole practitioners never come across other private client lawyers and thus rarely have the chance to compare products/services/drafting/precedents.
We can help with this very difficult process. Our experience is that help is needed in all firms
Typically: there will be a need to develop uniformity to help maximise efficiency and support working but also to recognise individual working methods and preferences:
- Developing and continuing to develop up to date precedents for Wills and Trusts – that all the private client lawyers in the firm can champion;
- An agreed template for a Fact Find of client information;
- A uniform method of delivering advice following initial meeting(s);
Budgets and financial constraints
Often, a private client department is working to a difficult set of budgetary requirements and constraints.
Will production was often seen as a ‘loss leader’.
Probate and estate administration was seen as a profit maker. Trust administration and Trust management was largely ignored, or not fully understood, and was largely dealt with as an add-on to Probate work.
Probate work can now be conducted fairly easily by clients themselves. They can apply online for a Grant and basic administration advice is given through many internet advice resources. So for private client firms, the ‘profit-maker’ element has shrunk dramatically as firms are trying to compete with the fact that clients can undertake the work themselves and there are non-regulated providers out there who can do the job just as effectively.
What is the solution?
In our experience, trust work is a key element of Private client.
If you look at a family’s circumstances, most families would benefit from a flexible trust structure. That provides succession protection for the wishes for spouses to inherit, and then children. However, this leads to a number of technical questions. That is where the lawyer’s expertise is valued and needed. It is this that makes this area of the law a viable business.
Estate Planning: if all basic Wills are converted to Trust-based Wills, the charges for trust-based Wills are usually double that of the basic Will. So, say a £195+vat Will become a £395+vat Will.
Probate: consequently, if that testator dies, the importance of advice from the law firm is key. The Will is now a Trust-Will. This has a level of complexity that only the trust lawyer expert can address. Now, it is not so easy for a client’s family to do the probate online themselves. They will take advice from the lawyer at the outset. On that basis, a simple Will that might not be administered by the firm at all (client doing everything) is now a probate and trust file that brings in £5,000 to the law firm.
Trust Management: from there, once Probate is completed, the Trust needs ongoing management. How has this requirement arisen? Well, most Will-Trusts are either life interest based or loan based. There is continuation – the assets may be passed from spouse to spouse, but there are protections for the children. If children inherit by loan, the value is more protected against divorce/insolvency/care fees and IHT on the child’s estate. Loans are still assets in the trusts and the trusts need registration and maintenance. Compared to the consequence of a basic Will (with no ongoing trust and no management fee), trust file management might bring into a law firm £500+vat each year in basic administration and reviews.
Consequences and Effects: if then a Trust is being reviewed, there will be a catch up with family members regularly – which can lead to regular estate planning reviews and other work that comes as a consequence of that.
So – if all basic Wills are converted to Trust-Wills, then you have the makings of a private client firm as well as happier clients and their families.
That sounds simple in theory. But how do you ‘sell’ the concept of Trust Wills to clients?
Well, to do that, you need to understand and be sold the concept yourself, first. That is where we come in. If we cannot sell you the concept to yourself, then perhaps we are not expert enough in our training or expertise in this area. For you, this is an important part of the trust and confidence in our training and service to you.
Once you are sold the concept, you will then have a focus. Next comes the need for an efficient approach to Estate Planning. Our next training aspect is on the matter of obtaining an effective “fact find” and front-loading your precious time ensuring that you take the fullest of details from clients at the outset, and importantly, that you ‘ask the right questions’ of them.