Will solicitors finally be fans of transparency now?

Posted by Dave Seager, consulting adviser to Legal Futures Associate SIFA Professional

Seager: CMA has made clear its concerns about unregulated providers

Since the introduction of the Solicitors Regulation Authority’s (SRA) transparency rules in December 2018, I have been an advocate for law firms going further then the regulatory essentials.

With the evidence growing that consumers are increasingly researching online for the best professional to service their legal requirements, why would a firm not wish to showcase their talents, their team, and their comprehensive service, for a fair price, on their website?

However, my experience, and indeed the findings of the SRA, would suggest that even now, over five years on, not all solicitor firms are choosing to embrace the research behind transparency or what it should help them gain – that is, new clients.

Those reluctant firms were probably not the biggest fans of the Competition and Markets Authority (CMA), whose research was the driving force behind the regulators push for clarity and openness. That indifference or even resentment towards the CMA may now be about to change.

Following on from its ongoing (since July 2023) investigation into unregulated legal businesses which provide online divorce, will-writing and pre-paid probate services, the CMA has announced draft new guidance such providers will be expected to adhere to. It aims to protect consumers and the CMA suggests non-compliance will incur penalties.

The draft guidance, currently out for consultation, has three main objectives, namely to:

  • Ensure consumers always have the information they need to make informed decisions;
  • Provide fair terms and conditions between providers of unregulated legal services and consumers; and
  • Stop, what the CMA calls ‘sales’ practices which are misleading or aggressive, or otherwise contrary to statutory obligations.

The first of these, unsurprisingly, bears obvious similarity to the SRA’s approach to transparency, but it is the other two that should be well received by even the most hitherto cynical solicitor.

The CMA investigation came out of concerns that providers of these services were, at best, potentially misleading the researching consumer and, at worst, in breach of consumer law.

Examples included advertising low headline initial fees without clear indications of future costs; potentially unfair contract terms, such as exclusions of liability, failures to provide cancellation rights, and terms which automatically appointed the firm as executor (often for a fee); and reports of pressure selling and the coercion of vulnerable customers.

The draft guidance includes clear ‘do and don’t’ advice, along with checklists and case studies. It strongly requests that all fees are clearly set out and should include likely expenses or associated costs; state that the business is unregulated; and be clear about what work is completed in-house and if any part of the service is outsourced to third parties.

Importantly, the unregulated business must make sure that consumers are aware of any professional qualifications held by consumer-facing individuals.

This approach will surely be welcomed by regulated legal providers and the wider professional community, who have become increasingly disillusioned with the unregulated section of legal services contributing to the increasing levels of contested wills and dissatisfied divorcees, who perhaps opted for the cheap headline rate for a quick online split, only to find themselves financially worse off, without hope of redress.

SRA-regulated firms might well have felt aggrieved at the transparency required of them whilst the unregulated competition could be opaque, or even liberal with the truth, about their own services whilst undercutting them.

Hopefully, they will be grateful to see some balance restored, and will be able to take advantage and truly promote their full services, which will almost always be more comprehensive and arguably far less likely to leave a client unhappy, dissatisfied or financially worse off down the line.

The wording of the ‘dos and don’ts’ in the guidance is very strong and leaves little doubt as to what the CMA (and probably most solicitors) believes has been happening in recent times.

For example, on will-writing, it says: “Do not make misleading comparisons when marketing your services, for example by comparing the (higher) cost of a bespoke service provided by a solicitor with your (lower) cost.”

And for online divorce: “Do not make misleading comparisons with competing services where your service is not in fact comparable (for example, comparing the (lower) cost of a limited, generic online divorce service with the cost of engaging the advice of a specialist family solicitor without making clear the differences between these two services).”

I anticipate that quality law firms offering such services with fuller support and bespoke advice will welcome the proposed new guidance and may even take the opportunity to add their thoughts to the CMA’s consultation.

Furthermore, as I suggested in the title to this article, I hope more solicitors, now the playing field is being somewhat levelled, or even tilted in their favour, will see the benefits of clarity in the promotion of their more often than not superior services.


    Readers Comments

  • Michael Robinson says:

    Surely the amount of information I wish to put on a website is my decision, so long as it is not misleading, and nothing to do with anyone else. I’m sick of SRA or CMA or anyone else sticking their nose into my business.

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