Online: 11% of firms do not have a website
There is concern among solicitors that forcing firms to publish their costs will lead to ‘price baiting’, with some firms using artificially low prices to get clients through the door before increasing the costs later.
The Solicitors Regulation Authority (SRA) survey of 1,146 law firms, mainly of 1-25 partners, found widespread wariness about the idea of price publication.
Firms said that potential users of legal services did not choose a legal provider based on price alone but on other factors such as skills, qualification, quality and consumer protections.
The report forms part of the regulator’s work to improve transparency to help consumers shop around, following the Competition and Markets Authority’s report in December 2016. It will also serve as a baseline to measure the impact of price transparency.
It was published together with a study into how consumers choose conveyancing solicitors.
Though recognising that price was not the only issue around transparency, and that it was easier in some areas of practice than others, the report argued that “a lack of transparent pricing is a significant barrier to members of the public and small businesses being able to compare providers, access legal services and drive competition in the legal services market”.
This information “should be easily accessible” before they choose a provider rather than at the point of engagement, the SRA said.
“Current research shows that 63% of the public do not believe that professional legal advice is an affordable option for ordinary people.
“By advertising price information firms could win more business as it will help more consumers to access legal services.”
Some 11% of firms did not have a website at all, the survey found, while a third believed that some of their clients had used their website before instructing them.
Only 18% of the firms surveyed advertised any prices, with family/matrimonial, wills and residential property the most popular areas of law for it.
Most of these firms did it so as to make it easier for clients to understand their services, while 57% wanted to attract more clients and 31% thought it would make them more competitive.
The report said: “Although only 9% of firms advertised to keep up with their competitors, as firms become more transparent in relation to the cost of their services, this should drive competition to the benefit of consumers.
“Only 9% of firms stated they advertise prices due to consumer demand, as this is not common place in this market. As the publication of pricing becomes wider spread consumer expectation is likely to increase.”
The SRA found “many reasons” why firms did not advertise price, ranging from basing price on the needs of each client (53%) and on an initial consultation (43%), to not wanting competitors to see their prices and not wanting to “confuse” clients if the service exceeds the initial price (both 17%).
Respondents said the main challenge in advertising prices was that matters could be complex and variable (74%) which can make pricing difficult.
The report said: “Reassuringly, firms did not believe that price transparency will generate higher prices for consumers (6%) however, many firms (59%) were concerned that some firms may publish artificially low prices to attract consumers but in reality, the price charged could be higher.”
Similarly, there was concern about a race to the bottom, with the least experienced advertising lower hourly rates to the detriment of consumers.
Firms said the main benefit to customers in advertising prices was managing their expectations about cost (39%). Only 17% of firms believed it would lead to lower prices and more consumers accessing legal services.
Only 3% of firms provided price information to comparison websites, with those that did mainly in conveyancing and bankruptcy/insolvency work.
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