Ombudsman tells lawyers: sort out your pricing or risk losing work to "nakedly commercial enterprises"

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By Legal Futures

6 March 2012


Sampson: the notion of ‘customer’ turns the traditional relationship between lawyer and client on its head

Lawyers must provide clearer pricing information to their clients or risk losing out to new entrants to the market, the Legal Ombudsman (LeO) has warned.

LeO today issued a report on the problems issues around cost cause consumers, accounting for up to a quarter of all of its investigations, along with guides for both lawyers and their clients on the issue.

The problems highlighted in case studies included in the report boiled down to poor communication, said chief ombudsman Adam Sampson. “Good service in any sphere includes ensuring that a customer is not bamboozled, but provided with clear information about what is going to be provided and at what cost…

“Some lawyers are as yet still reluctant to recognise that their clients are also customers. The notion of ‘customer’ turns the traditional relationship between lawyer and client on its head. In most businesses, the customer holds sway and can pick and choose which services to buy from which provider. This type of relationship is increasingly the norm even in the legal sector.”

The report was sceptical of the argument advanced by lawyers that the trajectory of many legal transactions makes is impossible to predict the cost, observing that “law firms who seem powerless to work on a fixed costs model for individual clients appear far more willing to do so for insurers and the Legal Services Commission”.

It said: “Litigation can be very unpredictable and co

sts can vary hugely. But that is only true of a relatively small proportion of legal services. Writing a will, buying or selling a home, even conducting a simple criminal case – all of these activities are in most cases entirely predictable transactions where costs can be calculated well in advance.

“Even where more complex transactions are involved, it is often possible to predict what each element of the service may cost and offer some sort of conditional pricing dependent upon how the case unfolds. This is exactly where the leaders of the legal services market are going.

“We are already seeing the arrival of new, nakedly commercial enterprises offering fixed-price wills or conveyancing. They are breaking those transactions down into discrete elements, many of which can be provided by relatively unqualified (low-cost) staff supported by specialist legal software.”

The report recognised that there are risks in the new market and said LeO takes no position on what are the best models: “No one wants ‘pile ’em high and flog ’em cheap’ law, particularly not when our children, our homes or even our freedom are at stake. But if it means cheaper, more predictable pricing, one of the key barriers between citizens and legal services will be removed.”

The guidance was welcomed by consumer representatives. Elisabeth Davies, chairwoman of the Legal Services Consumer Panel, said: “The sheer volume of complaints about charges is disappointing, but most of these could have been avoided if only things had been better explained at the time…

“Our advice to consumers is to shop around for the best deal, ask lots of questions and don’t be afraid to challenge your lawyer if you are unhappy about their fees.”

Louise Hanson, head of campaigns at Which?, said: “Too many disputes with lawyers are due to ‘bill shock’ but people can prevent nasty surprises in their final bill by asking the right questions.”

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One Response to “Ombudsman tells lawyers: sort out your pricing or risk losing work to "nakedly commercial enterprises"”

  1. This post is quite surprising. I didn’t realize that bill disputes were such a common issue. The solution seems simple: better disclosure by lawyers and more questions from buyers.

    Perhaps customers don’t understand the value of what they get?

    When shopping around, customers may not know what to ask or how to interpret the answers. Without guidance, price becomes a simplified way to compare. That may not be the best measure …

  2. Promod Sharma || actuary | blogger | advocate on March 9th, 2012 at 3:37 pm

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