The Law Society of Scotland is asking the legal profession and consumer bodies for their views on price transparency for legal services.
The consultation, Price transparency – promoting consumer choice, aims to stimulate discussion within the legal profession and among other stakeholders, including consumer-interest groups, and is seeking views on the benefits and challenges of price transparency - if a lack of openness is detrimental to the consumer and competition with the legal services market and the factors which may already be driving change.
Scottish solicitors are required to provide specific information to clients, including an estimate of the total fee or the basis upon which the fee will be charged, plus VAT and foreseeable outlays. However, there is no requirement for solicitors or firms to publish pricing information proactively and in advance of any client requests, although firms can promote their firms’ services as they see fit, including on pricing.
The Law Society consultation is in response to issues raised in a Competition and Markets Authority report, which has stated that the lack of accessible information on pricing by legal services providers is a ‘significant hurdle’ for consumers and that the lack of transparency weakens competition between providers and means that some consumers do not obtain legal advice when they would benefit from it. The CMA view was that increasing transparency of price, service and quality was essential for consumers to get a better deal.
Carole Ford, non-solicitor convener of the Law Society of Scotland Regulatory Committee, said: “The Competition and Markets Authority takes the view that legal services regulators, such as ourselves, should require price information to be published to stimulate competition in the market. Before we can even consider such a step, we want to engage with our membership, the wider legal services sector and those representing consumers to gather a wide range of views to inform the direction of our work.
“There are both benefits and challenges to increasing price transparency and we are keen to hear a wide range of views before we consider any potential changes to the current rules on informing clients about the costs of legal services.”
Results from research, commissioned by the Law Society and carried out by Ipsos Mori, have suggested that about a fifth of consumers consider price to be an important factor when choosing a Scottish solicitor. Other UK-wide research has shown that the majority of consumers and small businesses think that legal services are unaffordable, with even the perception of unaffordability potentially acting as a barrier to accessing justice.
Carole Ford added: “At the moment people often place more reliance on recommendations from family, friends and peers so increased price transparency could encourage people to shop around as it would allow them to compare costs and make an informed choice. We know some clients are dissatisfied with their solicitor’s service based on charges either not being explained properly or being too high, so having clear and transparent pricing models could reduce complaints relating to fees.
“Some law firms already publish prices for legal services that could be considered as commoditised, such as conveyancing, wills or some family matters. However not all legal work lends itself to this kind of pricing. The complexity of some legal cases means they cannot be done for a fixed fee so it is essential to take this into account. Nor would we want to see any kind of ‘bait pricing’ where advertised costs are artificially low to attract business but in reality have very limited availability.
“I’d like to encourage those with an interest to take part and let us know their views on the potential benefits and where there may be drawbacks to such a move.”