Guest post by Richard Hinton, the founder of Pitsford Consulting
If, as is largely anticipated, the Competition and Markets Authority (CMA) again points the profession at the water, how are the regulators supposed to ensure their members drink?
This is the possible conundrum faced by the legal services regulators in early 2021 when the CMA reports on the progress made on price and service transparency in the legal market since its 2016 review.
If events follow precedent, then we’re likely to be in for a cycle of the regulators further consulting, then issuing new rules, the regulated responding by either ignoring them or simply paying lip service, time then passes, the grass grows and the regulators then begin a new review…
It’s a recipe for, at best, modest incremental change. I just wonder if there’s another way.
Would firms be pleasantly surprised if they were met half way? If the regulators and the representative bodies stepped up and took a lead to help facilitate the changes they are calling for?
If quality standards are to be part of an increasingly transparent profession, then why not specify these and more importantly from a hard-pressed firm’s point of view, supply these metrics to firms?
There must be a value in regulators leading a discussion that delivered objective standards that didn’t require firms to take the time and the trouble to source themselves. Suitably quality marked, these would be authoritative, uniform and comprehensive – and importantly their production wouldn’t place an additional burden on the profession.
How about if representative bodies negotiated preferential rates for their members with the major client review platforms? One of the most effective means of building consumer trust and converting new business delivered to members at a discount would surely resonate with firms looking for support from those who regulate them.
If such actions on quality standards delivered value whilst avoiding new burdens on firms, then the potential is even greater when regulators look at the adjacent issue of comparison sites. The CMA has called for their greater use in order to promote informed choice amongst consumers.
On the face of it, it’s difficult to see how regulators and the representative bodies could or even should try to prime this particular pump. By their very nature, comparison sites offer consumers a curated subset of the profession, so how could regulators adopt a proactive stance that didn’t adversely impact large swathes of their member firms who were not included?
The short answer is they couldn’t, but that presupposes that the model for comparison sites is fixed. It isn’t fixed – it’s just how commercial imperatives have shaped it within a particular set of parameters. If those parameters could be changed, then the model can evolve.
One of the unique powers of the regulators and their associated trade bodies is their ability to bring the whole of market to bear. Commercial operators of comparison sites lack this power and consequently have had to act accordingly within this parameter. With this power, however, a whole-of-market comparison site becomes a distinct possibility.
Imagine if a new, whole-of-market comparison site launched with performance-rich data on all firms (the same data the regulators might plan to bring forward as validated quality indicators).
Imagine too that such a site was championed by the profession itself, widely supported by consumer platforms, syndicated free of charge to stakeholders and powered by industry sponsors. In such a model, participation would be available to all regulated firms.
Consumers would have the insight the CMA is driving for, firms would have a newly levelled playing field and new instructions could flow like… water down a horse’s throat.
None of this of course may happen. But, with a will, all of it could.