Legal opinions

Legal Opinions are opinions given by lawyers on a factual situation - for example, whether a company has been incorporated, or whether a document is validly executed and enforceable. This is to be distinguished from an opinion on the law given to a client, which is just an advice in the usual course and so is not covered by this section.

The reliance that third parties often place upon an Opinion and the consequential loss that may be incurred should the Opinion be inaccurate or incomplete makes this type of work inherently high risk. Consequently, some law firms decline to give Opinions as a matter of policy or require sign off from an opinion committee consisting of several partners.

Keystone requires you to follow the strict methodology set out below in order to reduce risk associated with giving an Opinion:

1. Inform the Director of Operations and Compliance about the client's requirement and ask him to nominate a colleague ("Peer") to work with you or suggest to him your own choice of a Peer with whom you'd like to work.
2. Agree with the Peer the nature of the retainer and any fee. Early involvement of the Peer is vital to avoid over-promising to the client.
3. Agree with the client the precise scope of the Opinion and the documents to which it will relate in a manner you know will be acceptable to the Peer.
4. Issue an Engagement Letter to the client to include relevant assumptions and fees in a form agreed with the Peer.
5. Prepare the draft Opinion.
6. Send the Opinion to the Peer and ask the Peer to undertake the work for the Opinion afresh. This is important as it will ensure a mistake in the Draft (for example a misreading of a search result) is flushed out.
7. Once the Peer has agreed the Opinion, send the Opinion with the signed Peer Review Form to the Director of Operations and Compliance (who may have comments, afford him a day for his review) with a copy to the Peer.
8. Once approved by the Director of Operations and Compliance, sign the Opinion and send to the client with a blind copy to the Peer and the Director of Operations and Compliance for their files.

Hint: Opinions must be limited to matters of law. Further, our liability should be expressly limited to £5 million. Full guidance notes are in PLC.

Hint: Our fee for providing an Opinion should reflect the risk we accept. This can therefore be very profitable work for the Lead Lawyer. The Director of Operations and Compliance would be happy to give a steer on fees. While the Lead Lawyer will usually charge a premium fixed fee, this would usually have built into it a fee for the Peer computed on a time basis at their default rate. The Peer should be afforded ample time to conduct a full review of the Opinion and the underlying information on which it is based. The Peer's involvement is not a rubber-stamping exercise. The minimum fee for a simple Opinion should be £5,000 to be split not less than £2,000 to the Peer. We recommend higher fees than £5,000 and a fair split in the fee. In the absence of agreement as to a fair split of the fee, the default split would be 40% to the Peer.