Frauds after Mishcon
Trevor Hellawell of ExL Practice Development
Several months after the Mishcon decision, practitioners are still trying to come to terms with its conclusions
Debra Malpass is the Head of Research and Analysis for the Solicitors Regulation Authority, the official body responsible for setting standards for solicitors and serving the public interest. Backed by years of experience in both policy engagement and implementation, Debra recently delivered an expert talk on Emerging Risks at the Today’s Conveyancer roadshow. In this interview, Debra tells Today’s Wills and Probate her thoughts on price transparency in the legal market as well as sharing her advice on protection against fraud.
Debra, in your opinion, what are the biggest changes in consumer behaviour in relation to legal services over the last few years? How do you think this will change in the future?
People are now more likely to shop around and search for the best value. But when compared to other sectors the numbers are still quite low. Only a quarter of people shop around, with recommendation still the most common way to choose a law firm. As people become savvier and use the internet across all areas of their life, they are likely to demand more online information about resolving their legal problems.
We want to help that process by making sure we – and law firms – publish better information about legal services. This will not only help people choose the right services that meet their needs but also create a more open, competitive legal market, which benefits us all.
The report from the Competition and Markets Authority has received mixed feedback in the legal market. What impact do you think the CMA report will have on price transparency?
The CMAs main concern about the legal market was the lack of useful information to help the public make good choices. This includes fewer than one in five solicitors advertising their prices online. The public rightly expects to be able to find the information they need easily. Many people routinely use comparison websites, and people also want to see what a service is likely to cost them when they look at a firm’s website.
We are aware that there are challenges with increasing price transparency. Legal services are not a simple product. Cases can be complex and not easily comparable. However, there are some areas – like conveyancing – where there are a lot of similarities and many firms already provide good information. We want to work closely with law firms and the public to understand what works well and is practical We are very much open to ideas, and plan to consult in the Autumn, so make a note in your diary.
What stance does the SRA take on price comparison sites and market comparison tools in general?
There are already several comparison websites in the legal sector and of course, we are all familiar with them elsewhere.
They are a useful tool and we provide core regulatory information to third parties, such as comparison sites, to make sure they are accurate and up to date. These websites can build on what they get from our register or others; adding in other information they think people would find useful in choosing a solicitor. Comparison sites are not the whole picture and many firms are doing a lot to publish prices in various ways.
How important will customer reviews for legal services be in the future?
It is important that we do not just focus on price. When people have a legal problem they generally don’t just want the cheapest law firm. The Legal Services Consumer Panel’s annual survey found that reputation has remained the top influencing factor when choosing legal services.
People have become comfortable with using customer reviews to help inform choices across a range of services. In a market that largely relies on people choosing services based on reputation and personal recommendations, customer reviews could be one useful indicator to help people with their choices. However, we do not think it would be for us to start coordinating the publication of reviews. Other quality marks that we could usefully provide could be logos to show that a firm is SRA regulated or that spell out what consumer protections are in place.
In the near future, what do you think the biggest challenges are for solicitors? What will the SRA prioritise in helping legal professionals overcome these challenges?
Every year we set out what we think are the main risks for law firms in our annual Risk Outlook report. We have just published our latest one. We have pinpointed eight priority risks, ranging from money laundering to dubious investment schemes. Clearly, firms need to take the lead on managing their own risk, but we want to help support them in understanding trends and what steps they can take to manage risks.
The risk of cybercrime is a major worry for a lot of conveyancing firms. We are seeing an increase in the amount of reports of money being lost to email modification frauds. Around half of these involve conveyancing. Our report sets out the sensible steps firms can take to help protect them and their clients. For instance, having clear processes in place around the exchange of bank account details. If a firm simply emails out bank details, they are making themselves and their clients vulnerable.
We have read about Evolve – can you tell us a bit more about it and how solicitors may become involved?
We are currently investing in improving our IT systems and processes. We want to make sure good user experience is central to that. From paying your practising certificate fee to authorising a new firm, we want to make sure our systems are easy to use and tailored to what you need. SRA Evolve is a virtual reference group and is one of the ways we are making sure that our users’ voice is heard.
There are three ways to become involved and help us get this change right. You can:
If you want to find out more, Debra recommends visiting: www.sra.org.uk/sra/news/sra-update-issue-62-evolve.page
What element of the conveyancing process do you think should be at the forefront of solicitor thinking – customer service, fraud protection, price, the speed of transaction, communication or something else?
These are all important elements of a conveyancer’s work and they are all linked. For example, in protecting their client against fraud, communicating well and processing the transaction swiftly they are giving good customer service. Communication about price should also be considered, as this helps manage people’s expectations and helps them to budget.
How can private client solicitors differentiate themselves from unregulated companies in the will writing and probate sector? What recourse do consumers have?
Solicitors are of course trained, qualified and regulated and all of that is important and gives people confidence in the service being offered. And they can tell consumers they are regulated by the SRA and explain the protections for their clients. If something does go wrong, all consumers are protected by the Consumer Rights Act 2015 but those using a regulated solicitor can also complain to the Legal Ombudsman or the SRA regulated firms carry professional indemnity insurance and in some cases, those using a regulated firm can claim compensation from the SRA.
We are doing work to see how we can improve public understanding of the protections in place if you are using an SRA regulated law firm. For instance, as mentioned above we are considering introducing logos that firms can use.
Against other regulators, how do you see your role?
We don’t see our role as against other regulators! The priority for all regulators is public interest and public protection, and what matters is that we work together to give everyone confidence in the sector. We all face similar challenges and work collaboratively to understand issues in the legal services market. Just last month, at our Trust and the market event, we brought together more than 100 people from regulators, government bodies, think tanks and law firms to talk about how we can regulate more effectively. Whether it’s assessing risk, building trust or taking enforcement action, we can all learn from each other.
We also work regularly with other organisations on research. For instance, we are currently working with the Bar Standards Board on research into criminal advocacy, and the Legal Ombudsman to understand how firms handle complaints.
Is the SRA expanding? Can solicitors expect to see a greater degree of oversight by their regulator?
We have been working hard to improve our service while keeping our costs down. It is important that we make sure we focus on the things that matter. We want to make sure we are stepping in where necessary to protect the public, while also cutting unnecessary bureaucracy so the sector can continue to grow.
Our indicators show that we are generally improving our service. For instance, in the last year, we have reduced the time taken to authorise a firm by around 35 percent to an average of 24 days. We have done this while reducing our headcount while absorbing inflation and cost rises rather than passing them on to firms.
When it comes to fraud prevention, should conveyancers do everything they can to negate the risk?
Yes of course! We know that conveyancers want to do everything they reasonably can to protect themselves and their clients against fraud. Clearly, the measures you put in place need to be proportionate, but it is in everyone’s interest – the law firm’s and the client’s – to protect against fraud. It is also important if the profession is to maintain wider public trust.
Whether dubious investment schemes, money laundering or the threat of cybercrime, fraud is a constant, ever-evolving threat to law firms. And given the money involved, conveyancing is an attractive target for fraudsters. They look to exploit gaps in process, so having the right systems and controls in place is important. It is also vital that all staff are trained to understand how to identify and prevent fraud from taking place. Many frauds, such as cybercrimes, try to dupe people as much as exploiting system or IT weaknesses.
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