PODCAST: Episode one - Understanding the importance of terms of business with Susan.

Gemma: Hi everyone, I'm Gemma, and today we have Susan, our Best Practice Advisor, with us to chat about something really important - terms of business. Now, I don't have any legal training, so I'm coming at this from a consumer perspective. So, Susan, why are terms of business so important?

Susan: Hi Gemma, it's great to be here! Well, terms of business— which go by other names too, though the name doesn't really matter—is so important because of what they contain. The terms are the contract between a solicitor and their client, and they are a critical risk management tool.

On the one hand, we often see them reading like limitations of the firm's liability, with phrases like "reserving the right" or "we will not be liable for." But on the other hand, and perhaps more importantly, they help to manage expectations for the client. They clarify the relationship, the responsibilities, and the rights that both the solicitor and the client have towards each other. Ideally, they should outline what each party can expect from the other.

Gemma: That makes total sense. So, what  exactly do the terms need to cover?

Susan: Well, the Law Society of Scotland has rules about what must be included. Basically, they say that the terms should cover the scope of the work being done—and ideally, what's not going to be done too. They should specify who will handle the work and also they should contain information about the costs, including details about the solicitor's fee and other potential costs. If the work involves legal aid, there are further details that must be included. The terms should also explain how a client can complain to the firm, and lastly, they must include a signpost to the SLCC.

Gemma: That sounds pretty straightforward. How well do these work?

Susan: That's a great question. Unfortunately, some of the complaints we see show that many clients don't fully understand what the solicitor-client relationship is all about or how it works. We recently sampled over 80 terms of business to see what was being said, what wasn’t, and how it was being said. We found that while the basic information was generally there, many documents were overcomplicated, confusing, and frankly not easy to read. We estimated that about 66% of the firms we sampled had not made the best use of their opportunity to effectively manage client expectations.

Gemma: That's quite a high percentage. How could these problems have been avoided?

Susan: Well clients who don’t understand what to expect can get frustrated, and that's what leads them to complain. Actually that's quite ironic, because the terms are supposed to help solicitors avoid complaints. Now, if you’re telling your clients as a solicitor why it’s important to read the terms, please be kind to them—please make them readable.

Gemma: That totally makes sense. You mentioned there’s so much else in the terms hat you saw. Can you give me a bit more detail about that?

Susan: Sure. The core information should be what is required by the rules, but there's other guidance and legislation and that means generally more details on other points tend to be included, like the client’s right to cancel or the requirement for anti-money laundering checks. It’s easy to get bogged down in the details, but it’s also important to think about the context. When writing as a lawyer, there's a temptation to specify every act, section, or requirement that you’re following, but is that really important to the consumer? Do they need to know which regulation entitles them to cancel, or simply that they can do so? Solicitors really need to focus more on what’s important to the consumer and less jargon.

Gemma: So how should firms communicate all this, then?

Susan: In everyday conversation, we don’t use terms like "the addressee," or "render invoices," "howsoever," or my personal favourite: "upon payment of which sum, we shall deliver up the document and serve notice thereof." Sure, I bet they didn't try to read that one out loud. Really, plain language is key.

Gemma: I can’t believe someone actually said that!

Susan: It’s true. When it comes to setting out fees, solicitors also need to think about what is going to be understandable to a client. Solicitors for so long have used the term "units" or "sheets," and then they try to explain them, but clients never use those terms in real life. Instead of asking a client to calculate a stated fraction of a unit rate which is applicable to a junior solicitor for photocopying a sheet, which means so many words, why not just say "£1 a page"? Good layout is important, and that means decent-sized margins and spacing, clear headings, and plain numbering it all help. Sequencing matters as well—don’t scatter information about fees, court costs, when your bill is due, or interest rates across multiple pages. Try to group it all together under one heading, like "Cost of the Work." There’s a bonus to that: when you try to put things under relevant headings, you might spot something that really didn't belong in the terms in the first place or could be explained later, if and when it does become relevant to the transaction.

Gemma: Can you give me some examples of how this actually plays out in practice?

Susan: Sure Gemma. Let’s say you want to make a will. You’ve had a first meeting to discuss your options, and now you’re getting the terms of business. What’s important to you at this point?

Gemma: Probably my options, so what's the cost, when I need to pay, when it will be ready for me to sign, and what happens with my signed copy and their signed copy.

Susan: Exactly. Now imagine you’ve approached a firm that uses standardised terms of business, because we do recognise it's easier for them. But their website claims they have a personalised approach to every client. But you see their terms start discussing legal aid or hourly rates for litigation, and even a clause that says when we instructed by a limited companies or starts to quote section six of the Late Payment of Commercial Debts Act. Which I presume you don't really have that to hand?

Gemma: Not really.

Susan: So, you’re probably starting to get a bit frustrated right?

Gemma: Definitely. So it sounds to me like their thinking they’re just ticking boxes without really thinking about what’s relevant to me.

Susan: Exactly. And whilst we understand the reasons that firms might prefer to use standardised documents, they could still do more to make them personalised. It could be something as simple as changing a heading like "Conveyancing" to "Your  Purchase of 6 Aberdeen Way." That can make all the difference or tell the client these are standard terms, but here are the clauses particularly relevant to you when making a will.

Gemma: But surely solicitors want to cover what happens if something unexpected comes up?

Susan: That’s a valid point and we understand that too. Conveyancing is actually a very good example because normally this is done for a fixed fee, and normally that fee applies on the assumption things go smoothly. But the client need to understand that if complications arise, additional work is needed to get things back on track,  and that means an additional fee for the extra fee. Solicitors can say that but do they really want to spend 5 pages listing every possibility now,

Gemma: I'd actually want to skip over that if it wasn't relevant to the me, if I didn't have time especially to wade through it too.

Susan: That's exactly right. Maybe the client won't even bother with any of the later pages either. As you say, it's irrelevant to the client until it happens. And when it happens the solicitor will probably want to have a conversation anyway with the client. To ensure them they can fix the situation.

And that is exactly time when the client is going to better recognise the value of the additional fee, which is going to boost their trust.

Gemma: So, what happens when things do go wrong? How should the solicitor handle that?

Susan: The terms of business must include information about the client's right to raise complaints to the firm, as well as our contact details at the SLCC. While some might think this encourages complaints, a client’s right to redress is actually a really fundamental part of any regulated profession, and that's apart from consumer protection principles and even the most challenging complainers should never face obstacles or penalties for exercising their right to complain. Remember, firms can still engage with a complainer even after they’ve approached the SLCC.

Gemma: It sounds like terms of business are a really important tool for solicitors and the complainer. Is there anything else solicitors might find useful?

Susan: Sure. A few firms didn’t get our name right, and some firms hadn’t updated their terms of business to reflect changes like the extension of time limits from one to three years some time back. We did write to everyone in our sample who needed to correct their terms, but here’s another reminder to all others please who maybe weren't covered in the sample: to keep your documents current, to review them, and see what you could improve.

Gemma: So, I think it’s probably a good thing for us to share the SLCC's current details then.

Susan: That’s right. Since writing the report, we’ve actually moved to 12-13 St Andrew Square, Edinburgh. You can find all our updated information on the first page of our website and while you’re there, please do check out our other resources on complaint handling, including our guidance and blogs. And remember, you can always reach out to us with any questions or topics you’d like us to cover in future episodes.

Gemma: Thanks so much, Susan, for all this valuable information, and thanks everyone for listening. Don’t forget to review your terms of business and make sure they’re clear, up to date, and client-friendly. If you’d like further information, remember to go onto our website and follow us on our social media channels.

Thanks very much Susan.

Susan: Thank you.