The Solicitors Regulation Authority (SRA) is planning to require law firms to publish their fees for services such as divorce, wills or conveyancing, it has emerged.
Crispin Passmore, executive director for policy at the SRA, said the regulator would launch a consultation on the new rules this summer, in line with the recommendations of the Competition and Markets Authority (CMA) final report, published last month.
Mr Passmore told the Westminster Legal Policy Forum yesterday that the regulator would not require all firms to publish everything, but take a “careful” approach and introduce the change in phases.
Later, speaking to Legal Futures, Mr Passmore said the first phase would focus on three or four areas of consumer law, the “simplest areas” for pricing purposes – such as divorce, wills and conveyancing.
He said three or four areas of business law would also be chosen, such as commercial leases, terms of sale for a small business, or a handbook for the company’s first employees.
“We’ll be talking to law firms about the different areas that would work, and what would not,” he said. “There’s no point in picking something massively bespoke. It’s got to be reasonably standard.”
Mr Passmore said any new rule would not “force people to charge in a particular way”. Instead of quoting a fixed fee, firms could provide an hourly rate, then specify how many hours it would take to carry out the service.
He said it was important that consumers were given the “right amount of information” on fees by firms – not so much they were put off reading it.
Mr Passmore added that there was nothing new about firms publishing prices, and both he and his son had found a conveyancer by using a comparison website.
“It’s already happening. Firms can either resist these sorts of changes or embrace them. That’s a decision for every firm to take. The customers will decide, not me.”
The CMA recommended that the legal regulators set minimum standards for the publication of prices, provide guidance to firms and consult on the issue before 30 September 2017.
However, forcing firms to publish their prices did not go down well with some panel members at the Westminster forum.
Sally Azarmi, chair of the Law Society’s small firms division, said requiring firms to produce a “general price list” or details of their hourly rates was “not viable”.
She went on: “If I didn’t communicate my prices accurately to clients, I wouldn’t be here today, as I would have no business. This is not something I’ve seen in other jurisdictions.”
Ms Azarmi said small firms should be “supported and listened to” before regulatory changes were brought in which would have a “massive impact” on them.
“They just don’t have the facilities and manpower to deal with so many fundamental changes.”
Professor Cosmo Graham, director of the Centre for Consumers and Essential Services at Leicester University, said more information did not necessarily lead to better outcomes for consumers.
He said people suffering from “choice overload” did not necessarily make the right decisions, and the move would “create an incentive for providers to produce complex pricing structures”.
Professor Graham said he did not believe the change could be implemented in a “timely and efficient” manner, since this would depend on a number of legal regulators “very different in their scale and abilities” working together.
The CMA has promised to return to the issue in three years’ time, but the professor questioned whether it would have “the capacity post-Brexit” to do this, since leaving the EU would raise other competition issues.
Instead, he predicted that change in the legal services market would be driven by technology and the expansion of alternative dispute resolution – the “real alternative” for many consumers.
Daniel Van Binsbergen, chief executive of lawyer-matching service Lexoo, said there was no need to force lawyers to publish prices up-front, so long as there was an environment where firms like Lexoo and Riverview Law, a new-model law firm well known for doing everything on a fixed fee, could thrive.
Mr Van Binsbergen added that he was in favour of the market solving the problem, rather than “forcing lawyers to come up with grids” of fees.