Warnings regarding impact of transparency proposals on legal sector
30 January, 2018
The Law Society has warned law firms that plans to publish prices on websites could turn the consumer focus to rock-bottom fees rather than a secure service.
Late last year, the Legal Services Board (LSB) gave the Competition and Markets Authority (CMA) the green light to proceed with plans to improve transparency in the legal sector.
This includes forcing legal services providers to display information on fees and associated costs and the development of comparison sites to allow customers to compare providers in one place.
The LSB said the measures would ensure there is better information available for clients in relation to price, quality, redress, and regulation.
But the Law Society believes an ‘umbrella approach’ to price publishing would harm the sector’s ability to provide a safe service.
“There is no ‘one size fits all’ – these are complex issues that need careful unpicking. In this instance the regulatory approach is inflexible and risks driving competition on price alone, rather than on other important considerations such as quality or protections,” said Law Society president Joe Egan.
“Legal issues can be extremely complex so publishing a raft of information without proper context – as the regulator is proposing – may confuse rather than aid consumers.”
In a recent London Economics survey, consumers were asked to pick a law firm to instruct based on price alone. The participants were then told that many of the services they picked were not regulated and did not have compulsory insurance.
“The majority of participants believed that all legal service providers were regulated in the same way due to the importance of the service provided,” researchers said.
“In the behavioural forum, once an event that generated harm occurred, participants that had previously selected the cheaper provider… often changed their mind selecting instead the provider that was labelled as a ‘solicitor’ and stated that they were regulated by the SRA.
“Participants’ reasoning was that they valued solicitors’ skills, choosing a regulated provider provided them with peace of mind and that they felt they would have a higher level of protection from the ‘solicitors’ regulator’.”
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