Will the proposals for fee transparency really improve consumer access to legal services?

The process of implementing transparency within the legal sector applies not only to fees but also requires a clear process for customer complaint redress to be introduced.

The measures put forward by the Competition and Markets Authority (CMA) which were subsequently agreed to by the SRA, will begin in specific areas of the legal system – including conveyancing – with the hope that other areas may follow suit. The requirement for fee transparency will require publication of prices as well as clearer information in regard to services provided. This could be done via the firms’ website or physical documentation.

Whilst the availability of estimated costs may be nothing new for some firms, the recommendation for an online digitised process, which would show fees and allow for customer ratings,[1] seems to fit better within contemporary society, both reducing the potential work involved and creating an increase in competition. This increased level of information would reduce asymmetry between new entrants to the legal services market, effectively levelling out the playing field for providers, regardless of size. The confidence from the reduction in asymmetry would not only allow for consumers to get more value for money, a key aim of the CMA recommendations[2] which has been acknowledged by the SRA[3], but also to view peer reviews on the quality of service.

However, there has been a reported lack of alignment between the experiences of solicitors and consumers in terms of the quality of service provided. Within the legal sector, 80% of solicitors believe they are delivering above average service whereas only 40% of consumers agree[4]. It is also worth acknowledging that only 20% of consumers are being asked to complete client satisfaction surveys,[5] a factor which could be influencing the result for the better or worse. In light of this early criticism, the profession as a whole might have to quickly learn the art of managing the expectations of the consumer.

The nature of conveyancing can lend itself to set price structures. Many firms within a comprehensive 2014 study offered fixed fee conveyancing at around 74%, with the majority of the remaining offering a combination of both fixed fees and hourly rates (22%.)[6] As well as implying that it would be a prime case for fees to be stated via a publicised medium, for consumers, any fear of price discrimination would be unfounded. The decision to increase transparency and competition is against a trend seen in other countries such as Kenya where prices for conveyancing have been fixed with costs of charge filing having increased by up to 40%, seen by some as above sustainable levels[7].

The aim to increase transparency and competition does, of course, bring risks of its own.  As well as unhealthy competition put forward by the BSB 2017 paper[8], a race to the bottom was also highlighted as a potential problem. The BSB specifically identified that focus on fees could create a price war or collusion to fix prices.

The fee transparency and market comparisons success partially depends on the consumers’ ability to choose the service they want from the pre-published mediums. Even though the requirements state that lay language should be used, the correct identification of services required might not be realistic, with the market and industry created around the comparison sites expected to fill such potential shortfalls. Additional unexpected costs due to non standard transactions imply that though the fees could be stated, as is currently the scenario, only during the process would additional fees become apparent.

Are we heading for Compare the Legal Market? Time will tell. Though as has always been the scenario, I expect recommendations, networking and strategic partnerships will only be complemented by the transparency requirements, and continue to be of importance. The movement toward a more consumer driven market and consumer empowerment has been requested by the CMA, and regulators have already started to take action. The increased availability of information of fees and the previous experience of consumers seem to be able to succeed at empowering consumers. Though will it be a success by all, a handful of proactive conveyancing firms taking advantage of their core competencies or are the systems too entrenched? The gains available are not only open to consumers but also the legal profession.

 

[1] https://www.gov.uk/government/news/plans-published-to-make-it-easier-to-shop-around-for-legal-services

[2] Para 4 https://www.gov.uk/government/news/plans-published-to-make-it-easier-to-shop-around-for-legal-services

[3] SS.30  https://www.sra.org.uk/sra/consultations/consultation-responses/cma-report.page

[4] The changing legal services market SRA https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi64qHS59PZAhUDD8AKHXcGAvcQFggsMAA&url=http%3A%2F%2Fwww.sra.org.uk%2Frisk%2Fresources%2Fchanging-legal-services-market.page&usg=AOvVaw2kGCAYQCqE-fL0n3e0grO_

[5] Consumers less satisfied with legal services, YOUGOV 2013

[6]Conveyancing thematic study , full report 2013 https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjjqKWM_NLZAhVHKMAKHdwSBeEQFgg7MAE&url=https%3A%2F%2Fwww.sra.org.uk%2Fdocuments%2FSRA%2Fresearch%2Fsupervision-thematic-study-conveyancing-2013-full-report.pdf&usg=AOvVaw0gUagoUHf19wIRgGD1rIyt

[7] https://www.lawgazette.co.uk/features/law-in-kenya-african-leader/5055605.article

[8] Law Society Gazette  2017   Issue 40, November  News News: Bar 2017: Chambers fear ‘price war’ and ‘collusion’ over fee transparency – (2017) LS Gaz, 13 Nov, 13 (1)

Today's Conveyancer
X