The price transparency rules, that came into effect in December last year, have been contentious since they were first suggested by the Competition and Markets Authority (CMA) in 2016.
A new Bellwether Report 2019 discussion paper, The Changing Face of Law, by LexisNexis, has highlighted the growing chasm of differing opinions concerning the impact price transparency is having on compliant firms.
Of the 200 law firms questioned in the report, 58% of solicitors and 69% of those running law firms believe that the changing nature of consumerism is impacting their ability to complete the legal service. 31% of the respondents viewed price transparency changes as compromising their role as a legal expert with an additional 40% believing changes have caused an occasional impact on their role.
A small number were concerned that consumerism driving prices downward is leading to unethical practices among some solicitors. Furthermore, over a quarter (26%) have attributed price transparency to reducing costs at the expense of a quality service.
Nick Woolf, director Nicholas Woolf & Co, said: “Consumerism, encouraged by government cuts and policy, have resulted in increasingly complex law and professional regulation intended to reduce price but having the opposite effect. This leads not only to increased costs, conflicts of interest, and a reduction in service levels, but also leaves vast swathes of the population unrepresented.”
Many solicitors are increasingly concerned that, instead of encouraging consumers to focus more on the services provided by a solicitor, price is becoming a determining factor in winning new business. 33% of potential new business is being won purely on price as opposed to the expertise within the law firm.
41% of respondents view publishing prices as a legitimate risk to their business as they fear reducing costs will disrupt the quality of service that will be provided.
The report also emphasised the clear divide between compliant and non-compliant firms. 29% of solicitors have fully embraced the transparent publishing of prices whilst a third of firms have rejected the rules to some extent.
Ed Fletcher, Chief Executive, Fletchers Solicitors, commented: “Price in the law, like in any other service industry, is an important factor in the consumer’s decision making. As the consumer becomes more savvy and well educated in the alternatives available, value will be critical with price often being the determining factor in delivering this.”
Mandeep Kaur Virdee, Managing Partner, KaurMaxwell Solicitors, said: “I most definitely view it as an opportunity for the legal industry and believe that it shows that we have the confidence to publish prices for our services. It means clients will be aware of ball parked figures from the outset and, whilst the published prices do not always confirm how much a case will actually cost subjectively, it is a good indicator for clients to see.”
Whilst price transparency continues to divide solicitors and is struggling to encourage firms to enforce full compliance, it is unclear how beneficial the reforms will be for the consumerist generation of clients and the legal sector overall.
Has your business struggled due to the consumerist changes price transparency is creating? Or, has your firm pushed and improved the services and expertise that is on offer in a bid to create a more competitive and quality product?