For Lawyers

The Price is right - sometimes

The SRA has been consulting for some time in relation to fundamental changes to the way that solicitors are regulated. One the papers is entitled – Looking to the Future: Better information, more choice. As the name suggests, this is all about providing consumers with as much information as possible, including pricing, so that they can make an informed choice about which solicitor to choose.

This is certainly a positive development. There are many myths about lawyers and legal work, especially in relation to cost. Fear of the unaffordable is what deters many from seeking legal assistance. So, proposals that solicitors must publish prices must be welcomed – up to a point.

The consultation suggests that prices be published in relation to 8 areas of work –

1.       Residential Conveyancing,

2.       Family – undefended divorce and financial disputes arising from divorce,

3.       Will drafting,

4.       Probate/Estate Administration,

5.       Drafting a lasting Power of Attorney,

6.       Motoring Offences,

7.       Employment Tribunal

8.       Personal; Injury work for Claimants

Some of these areas of work are do lend themselves to the clear publishing of prices on a firm’s website. Firms have been quoting a fixed fee for conveyancing work for years. The same can also be said for undefended divorce, will drafting and drafting a Power of Attorney. In these cases, the work can be commoditised and there will be little variation in price. So, publishing that price should be encouraged.

Other areas of work are more troublesome. It is impossible to predict what work might be involved in a financial dispute arising out of a divorce. This will depend entirely on the complexity of the finances and the level of acrimony between the parties. The work required to administer an estate will depend on the size and complexity of that estate. Some firms might charge a fixed fee for this work regardless of what work is done, in which case that fee can be published. But we are a long way from compulsory fixed fees so this will not be the norm.

Claimant Personal Injury work raises entirely different concerns. This work is almost entirely contingent. A solicitor acting on a conditional fee agreement will only be paid anything if the claim succeeds. They will be entitled to charge a ‘success fee’ payable from any recovered compensation. In all of these cases it is not feasible to publish a standardised price for the work.

In fairness the consultation acknowledges this –

‘However, where it is not practicable to give overall costs at the beginning, any costs that are known such as hourly rates, fixed fees for certain elements, the charging basis for unbundled services etc. should be stated. It will be good practice to list factors that could increase or decrease overall costs.’

My concern here is that this will involve publication on a website of a partial picture. A website provides a single piece of information which cannot be tailored to the particular case. For many different reasons the price published might ultimately be very different from the actual costs due to the unpredictability, especially of litigation. Publication of an hourly rate means nothing in the absence of reference to the number of hours involved. If the final price is very different from the published price then client’s will complain – for understandable reasons. Firm’s should be required to meet clients and explain the basis on which fees are charged. Clients must be given pricing information but this should be based on their particular case and updated as the matter progresses. This has been a requirement for many years.

Producing a single price on a website is likely to become very confusing.

There is no easy answer. Lawyers do need to be open about pricing. But, unless that price can be fixed, this should be a matter for discussion with clients. It is not really helpful to require firms to try and come up with an artificial figure on  website,  that might ultimately be very different from the final bill.

 

http://www.sra.org.uk/sra/consultations/lttf-better-information-consultation.page

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