File review and issue identification - Client objectives and...

Learning Outcomes

This article outlines effective file review and issue identification aligned with client objectives and commercial context, including:

• Reviewing client files methodically to extract key facts and build a clear chronology
• Clarifying and prioritising client objectives, process preferences, and BATNA
• Distinguishing legal problems from commercial interests and practical constraints
• Mapping facts to legal issues, elements, and required evidence in a disciplined way
• Spotting risks, deadlines, and assumptions; recording gaps for clarification
• Assessing commercial context (market timing, relationships, cash flow, risk appetite) to shape advice
• Planning next actions with client-focused recommendations, mitigations, and risk management
• Capturing constraints (time, budget, stakeholders) to define viable options and go/no-go decisions
• Prioritising issues and actions in line with client success criteria
• Recording assumptions and evidence needs to support each proposition
• Applying the structured approach to SQE2 case analysis and written tasks
• Framing recommendations that balance legal merits with commercial realities and the client's risk appetite
• Translating analysis into a concise, practical action plan with responsibilities and target dates

SQE2 Syllabus

For SQE2, you are required to understand file review and issue identification from a practical standpoint. You must be able to analyse client files, extract client objectives, recognise the impact of commercial context, and identify key legal and factual issues, with a focus on the following syllabus points:

• reviewing client files to extract and clarify objectives and priorities
• identifying and distinguishing legal, commercial, and practical issues
• recognising the significance of the commercial context in advice
• spotting potential risks, deadlines, and next actions
• mapping facts to the legal framework and recording assumptions
• assessing constraints (time, budget, appetite for risk, stakeholder relationships)
• planning an action list that reflects the client’s “go/no-go” decisions and preferred process

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the primary purpose of file review before giving written legal advice?
2. Define "commercial context" in relation to client objectives.
3. When reviewing a new client file, which of the following should you identify first? a) hazards to your firm
   b) client objectives
   c) technical precedent references
   d) drafting errors
4. True or false: Legal and commercial issues can always be addressed separately in client advice.

Introduction

Reviewing a client file is a critical step before providing legal advice or attending an interview. For SQE2, effective file review requires you to extract relevant information, clarify exactly what the client wants to achieve, and understand the commercial context influencing the matter. This enables you to identify issues and set clear priorities for advice or action.

The most efficient reviews follow a structured path: gather and organise facts, identify objectives and constraints, frame the legal issues, assess options against the client’s reality, and agree a practical action plan. This avoids jumping to conclusions and ensures your advice remains relevant, timely, and aligned with what the client considers success.

Key Term: file review
The process of systematically reading and analysing all documents and information in a client matter to identify key facts, issues, and objectives relevant for action or advice.

The Purpose of File Review

Your main aim in reviewing a file is to ensure that you have all the information necessary to identify the issues to be addressed, the client's fundamental objectives, and any risks to be managed. A structured approach helps you avoid missing important details or client expectations. As part of that structure, create a chronology, highlight disputed facts, record assumptions, and flag gaps that will need clarification with the client or other sources.

Key Term: issue identification
The process of recognising and listing all relevant legal, factual, and practical matters raised by a client file that may require action or advice.

Understanding Client Objectives

Client objectives are the results, outcomes, or interests the client seeks to achieve. They may be explicit or implicit and may include both legal and commercial goals. Clarifying objectives early is necessary to frame effective advice and avoid irrelevant work. Objectives can be outcomes (“settle quickly”), process preferences (“keep negotiations confidential”), or constraints (“limit spend to £X this quarter”). They often change with new information, so revisit them as the matter progresses.

Key Term: client objectives
The clearly defined outcomes or aims a client wishes to achieve in the context of their matter, guiding the legal analysis and advice.

Key Term: BATNA
The Best Alternative to a Negotiated Agreement—the fallback position if a preferred outcome cannot be achieved, used to gauge when to walk away or pivot to a different strategy.

Commercial Context

The commercial context refers to the wider business, financial, and strategic environment influencing the client's situation or transaction. Understanding this context is essential to tailor advice that is practical, relevant, and aligned with the client's real interests. Context factors can include market timing, cash flow, stakeholder relationships, reputational concerns, supply chain constraints, regulatory environment, and the client’s risk appetite.

Key Term: commercial context
The broader business, market, or financial factors—such as time pressures, competitor activity, or business strategy—impacting the client's matter beyond pure legal considerations.

Key Term: constraints
The practical limits within which advice must operate (e.g. budget, time, resources, partner relationships, appetite for litigation risk), directly shaping viable options.

Key Term: chronology
A dated and ordered record of key events and communications, used to organise facts, detect gaps or inconsistencies, and track deadlines.

Why Commercial Context Matters

Legal issues do not exist in a vacuum. A client’s priorities may be driven by urgency, market conditions, relationships with business partners, or other commercial realities. Advice that ignores these factors risks being technically sound but practically unhelpful. Anchoring your analysis in the client’s context helps you to propose feasible options, anticipate risk, and prioritise actions that achieve what matters most to the client.

Key Term: risk spotting
The process of proactively identifying potential adverse consequences, exposure, deadlines, or practical difficulties that may affect the client’s matter.

Key Term: priorities
The ranking of issues or objectives by importance to the client, dictating the order and focus of actions and advice.

Key Term: action plan
A short, practical record of agreed steps, responsibility, and target dates, used to implement advice and monitor progress.

Key Term: SCOC mapping
A structured technique to define problems and solutions by listing symptoms, causes, outcomes, and constraints, ensuring advice is targeted and realistic.

Worked Example 1.1

A client wants to purchase a business rapidly to meet a market opportunity. The due diligence reveals potential liabilities, but the client insists completion must happen within two weeks.

Answer:
The file review should record the urgency (commercial context), the client’s objective to complete quickly, and the legal risks (potential liabilities). Advice should explain the risks of an accelerated timeline, allowing the client to make an informed decision balancing speed and risk. Consider mitigations consistent with the context, such as warranty/indemnity insurance, escrow arrangements, or limited scope due diligence on high-risk areas, and model whether the benefit of speed outweighs residual exposure.

Common File Review Tasks

During file review, you should:

• Identify what the client wants and why
• Extract all key facts and arrange them logically (chronology, themes)
• Note gaps or ambiguities and plan questions for clarification
• Distinguish between legal issues (e.g. breach of contract, regulatory risk) and commercial objectives (e.g. minimising cost, preserving relationships)
• Spot risks, urgent matters, and critical deadlines
• Note next steps for action and any further information needed
• Record constraints (time, budget, process preferences) and any BATNA
• Map facts to law and evidence required to support each proposition

Organising information around categories can help. Typical categories include: personal and party details, witnesses, events and dates, what the client wants, previous advice or action taken, and any existing proceedings. This aids clarity and speeds up analysis.

Worked Example 1.2

You receive a file for a company client considering litigation. The commercial context is that prolonged proceedings may harm their reputation. The client states they want “to avoid adverse publicity above all.”

Answer:
The file review should highlight reputation management as the main objective, not just “winning” the litigation. Settlement or alternative dispute resolution should be considered in your advice as these may better serve the client’s goals than pursuing the court claim. Explore confidentiality mechanisms (for example, settlement terms containing confidentiality obligations or a consent order), weigh costs and risks of trial against reputational impact, and diarise any limitation dates to preserve the client’s position while pursuing settlement.

From File Review to Focused Analysis

Once facts and objectives are clear, frame the legal issues and the evidence you will need to support each point. A simple way to do this is to list:

• the source of legal rights/obligations (contract, statute, common law duty)
• the cause of action or legal mechanism (e.g. damages for breach, termination clause, ADR clause)
• the elements to be proved or complied with
• the facts that make up each element
• the documents/witnesses that will prove each fact

Then overlay outcomes and constraints using SCOC mapping. This ensures your advice fits what the client wants and what is feasible, rather than just what is legally possible.

Exam Warning

For SQE2, remember that not all client objectives will be clearly stated. Look for evidence in the file (e.g. urgency in emails, reference to deadlines, competitive pressures) and confirm key objectives before advising. Failing to acknowledge commercial priorities can lose marks. Also check who is instructing you has authority, verify any assumptions in writing, and keep your advice in clear, modern English. Avoid vague phrases (e.g. “substantial damages” or “in due course”); give ranges or dates wherever possible.

Practical Tips for File Review

• Use a blank sheet to create a chronology or main themes as you work through the papers.
• Summarise each document's relevance to the client’s objectives.
• Check for inconsistencies or missing information.
• Make a list of action points or clarification questions.
• Keep a dedicated section for identified risks and your initial view on next steps.
• Create a short action plan with responsibilities and target dates; diary critical deadlines.
• Record constraints (timeframes, budget, stakeholders, risk appetite) so options reflect reality.
• Use precise, inclusive language and avoid jargon; write in the active voice for clarity.
• If commercial context is central, check authoritative sources (e.g. Companies House filings, press reports, market data) to validate what the file suggests.

Worked Example 1.3

You are sent an email chain showing a client negotiating a supply contract. The emails mention a “critical delivery deadline” impacting the client’s own obligations to their customer, but the draft contract does not mention this deadline.

Answer:
You should spot the gap between the client's commercial context (the importance of timely delivery for their business) and the contract’s current terms. This should be raised as a key issue for advice and possible contract amendment. Propose adding a delivery timetable, consequences of delay (liquidated damages or step-in rights), and alignment with the client’s downstream obligations to avoid back-to-back exposure.

Worked Example 1.4

A founder is selling shares in a tech company. The buyer wants broad warranties but the founder’s constraint is limited time and exposure. There is pressure to sign before a product launch.

Answer:
Record the objective (close before launch) and constraints (limit liability, minimal time for negotiation). Advise on narrowing warranties to material issues, using a disclosure letter to manage risk, agreeing liability caps and baskets, and considering warranty & indemnity insurance. Ensure the disclosure exercise focuses on high-risk areas (IP ownership, data protection compliance, key contracts) given the time pressure, and include a clear timetable in the action plan.

Worked Example 1.5

An SME client has a strong contractual claim but cash flow is tight and their main customer is the defendant. The client fears losing future business if they litigate aggressively.

Answer:
Identify the commercial objective (preserve relationship) and constraint (cash flow). Consider a staged approach: send a measured letter before action, propose mediation, explore instalment payments or a credit note, and maintain confidentiality in settlement terms. Evaluate non-legal impacts (relationship, reputation) and legal risks (limitation, costs). If appropriate, advise on a Part 36 offer or a Tomlin order to keep terms confidential while securing payment.

Building Client-Centred Options

When options are developed, involve the client in decisions on outcomes (“go/no-go”) and explain process choices (“way to go”). For each option, weigh costs, benefits, and risks in context:

• legal merits and evidence gaps
• time to deliver and key deadlines
• financial impact (fees, cash flow, exposure)
• relationship and reputational effects
• operational disruption and resource demands

Anchor your recommendation to the client’s objectives and constraints, and give a clear rationale. Clients expect pragmatic solutions, not just statements of law.

Writing Advice that Fits the File Review

Advice that follows a structured review is clearer and more persuasive. Use short headings, numbered paragraphs where necessary, and modern, precise language. Avoid archaic terms or inflated adverbs. Keep sentences concise and use the active voice unless a passive structure serves a clear purpose (e.g. neutrality). Always check the advice reflects objectives and constraints noted in your review. In closing, set out:

• what you recommend and why (linked to objectives)
• the main risks and how to limit them
• the agreed action plan
• any assumptions or further information needed

Ethics and Professional Standards

Ensure the client is in a position to make informed decisions and that your advice is honest and independent. Do not conceal material risk, and do not act outside your authority. If the matter involves sensitive commercial information or vulnerable parties, use inclusive and respectful language. Confirm key points in writing and keep a proper record of discussions and decisions.

Revision Tip

When preparing for the SQE2 exam, practise file review with a blank summary template: record client objectives, factual summary, commercial context, key issues, risks, and next steps. Add a section for constraints and your action plan. Practise mapping facts to legal issues and identifying the evidence you would need to prove each point.

Key Point Checklist

This article has covered the following key knowledge points:

• File review is essential for identifying client objectives, key facts, and issues.
• Clarifying client objectives enables focused and relevant advice.
• Understanding the commercial context is essential for practical, client-focused solutions.
• Legal issues and commercial/practical interests must both be identified and prioritised.
• Risk spotting and prioritisation are essential in planning actions and advice.
• Effective file review structures your approach to SQE2 advice, case and transactional scenarios.
• Constraints (budget, time, relationships, risk appetite) shape viable options and should be captured early.
• A short, clear action plan converts analysis into progress and helps manage deadlines and expectations.
• Mapping facts to law and evidence ensures advice is provable and targeted.

Key Terms and Concepts

• file review
• issue identification
• client objectives
• commercial context
• risk spotting
• priorities
• BATNA
• chronology
• constraints
• action plan
• SCOC mapping