The new regulations requiring law firms to publicly display their prices will be going ahead – rules that apply to probate work. The Law Society’s Michael Lonergan summarises the new requirements and where more advice can be had
Consumers will go online, and with just a few clicks get a good up-front indication of the price of probate services from several solicitors’ websites, without the need to call or visit any of them. That’s essentially the vision of the Solicitors Regulation Authority (SRA) for law firms, and it will take effect from December 2018.
In 2016, the Competition and Markets Authority (CMA) completed its market study on the legal services market. Its final report concluded that the market was not working well for consumers. This was due to information asymmetry – an economics term for solicitors knowing more about legal services than consumers – and it recommended that regulators act to ensure consumers receive more up-front details about legal services. This would help consumers shop around and make more informed choices.
It is also worth noting the long-term trends. Consumers now expect more – in terms of information and services they will receive – than they did just a few years ago, and legal services should not feel exempt from this.
However, the Law Society informed the CMA and the SRA that putting information on websites is not the best way to help people make informed decisions. There are many things clients need to know about the services they will get and many of those are client-specific – generic information on a website cannot capture this complexity. We argued that firms must be allowed to develop the best ways to give clients the right information.
The SRA announced that, following its consultation, it would proceed with its main proposals. This includes the key requirement that firms publish price and service-related information on their websites from December.
The price publication rules apply to probate work, defined by the SRA as ‘the collection and distribution of money, property and other assets belonging to a person following their death, where these are within the UK and the matters are not contested’.
The rules also apply to immigration law, residential conveyancing, employment tribunal services and business premise licensing applications.
What will be required?
We encourage you to read the SRA’s published draft transparency rules.
The following information must be published on your firm’s website for each area of law selected by the SRA that you practise in:
- the total cost of service or, where not practicable, the average costs or range of costs
- the basis for your charges, including any hourly rates or fixed fees
- the services included in the price stated, including the key stages involved, and the likely timescales for each
- a description of the experience and qualifications of those carrying out the work.
If your firm doesn’t have a website, you must make the above information available on request – for example via email or a leaflet.
All firms, regardless of their areas of practice, will also need to publish details of their complaints procedure and, from early to mid-2019, display a new digital badge on their websites showing they are regulated by the SRA.
The SRA cited research by the Legal Services Board that showed that price competition could be improved, and that there were ‘significant unexplained differences in price quoted for the same work’.
The SRA also wants to work with other regulators in the hope of creating consistent requirements for the whole regulated market. The Council for Licensed Conveyancers and CILEx Regulation have also outlined their own similar measures for transparency in probate matters.
Implications for firms
There is obviously a lot to consider here for private client firms. But the SRA has made a few points clear.
We know these changes will result in significant burdens for firms
You can charge the prices that you want – just make the charges transparent. The SRA said it felt the rules would give an opportunity for firms to be clear about why they charge more than others.
You do not need to adopt any specific charging models. But whatever approach you use, make it transparent to clients.
The SRA recognises that information cannot be accurate for all clients in all situations – it says the focus is on information, to give clients a good up-front indication of the likely costs of a service.
The SRA also made it clear that you can provide prices based on a standard case, and that additional services can incur additional fees.
We know these changes will result in significant burdens for firms. The Law Society will be assisting members to comply with these new rules, and further announcements will be made in the coming months.