Panel spells out challenge of contextualising law firm transparency data

Price: Research will be key to contextualising

There is “no prototype” for how to contextualise transparency data about law firms for consumers, and it will not be perfect from the start, the Legal Services Consumer Panel (LSCP) has warned.

Research was “pivotal to effective contextualisation” of information provided to consumers on price, service and quality, it went on.

The LSCP said experience in other sectors showed that regulators “must be prepared to dedicate resources” to understanding data and collaborate to show they were complying with “not just the letter but the spirit” of the Legal Services Act.

The Legal Services Board (LSB) asked the panel to prepare a paper on contextualising consumer information following publication by the oversight regulator of its policy statement on consumer empowerment in April this year.

The overall aim is to give consumers the information they need to be able to choose a lawyer and the statement said regulators must provide information on lawyers’ disciplinary records and sanctions, together with complaints data from the Legal Ombudsman.

The LSCP said some regulators responded by raising concerns that, without the proper contextualisation of transparency data, consumers would not be able to use information they obtained from regulators and law firms.

Meanwhile, regulators were “often concerned” that they lacked the human resources or technology to gather data.

The panel said: “We agree that regulators must strike the right balance, weighing costs, effort and benefits. We understand that there are difficulties around capacity to collect and analyse information, especially for smaller regulators in the legal services sector.

“However, what legal services regulators must also consider is the counter-position; the cost of doing nothing.

“In our view, the status quo would mean perpetuating the ongoing information deficiency, which hinders effective competition and stifles innovation and informed consumer choice.”

The LSCP said there was “no prototype” for how to do this and it would not be perfect from the start, and need to be refined.

Key was to “learn through doing”, bearing in mind the potential for information overload, the dangers of “over-simplification as well as over-complexity” and the ability of consumers to engage with and use information.

The LSCP said a “common concern” was that publication of complaints data without context would “confuse or mislead” consumers. For example, consumers “may not be able to understand and link the volumes of complaints with the size of the business”, which could be significant for larger firms with more complaints.

“This issue was considered and eventually dealt with in the financial service sector, where complaints data are now presented in the context of the size of the businesses concerned.”

The panel called on each legal regulator to “do what is feasible within their community, to carry out research where necessary, to collaborate with others and use existing data creatively” to demonstrate “not just the letter but the spirit of their regulatory duties and obligations under the Legal Services Act”.

The LSCP added that an obligation on regulators to contextualise information was “implied in the recommendations” of the Competition and Markets Authority in its 2016 report on legal services.

“Indeed, we doubt that the desired outcomes of the recommendations could be achieved without contextualisation. As such, we consider contextualisation to be a clear regulatory requirement that needs to be addressed by the regulators.”

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