From December 2018, all regulated law firms will need to publish certain information regarding pricing and services. The requirement falls under the SRA’s new Transparency Rules.
Regulated legal practices will need to publish the prices they charge and what is included for this price across the following practice areas:
For individual clients:
• Residential conveyancing (Freehold sale or purchase, leasehold sale or purchase, mortgages and re-mortgages)
• Probate (uncontested cases with all assets in the UK)
• Motoring offences (summary only offences)
• Employment tribunals (claims for unfair or wrongful dismissal)
• Immigration (excluding asylum applications)
For commercial clients:
• Debt recovery (up to £100,000)
• Employment Tribunal matters (defending claims for unfair or wrongful dismissal)
• Licensing applications for business premises (new applications or varying existing licenses)
What are the Transparency Rules?
The SRA’s Transparency Rules were approved by the Legal Services Board in August 2018, with the oversight regulator telling the Law Society Gazette:
“This is a significant first step in the SRA’s endeavour to improve transparency, through introducing targeted rules setting out requirements for service providers. In the long term, the LSB considers that this should help to promote competition and contribute to improving access to justice”.
Prior to setting out the Transparency Rules, the SRA conducted an independent initial study into price transparency in the legal services market of 4,001 consumers, 1,001 recent homebuyers and 1,146 law firms. The exercise showed that despite 71% of people saying they researched for an hour or more before selecting a law firm, only 15% were able to obtain pricing information without having to directly contact the practice.
The research showed that publishing pricing information helped people make good financial decisions. However, only 18% of law firms surveyed said they published their pricing on their website, 70% of which stated they did so mainly to make it easier for prospects to understand their services.
Statistics from the Legal Ombudsman show that 25% of all complaints it receives relates to costs, and the SRA hopes that its new pricing will reduce these.
Paul Philip, SRA Chief Executive, has stated in a press release:
“Publishing information on price, services and protections will not only benefit the public, but will also help those who deliver these services win business and connect with their customers. We are providing guidance and support for firms to assist with meeting the new requirements and making the most of the opportunities they bring”.
Objections to publishing pricing information
The move to making prices for certain services transparent has not been welcomed by all members of the profession. Research found that just over half of law firms (53%) did not publish their prices because they based their fees on the individual matter presented by the client. This is backed up by comments made on articles relating to pricing transparency in the Law Society Gazette, with many commentators stating furiously that even retailers are not ‘forced’ to display their pricing. One solicitor stated they worked in rural conveyancing and there was no such thing as a “standard conveyancing transaction” in their area. Price publication, they said, would lead no doubt, to less clarity, not more.
How law firms must display pricing information on their website
The SRA guidelines state pricing information must be in a “prominent location” on a law firm’s website. The information must also be “accessible, clearly signposted and easy for visitors to find”.
The other mandatory requirements for the pricing information display include:
• it must be stated whether prices include or exclude VAT
• it must be shown what is included in the price displayed – i.e. if there are fees outside of a fixed cost, these must be mentioned
• if a range of costs is published, the basis for the charges, such as a solicitors hourly rate must be stated
• the factors which will determine a final charge must be detailed
• online quote generators must produce a quote without the need for additional client contact – i.e. it cannot be a requirement for someone in the firm to call a client before a final quote can be delivered
• different ways of supplying services which affect the price must be stated clearly – i.e. if a face-to-face consultation will cost more than one undertaken by phone or Skype, this fact must be clearly noted
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