Only small percentage of firms openly publish their fees
15 April, 2016
New research has found a significant lack of transparency over the pricing of common legal services, with those providers who publish their rates or offer fixed-fees generally being cheaper than law firms that do not.
The research commissioned by the Legal Services Board (LSB) showed dramatic variations in the price of fees amongst UK law firms, with some practices charging many thousands of pounds more than others for the same type of service.
The LSB said that the research is the first proper study of what consumers actually pay for legal services and provided a baseline against which the impact of regulatory reform could be judged in future.
The study found that only 17 per cent of firms displayed their prices on their websites, with licensed conveyancers and Will writers were more likely to publish figures than solicitors.
The research revealed that there was no clear pattern when looking at how prices varied by size of firm, as well as little to know difference between alternative business structures and traditional practices.
Firms in the south-east charged significantly more than those in other parts of the country, and firms in deprived areas quoted lower prices than those in more affluent locations.
Around two-thirds of firms said their prices had stayed about the same over the past year, while 29 per cent said they had increased and just 4 per cent said they had taken the decision to reduce their fees.
In the study conveyancing work was dominated by fixed-fee arrangements with 80 per cent of firms using this system for all their conveyancing work.
The median cost of sale and purchase of average freehold properties was put at £1,250, although the highest fee recorded was £6,400, and the lowest £425.
For family work, firms generally charged a fixed fee for the simpler, uncontested work, but as cases became more complex, with children or assets in dispute, more firms said they would charge either an hourly rate or provide an estimate of the total cost.
The median cost of a complex divorce where assets were in dispute but which settled at mediation was put at £2,000, although one firm quoted £34,000.
In the private client section of the research, the vast majority charged a fixed fee for a Will, but for estate administration, the most common approach was an hourly rate. Seven in 10 solicitors said they offered flexible payment options.
The LSB has said it is not pushing for firms to publish their fee structure as the Competition and Markets Authority (CMA) is currently studying the legal services market and was better placed to comment on whether mandatory publication would be necessary in future.
Caroline Wallace, strategy director at the LSB, said transparency and fixed fees were good for firms because consumers would be more confident about choosing them.
LSB chief executive, Neil Buckley, added: “There is still some way to go before all consumers can be confident of finding the legal service they need at a price they can afford.
“Firms who are yet to adapt will have to look at what their competitors are providing. This is a market with huge potential for delivering a better deal for consumers.”
If you would like advice on setting competitive fees for your practice then our experienced team at Watson Buckle can help. We can assess your firms finance and help you set fees at a competitive level to maximise your fee income.
If you would like to know more about our accountancy services for the legal sector, please contact us.