Lawyers who attract a sufficient number of positive client reviews are able to charge higher fees, the head of an online lawyer-matching service has claimed.
Daniel Van Binsbergen, chief executive of Lexoo, said his comment was based on an analysis of over 1,000 client reviews received by his website, where lawyers offer fixed-fee quotes for jobs posted by businesses.
Mr Van Binsbergen said that only 5% of the reviews on the site were negative and having a single “odd-ball review” among a dozen good reviews could increase a lawyer’s standing.
“People who look at these reviews will then trust the system. Whereas if all reviews are positive, they feel more like testimonials than part of an objective system.”
Speaking at the Westminster Legal Policy Forum event in London last week, Mr Van Binsbergen said all lawyers featured on Lexoo were reviewed by their clients on responsiveness, value for money and quality of work.
“A lot of forward-thinking lawyers joining our platform were very afraid at first of being reviewed by their clients. They were afraid that clients might not understand the complexity of the work or be unreasonable.
“To be honest we didn’t know the answer to that. But now we’ve accumulated over 1,000 reviews and we have the data.”
Mr Van Binsbergen said that once they had collected about 15 positive client reviews, lawyers were able to charge higher fees.
He said this showed that transparency and accountability were “not necessarily a bad thing” for lawyers, and could help them think creatively about how to provide a better service, because they knew they would get credit for it.
“A lot of lawyers don’t realise that it’s quite rare in their ordinary work for clients to say ‘thank you so much, you really helped me’. Some clients may, but with the majority, it just doesn’t happen. I guess it takes a bit of effort to send that email.
“With our review system, it does happen because we request a review and you get that message back and you actually get the public credit.”
Mr Van Binsbergen went on: “What I love about making the market more competitive is that it fosters innovation. Because all Lexoo lawyers know they’re in competition, we’ve noticed that, after joining, some of them make conscious decisions to invest in technology.
“One example is contract drafting software. If lawyers know they are getting a fixed fee for terms and conditions, they will think about how to do the job more efficiently and get rid of the boring bits which can be done by technology.”
Mr Van Binsbergen said the “root cause” of the problems of lack of clarity on price and lack of incentive to innovate, identified in the Competition and Markets Authority report last December, was that most traditional law firms were still set up to bill by the hour while facing “no real competition”.
He went on: “Although they give fee estimates or bill clients based on caps, behind the scenes everything is still being done on an hourly rate basis.
“The billable hour creates the wrong incentive. You’re rewarded for spending more time and I don’t think a lot of lawyers spend that time effectively. It removes the incentive to find ways of being efficient.
“If you’re billing by the hour, it’s much harder internally to justify making large investments in technology.”
Mr Van Binsbergen added that cost certainty was the main reason why in-house lawyers switched from working with traditional law firms to working with lawyers on Lexoo.