New guidance, published on 1 February 2020, has been developed to improve price transparency for legal services to help consumers in Scotland make better-informed choices. The guidance comes into effect on 1 April 2020.
Our questions and answers below provide more information about the aims of the guidance and what it will mean for you and your firm.
The new Law Society of Scotland Guidance has been developed to improve price transparency for legal services and encourage solicitors to proactively publish information to help consumers in Scotland make better-informed choices.
It has been recognised that some consumers may have the perception of legal services being too costly for them. This may result in the consumer approaching an unregulated provider or avoid seeking any kind of legal advice or help. Price transparency may go some way to address that misperception.
Unlike in England and Wales, where the Solicitor Regulatory Authority (SRA) has introduced a set of rules on price transparency, the Society’s Regulatory Committee decided that Guidance would be the most appropriate way to introduce price transparency for legal services in Scotland.
We consulted members on pricing transparency in 2018 and, in developing the Guidance and accompanying examples on pricing, we also sought views from solicitors within our policy sub-committees, who work across a wide range of legal practice areas, and stakeholder organisations, including the Society of Chief Officers of Trading Standards in Scotland, to ensure the guidance will work in practice.
As well as assisting potential clients to make a more informed choice, price transparency provides a marketing opportunity for firms to promote their services.
In October 2018, following the price transparency consultation, the Society’s Regulatory Committee considered several options. This included introducing rules, a route which the SRA has taken in England and Wales. However, the committee thought the introduction of rules at this time would be disproportionate and overly prescriptive and decided guidance was the preferred and proportionate route to increase transparency around pricing structures. It also allows the effectiveness of the guidance to be reviewed over time and any amendments that may be needed following review, can be made more easily.
Guidance does not have the same status as a rule and it is not compulsory to follow Guidance. However, while not a practice rule, all solicitors are encouraged to follow the guidance as a matter of best practice. In the event of a complaint being raised in relation to the guidance, a solicitor would have to justify their reason for not following it.
Please refer to purpose and status of guidance on our website for further information.
The Law Society carried out a consultation with its members on price transparency in 2018. The Regulatory Committee also sought views from members of the Society’s policy sub-committees, who work across a wide range of legal practice areas, and stakeholder organisations, including the Society of Chief Officers of Trading Standards in Scotland in developing the guidance and accompanying pricing examples.
As price transparency and the guidance relates to regulation, the decision to introduce guidance, and the approval of that guidance, has been made by the Regulatory Committee of the Law Society. The Regulatory Committee is responsible for regulatory matters and is independent from the Society Council in terms of section 3 of the 1980 Act.
However, the Council recognises and accepts the need to introduce the guidance and the benefits this will bring, both to the consumer and the legal services sector.
The guidance applies to all consumer-facing legal practice areas.
While the examples within the guidance focus on a small number of practice areas - employment, conveyancing, wills and family - we hope they will prove helpful to firms in developing a pricing guide covering other areas of work.
The only exception is where the matter is solely covered by legal aid.
If your firm solely does legal aid work, you do not need to provide this type of information. However, if your firm provides a mix of legal aid and fee-paying work you should provide price information on the fee-paying work.
No. The price transparency guidance is aimed at solicitors' firms which provide legal services directly to the consumer. It may still be an option to consider for your business.
This decision lies with the firm, for example, this may be the client relation partner / manager or the person within the firm who is responsible for marketing.
Even if your firm does not have a website, you should still have price information available for any potential clients so they do not have to make an appointment or consult a solicitor to find out more about the costs of your firm’s services.
There is no need to have specially designed leaflets created, a simple print out will suffice as long as the pricing is easy to understand and readily available for people. For example, you can have a price list indicating a typical cost for a case or an hourly rate for particular types of work, available to read in your reception area. Our examples of a price guide may be helpful before you decide what approach is most suitable for your firm.
Another option may be a web-based online quote calculator which allows consumers to compare costs.
No. These are examples only of how you may choose to publish price information. They are not designed to suggest which model you should use for any given service. This is for each firm to decide, based upon their own judgment. You may choose to use one of these model examples or you may use your own model, which should also contain the required information on VAT, services included etc. The price guide should also make clear that the fee charged will be based on the client’s specific circumstances.
Legal work is by its very nature variable and individual cases differ in their complexity and in the length of time they take to conclude. However, the same principle applies to how you set out your ‘terms of business’ or ‘terms of engagement’ letter for clients on the potential cost of their particular case.
You may prefer to publish a list of ‘typical’ or ‘average’ case costs for particular types of work, fixed fees or you may have an hourly rate. It is important that it’s clear that these are an indication of the costs involved and, in the case of fixed fees, what is included in the fee, so clients can be as well informed as possible prior to speaking to a solicitor about their particular circumstances. Your firm’s price guide should also make clear that any fee charged will be based on the client’s specific circumstances.
Price is only one aspect that consumers consider before appointing a solicitor. Other considerations might be - the quality of the service, speed and efficiency, reliability or your proven expertise in a given area of the law. How consumers/clients value these factors (quality, expertise, price etc) will vary. Your firm should understand what motivates the particular client group that you are trying to attract and promote your services accordingly.
The guidance recommends that firms publish an ‘average’ or ‘typical’ price for the service. Solicitors should use their own judgment on what is the best approach for their firm. A typical price would be one that you would commonly apply to particular types of work. An average price for certain types of work is based on calculating the average price from a reasonable number of cases at the firm.
Any solicitor firm which publishes a fixed fee must stipulate what is included and, importantly, what is not included within that fixed fee so that consumers can be clear on what costs will apply to them.
Solicitors will still be expected to provide their client with a clear terms of business letter, including fees/costs, which apply to their particular case and the level of service they can expect.
Yes. Although it is not a specific requirement, it is good practice to provide a price inclusive of VAT. However, whether you provide a VAT inclusive or exclusive price, you must set out how VAT is calculated.
While the guidance has been published on 1 February 2020, we would expect to see firms implementing the necessary changes by the start of April 2020.
Guidance does not have the same status as a rule and it is not compulsory to follow guidance. However, while not a practice rule, all solicitors are encouraged to follow the guidance as a matter of best practice. In the event of a complaint being raised in relation to the guidance, a solicitor would have to provide a reason for not following it.
As with any complaint, it would be a matter for the Scottish Legal Complaints Commission to decide how to proceed.
This page will be updated as required. If you have any questions about the implementing the guidance at your firm that are not answered in our Q&A please contact our professional practice team at firstname.lastname@example.org