Law firms will have to publish their prices for a range of consumer and business services, the Solicitors Regulation Authority (SRA) has decided, but they will not have to put their complaints records in the public domain.
It comes alongside research commissioned jointly by the SRA and Legal Ombudsman (LeO) that found 85% of consumers said they needed information before choosing a legal services provider, mostly relating to price (53%) and quality (37%).
However, the two most important factors in choosing a provider were reputation, followed by price.
The SRA is the second regulator, after the Council for Licensed Conveyancers (CLC), to announce how it plans to implement the recommendations of the Competition & Markets Authority’s 2016 report on improving transparency in the market.
Subject to the approval of the Legal Services Board, from December 2018 all SRA-regulated law firms will be required to publish on their websites information on the prices they charge, and what these cover, across a number of common services.
For consumers, these will be conveyancing, probate, motoring offences, employment tribunals and immigration (excluding asylum). The latter has been added following consultation, while divorce has been removed because of the weight of responses saying how hard it would prove to do.
Firms handling debt recovery (up to £100,000), employment tribunals and licensing applications for business premises for small businesses will also have to publish prices and details of those services.
Where firms do not know the total cost of a service, they will be expected to provide the information they do know, for example the average cost or range of costs.
Firms will also be required to make clear what the price given on their website includes and does not include.
Those without a website will have to provide the information to the public on request without the need for a consultation.
Speaking to the media yesterday, SRA policy director Crispin Passmore said firms would not be required to make their price information prominent on their websites, but argued that consumers were more likely to choose those that did.
The consultation issued last September proposed making firms publish details about the number of complaints they receive, but the response has prompted a rethink and this has been dropped, because of the difficulty of putting such figures, which are generally very low, into context.
Firms will, however, have to publish details of their internal complaints procedure on their website and how a complaint can be made to LeO or the SRA.
The SRA/LeO research, produced by consultancy Economic Insight, “did not find a strong case for also publishing first-tier complaints data at this stage”, noting that similar sectors did not do so.
“This type of information tends to be public in sectors where outcomes are more easily categorised as ‘good’ or ‘bad’, as for example utilities, financial services and transport.”
Other elements of the reforms going ahead include the introduction of a digital badge – something CLC-regulated firms already have – which firms will display on their websites.
Users clicking on the badge will go through to an SRA page which will confirms that the firm is regulated and explains the protections this provides.
The regulator will also build on its law firm search facility to develop a digital register, providing information on the solicitors and firms it regulates, including the areas of law in which they practise. This will display any disciplinary or other regulatory decisions as well.
The SRA said it would promote the digital badge and register to those seeking to use legal services to make sure people understand what they mean.
Solicitors working on a freelance basis or in businesses that are not regulated by the SRA or another legal regulator – as will be allowed under the new SRA Handbook – will need to explain their insurance position, before they begin working with a client, and be clear too that their client will not be eligible to claim on the SRA Compensation Fund if things go wrong.
SRA chief executive Paul Philip said: “People with legal problems often struggle to find clear, understandable information to help them choose the right service. All the evidence shows that they do not necessarily want the cheapest provider, but they do find having information on price helps with their choices.
“Better information will not only help the public and small businesses, but also provide opportunities for firms to promote their individual offer and the extra customer protections you get using a regulated law firm. It is a win-win for everyone.”
The SRA and LeO research found that most consumers were prepared to pay more for regulated legal services which offer them greater protection.
This was the case even though a slightly larger majority (57% compared to 54%) mistakenly believed that all legal service providers were regulated.
The study involved an online poll of 1,000 recent users of legal services, and the testing of up to 1,900 people on their understanding of complaints data and consumer protections.
A large majority (79%) of consumers felt more comfortable when firms had an online ‘badge’ making it clear they were regulated by the SRA. Firms with a badge were 14% more likely to be chosen.
The research revealed low levels of awareness of consumer protections by those who had used a regulated law firm. Less than half (41%) were aware of the LeO, 36% were aware that their firm was insured and only 24% were aware of the compensation fund.
Despite their “mixed” understanding of protections, researchers said the evidence suggested consumers were “willing and able to weigh up price and regulatory protections” and there was “no evidence” that they just picked the cheapest.
The consultants backed the SRA’s proposals, saying that, because “at the point of purchase, most consumers naturally focus on trying to gauge the cost and quality of potential providers”, it was important to have greater transparency in both areas.
They said consumers wanted “practical information about the circumstances under which they can get compensation and/or redress and who to go to” – and one way of achieving this was through the digital badge.
They said that rather than requiring firms to publish large amounts of information about regulatory protections on their websites, consumers should be able to click on the badge and access it through a web link.
The research is the last in a series of reports commissioned by the SRA as part of this project. One found widespread concern among law firms that the plans could lead to ‘price baiting’ or firms offering artificially reduced prices to get consumers through the door.
A separate survey of 1,000 recent house buyers found that consumers selected conveyancers mainly on reputation but clearer online price information would help them make better choices.