Instructing other law firms, experts, advisers, etc.

There are numerous reasons why you might need to engage a third-party expert/law firm/adviser etc. When you do, there are some important factors you need to bear in mind to ensure the firm does not end up with an unexpected liability for negligence or fees. Pods are individually responsible for costs exposure in excess of our permitted thresholds. See the section on our Disbursement Guarantee for further details. You need to address the following points.

1. Will the appointment of the adviser be via Keystone or directly with the adviser? A direct appointment gives us less liability for, inter alia, their fees, any incorrect advice and the choice of adviser. If we are to make the appointment, then we do so only as agent for the client and this is set out in our Additional Terms of Purchase. These terms always apply and the footers of our emails make this clear. However, we ask you to point this out expressly to the client and the third party you are engaging as the client's agent. Even though we are only contracting as agent, the third party will still bill us and so it's a good idea to get the third party to cap their fees and to ensure we have Costs on Account for the amount of the cap. Naturally caps can be revised and further Costs on Account taken.
2. Are we advising on the terms of engagement of the adviser? If so, we must have a colleague with suitable expertise review the terms and duly comment. It should be expressly noted in our Engagement Letter or any email that amends the Engagement Letter that advising on the terms of appointment of the other adviser is in or out of scope. As this would be extra work, relevant fee implications should be considered. The key factors in any review are fees, scope, limitation of liability, choice of law, dispute resolution/arbitration and any indemnity provisions. Even if we are not advising on the other adviser's terms of appointment, we still have a duty to warn, i.e. point out to our client the really big things that should be looked at, say how badly they can go wrong and recommend the client takes independent legal advice.
3. Who is choosing the adviser? It is a balancing act. We have to ensure a suitable third party is chosen and the client needs to be the one choosing. However, often you know better than the client as to who should be instructed. However you choose, the methodology must involve the client and the selection process and reasoning should be set down in writing. Bear in mind that if we alone choose the adviser, then we may be liable for its advice/negligence. So we recommend you make use of independent guides such as Chambers and Partners or The Legal 500 (or equivalents in other sectors) and have the client actively involved in the decision as to who to instruct. If that is not appropriate, then we should offer the client a choice of two (or more) advisers and make it clear that we are not recommending them. We can endorse them by saying for example, we have worked with them before, we know they are a well-respected firm locally, we have seen others of our clients instruct them, etc. See the section below on making referrals regarding both any financial benefit that might be offered to us and also as regards some template wording making it clear that the client is choosing the adviser.
4. Will we be relying on their advice in order to give ours? If we will build our advice on theirs in some way (and this will almost always be the case), then our Engagement Letter should make it expressly clear that: i) we will assume the work of the other adviser has been undertaken properly and we are instructed to accept it without enquiry, ii) we are not liable for it, iii) we are not liable for any error of ours caused by our reliance on the work of the other adviser.
5. Who will sign the adviser's terms of appointment? If we are to sign them for the client, then we need express client written instruction to do so and the client should first review and approve the draft Engagement Letter. We must sign as agent and not as principal, unless of course, per point 1, we are obliged to appoint the advisers ourselves. You can sign it (as agent only) once you have the client's say so. If the other side require a director's signature, then you can forward it to sign once you have confirmed that the above points have been addressed to your satisfaction. If the adviser is to be retained by Keystone, then only the Director of Operations and Compliance can sign the terms. To arrange for such signature, see "Requesting a director sign a document on behalf of the firm", above at 1.7.
6. Consider if the adviser needs to be totally independent from you. For example, if you are recommending a mediator or an investigator, you'll need to warn the client that the advantage of the adviser you use being known to you comes at the cost that someone may complain they are not independent and the process has to be done again.

As part of its SLAPPS guidance, the SRA has turned its attention to lawyers' use of Private Investigators. The SRA has said that you remain accountable for compliance with the SRA Standards and Regulations for all work carried out by PIs on the client's or your behalf, and you should be mindful of the risk of them acting illegally or unethically. The best way of protecting the client and yourself is to prepare a letter of instruction to the PI which sets out clearly your requirements and expectations, including that they conduct their work lawfully and ethically. We have prepared a template letter of instruction to PIs with guidance in the margin which covers these and other issues. Completing this template will help you comply with your regulatory duties, as you can reasonably expect that the PI will follow the instructions which you give to them. If after instructing the PI it comes to your attention that they have strayed from your instructions and/or proper legal or ethical standards, please contact a member of the Compliance Team, who will be pleased to help you.