Clients charged fixed fees in almost half of all transactions, survey finds

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23 May 2014

Elisabeth Davies

Davies: “small steps in the right direction”

Clients are paying law firms fixed fees in almost half of all transactions, while unbundling is becoming a significant feature of the market place, a survey for the Legal Services Consumer Panel has found.

While the percentage of all consumer transactions carried out under fixed fees grew from 46% this year from 38% in 2012, the increase was particularly dramatic in family law, where it rose from in one in 10 cases to almost half.

In the first release of data from this year’s annual tracker survey, researchers found that fixed fees were most common in will-writing (71%), followed by conveyancing (66%) and immigration (55%).

Hourly rates accounted for less than 10% of transactions, being most regularly used for probate and employment cases.

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Almost one in five transactions involve some degree of unbundling, where the provider and consumer share tasks between them. Probate, employment and immigration are the most common legal tasks where this happens.

The research, carried out by YouGov, is based on a representative sample of 1,896 adults, and a further 1,060 who have used legal services in the last two years.

The survey showed that since first undertaken in 2011, there have been increases in shopping around, from 21% to 24%, in happiness with the choice available, from 65% to 68% and satisfaction with value for money, which rose from 57% to 63%.

There was a big drop in the number of people saying they found it difficult to compare lawyers, from 28% to 14%. This contrasts with the very low numbers of consumers who use comparison websites, still only 2%.

A new question in the survey on type of firm showed that large corporate firms, national brands with local offices, and online only services made up a fifth of all providers.

Small firms and sole practices had that lowest market share in the personal injury world, with around 45%. They had the highest share in probate, with 80%, followed by will-writing and family work.

Elisabeth Davies, chair of the consumer panel, welcomed the increase in shopping around, and said the panel was not surprised that fixed fees had “become the norm” for will-writing and conveyancing.

“It’s what consumers have been calling for and it’s surely no coincidence that they’re now reporting getting better value for money,” she said.

“These figures represent small steps in the right direction but there is no room for complacency. While consumers now have the appetite to compare lawyers on quality and price, low use of comparison websites and quality marks still limits the extent to which people can make informed choices.

“In an effort to make legal services more affordable, there is evidence of large numbers of firms offering deals where tasks are shared between lawyers and consumers. Such ‘unbundled’ delivery is a welcome development, but these deals are no excuse for a second-rate service.”

She added that the panel plans to carry out research on unbundling with the Legal Services Board later this year.

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