Scope creep is a concept in project management where the scope is altered without being properly requested and documented. The changes affect various other areas of the project, including the budget, agreed fee, completion timetable and the allocation of resources. Scope creep can occur in the execution of legal services as well.
There are several possible sources of scope creep. The circumstances surrounding the execution of the mandate may evolve necessitating an alteration of the scope of the instruction initially given to the legal practitioner. Clients seeking the best value for the money spent on the legal services may shift the proverbial goalposts to gain as much value as possible from the services within the agreed fee budget and timelines. Practitioners must be alert to scope creep and manage the potential risks flowing therefrom.
At the outset, ascertain what the client’s expectations are and the ambit of the intended instruction. Ensure that your understanding of the mandate and that of the client are aligned and that there is ‘a meeting of the minds’. This must then be documented and signed on behalf of the firm and the client. Clients who do not sign and return the document pose potential risks. Section 34(1) of the Legal Practice Act 28 of 2014 (the Act) provides that ‘[an] attorney may render legal services in expectation of any fee, commission, gain, or reward as contemplated in this Act or any other applicable law, on receipt of a request directly from the public for that service.’ The relevant portions of r 35 of the Rules made under the authority of ss 95(1), 95(3) and 109(2) read as follows:
‘35. Instructions to attorneys (s 95(1)(zC) read with s 34(4))
35.1 For purposes of this Rule 35 “client” means the user or intended user of legal services to be provided by an attorney.
35.2 Instructions by a client to an attorney may be in writing or may be verbal.
35.3 When instructions are given by a client to an attorney the attorney must ensure that they set out the intended scope of the engagement with sufficient clarity to enable the attorney to understand the full extent of the mandate. If the attorney is uncertain as to the scope of the mandate the attorney must seek written clarification of the intended scope of the instruction.
35.4 Where the client instructs the attorney verbally, the attorney must as soon as practically possible confirm the instructions in writing and in particular must set out the attorney’s understanding of the scope of the engagement.
35.5 …
35.6 Rule 35 applies, with the necessary changes, to an advocate contemplated in section 34(2)(a)(ii) of the Act who is in possession of a Fidelity Fund certificate.’
The scope of the mandate may evolve in the course of its execution. Changes must be discussed and agreed between the parties and documented in the written scope of the engagement. This may be done in an addendum to the letter or engagement or even in a new document setting out the expanded terms. If the changes are not documented, the client may later contend that the extended services were not agreed and thus executed without a mandate or even dispute being liable for fees related to work done outside of the scope initially agreed between the parties. On the other hand, if a client seeks to hold an attorney liable for services that were not part of the initial agreement between the parties, it will be easier for the legal practitioner to defend a claim (or a complaint to the Legal Practice Council) if the scope of the engagement was clearly set out in a document signed by the parties.
Changes in the scope will affect the legal practitioner’s time dedicated to the matter and thus the expected fee. The expected timeline for the completion of the mandate will also be impacted by changes to the scope.
Changes to the scope of the mandate do not always occur instantaneously. An alertness to incremental changes introduced by clients over time is necessary. If dealing with a commercial matter, for example, the initial instruction may be to draft a document setting out the terms of the agreement between the parties. It is not uncommon for the underlying transaction to be subject to credit or finance agreements. The documents relating to the finance aspects of the transaction may then be passed on to the attorney with the express or implied expectation that those documents will be reviewed and advice provided in respect of the legal risks flowing from the credit or financial aspects of the transaction. If the scope evolves to consideration of regulatory or commercial implications of a transaction, it must be recorded. Clarify what the client’s expectations are. An expectation that the legal practitioner will conduct a due diligence exercise, for example, is a matter to be clarified upfront.
Accepting an instruction to deal with a matrimonial matter may appear straight forward. Dealing with the dissolution of the joint estate, the proprietary and financial interests of the parties after the divorce decree is granted is a matter that the client may expect the legal practitioner to deal with though the latter may not have contemplated that when the instruction was accepted. Clients may expect that the legal practitioner will deal with matters relating to claims against pension or provident funds of their erstwhile spouses or even the sale and transfer of immovable property that formed part of the joint estate.
Pursuing a personal injury matter requires substantial work. This includes investigating the underlying circumstances in which the injuries occurred (this relates to the merits/liability of the claim) and assessing the damages suffered by the client (the quantum of the claim). If there are other proceedings related to the accident, agree with the client whether or not the firm will act in those proceedings as well. There may be criminal proceedings related to a motor vehicle accident. The client’s expectations may be that the legal practitioner will attend to these.
Set out the terms of the scope of the engagement with as much particularity as possible. Record that any additional services will be outside of the agreed scope, thus attracting an additional fee and will be subject to an agreement in that respect with new timelines. Changes to the scope may require additional resources on the part of the firm or the instruction of resources and experts outside of the firm.
Thomas Harban BA LLB (Wits) is the General Manager of the Legal Practitioners Indemnity Insurance Fund NPC in Centurion.
This article was first published in De Rebus in 2024 (August) DR 22.
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