Firms have high degree of flexibility in implementing price and service transparency changes

Both the SRA and CLC confirmed at the Legal Eye annual conference held earlier this month that firms have a high degree of flexibility in deciding how to implement the changes regarding price and service transparency that firms are required to make by 6th December.

Delegates at the conference broadly accepted the need for consumers to have access to better information, and for that information to be much more readily available, in order for potential clients to be able to make more informed decisions about choosing a legal services provider including the likely cost of that service.

However many firms remain unsure as to how to represent these changes in practice and, principally, what changes to make to their websites in order to meet the requirements.

Providing data and information that allows accurate comparisons

Whilst the concept of being able to provide information that allows potential clients to ‘compare apples with apples’ is no doubt a good one; implementation is proving not to be straightforward. Templates have been made available, both by the regulators and the Law Society, and so on the face of it firms have all the tools they need to prepare for the December deadline.

In practice however the majority of firms have some critical decisions to make before deciding whether they can just complete the template and upload to their website – or whether a more considered approach would be best.

The key dilemma as widely expressed across the industry is in avoiding a scenario where consumers focus almost entirely on price, rather than on the overall value that a firm is offering including the level of customer service to be expected, the expertise and technical know-how required and the reassurance of employing professional advisers backed by a strong and trusted brand.
In essence this decision forces firms to focus on an important issue which has always been there: in a market where there can be huge differences in the prices charged for what is ostensibly the same type of legal job; how do firms justify their prices?

The answer, of course, is demonstrating why the price is fair. This can include explaining the complexity of the advice required including why using an experienced (and more expensive) adviser could save a lot of heartache and expense further down the line.
Conversely there may be occasions when a more straightforward conveyancing transaction can, and should, cost a lot less and can be offered on a more ‘commoditised’ basis. This is seen in operation currently, for example, with panels offering conveyancing services where price comparison-style websites offer obvious comparisons between prices by literally listing providers side by side with prices clearly displayed.

Can’t we just quote?

Areas such as conveyancing and personal injury work have led the way in this area being used to working very much on a fixed price / fixed percentage offers and, on occasion, on a ‘no win no fee’ basis.

However what should a firm do about providing the ‘indicative’ pricing required where a job is more complicated and where it is less easy to offer a simple ‘pick and mix’ menu of prices? Or where a firm has multiple offices and charges different fees according to the different geographical locations of the offices?

Granted; some may argue that it is in a lawyer’s nature to want to know the full details of the case in hand before offering a quote or cost estimate and that this can be frustrating to a customer making an initial enquiry who just wants a ‘ball park’ idea of costs.

Given that the regulators’ intent is to simplify the pricing of legal services and to give consumers enough information to enable them to shop around this creates an inherent tension. Many lawyers, and particularly those representing small law firms, have argued that quoting for each case on an instance-by-instance basis taking into account all the pertinent circumstances is the best way for clients to get accurate information on what their matter might cost and that this may meet the transparency requirements in a far more precise way than by providing what can be seen as a more general layer of pricing information before clients reach the formal quote stage.

Be that as it may, the regulators’ requirements mean that firms will still need to provide indicative pricing information, along with details of service levels and of the personnel who may deal with the work, upfront on their websites before proceeding to detailed quote stage.

Representing price

Firms may present a range of prices based on, for example, a typical sale value; an average price, or provide an online quote calculator. They may also choose to post a ‘price list’ for common additional costs in order to provide a more transparent idea to the customer of the items they may end up paying for.

Whichever route is chosen, the regulator will look to see whether the way the information is represented meets the spirit of its reforms – that is, broadly does it allow the ‘apples with apples’ comparison. By their own admission the regulators will not have the resources to carry out “dawn raids” on firms on 7th December in order to check whether firms are fully compliant. They will however be working closely with LeO to investigate any obvious trends and increases in complaints relating to individual firms and will also take up complaints made by members of the public by way of visits or conversations with the firm concerned.

Service and staff

Paul Saunders, Managing Director of Legal Eye, says: “Although many firms are focusing on price this is about overall transparency. It’s about refocusing on what clients a firm wants to attract, being really clear about what those clients want, and representing information that meets those needs. For example, where a client wants a high degree of contact, face to face or on the phone on a complex high value matter which is of financial and emotional significance to them then they are likely to recognise the value of paying a higher fee than they might get elsewhere in order to secure the right level of expertise and service.

“It’s about being clear as to the value to the client – and to know that we need to understand what drives them. Sometimes this will be purely cost but given we know that the research shows that clients also value good communication and customer service we need to price accordingly in order to deliver that level of contact.”

The requirement to include more detail on what staff may be working on particular matters gives firms a chance to showcase their particular skills and expertise. The regulators have confirmed that there is no need to specific exactly which individual will be working on each matter, and neither is a lengthy ‘CV’ is needed for each – which may be especially difficult for a volume conveyancer for example – but that an indication of the level of experience and qualification will be needed.

Firms also need to provide a timeline or representation of key stages in a matter which clearly set out for customers what’s involved in the matter. This is not intended to be a document against which clients can ‘hold’ their lawyers – however, how much importance the timelines are given by clients will remain to be seen as the months progress.

Need help?

Legal Eye specialises in risk and compliance advice for law firms always combined with an understanding of the realities of running a law firm and of the commercial needs of the firm as a business.

We’re currently helping many firms not only to ensure they are compliant but also to make the most of the commercial opportunities being presented by the price and service transparency requirements.

Contact Jody Evans on 07384 461 414 or at [email protected] for more information.

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