Crystal clear

The Legal Services Board (LSB) has approved new transparency rules proposed by the Solicitors Regulation Authority (SRA) which will require law firms to publish more information. The changes will come into force in December 2018. What does this mean for firms?

Why has the SRA proposed these changes?

The Competition and Markets Authority completed its study on the legal services market in 2016. It concluded that the market was not working well, due to the lack of upfront information for consumers. It recommended that all frontline regulators take action to improve the information available, in order to enable consumers to make more informed decisions.

These changes may result in significant burdens for some firms

The SRA consulted on new price and service transparency proposals in late 2017, along with the other legal service regulators. The Law Society opposed the changes: solicitors already work to provide the right information at the right time, and simply putting more information on a website may not help in improving choice for consumers. We made clear that the SRA should allow solicitors to respond to clients’ needs and help them make truly informed decisions.

The SRA announced in June 2018 that it would proceed with its main proposals. Firms will be required to publish price- and service-related information on their websites from this December for a range of services including residential conveyancing, employment tribunal services, immigration (excluding asylum) and probate. The LSB has recently approved the SRA’s proposals.

What will be required?

The SRA Transparency Rules will require the following information to be published on your firm’s website for each area of law from December:

• the total cost of service, or where this is 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 and the cost of likely disbursements, and where this isn’t known, the average cost or range of costs
• a description of the experience and qualifications of those carrying out the work
• if conditional fee or damages-based agreements are used, the circumstances in which clients may have to make any payments themselves for your services.

If your firm doesn’t have a website, you must make the above information available to a client on request, for example, through email or a leaflet.

All firms, regardless of area of practice, will also need to publish details of their complaints procedure and, from 2019, display a new digital badge showing they are regulated by the SRA, on their websites.

What should you consider for your firm?

These proposals create some clear challenges for firms. However, the SRA has made a few points clear.

You can charge what you want – just make it transparent to clients. The SRA believes the rules present an opportunity for firms which want to charge higher fees to be clear about the service they are offering for that ad ditional money.

You can also charge how you want. You don’t need to adopt any specific charging models or approaches. Again, whatever approach you use, you just need to make it transparent to clients.

Whatever approach you use, you just need to 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 that gives clients a good upfront indication of the likely costs of a service. The SRA also said that you can provide prices based on a standard case and make it clear that additional services can incur additional fees.

The new requirements may not, on their own, always assist consumers in making more informed decisions. There is no guarantee that consumers will read, and sufficiently understand, all the information published.

The new rules are minimum requirements. You are therefore free to publish further information on your website if you wish to do so. This may help to demonstrate the value that consumers get from using your firm and your experience and expertise across relevant practice areas. This could help to differentiate you from competitors. For example, you could provide customer reviews or testimonials, or any relevant industry publications.

The required information must be clear, accessible and prominent on your website. You may wish to consider your website capabilities and whether you can easily update this content.

We know these changes may result in significant burdens for some firms. The Law Society has put out a Practice Note on how you can comply with the new minimum requirements, and further announcements will be made in the coming months.