Today’s Wills and Probate Feature: Greater transparency in the legal services market
The issue of transparency in the legal services market has become one of the most widely discussed issues across sector during recent months.
In light of the report from the Competitions and Markets Authority (CMA) and subsequent proposals from the Solicitors Regulation Authority (SRA), professionals have expressed a mixed reaction, especially in relation to what the planned changes could mean for their practices.
This article will look at the transparency proposals from the SRA, how they could impact the Wills and Probate sector as well as exploring how professionals could potentially benefit from the changes.
Impact of the internet on legal services
The growth of the online world has significantly changed the way in which consumers search for goods and services.
Whilst the internet has provided a virtual platform for legal service providers, the growth in the use of portable devices such as tablets and smartphones has made these services even more accessible.
Having recognised the benefits that the online world had to offer for businesses, both in terms of reachability and recognition, the number of professionals entering the online marketplace has naturally seen a surge. Though this increase may not have been reflected in the actual number of providers entering the market, it certainly gave this impression, as the number of professionals setting up their own space on the web began to increase.
As a result of this and the ongoing improvements in online accessibility, competition among service providers continues to grow.
For consumers, the introduction of the internet brought them something else – choice.
Up until this point, consumers had been arguably been restricted in terms of choosing a legal professional, having to rely upon recommendations or the provider on their local high street. The fact that businesses were now available to view online presented them with much wider array of options, enabling them to find a provider who could cater more closely to their individual needs.
However, whilst choice can rarely be a bad thing, it can in itself present problems. Though it provides the consumer with options, it can be difficult if the variations between these options are unclear.
Where this is the case, a wide range of choice can become a negative thing for the consumer, leaving them in the dark about which legal service provider would be best for them. Given that the majority of the population may be unfamiliar with legal matters anyway, this decision becomes even more of a challenge.
Time for change
This is one of the key principles which underpin the recommendations made by the Competitions and Markets Authority. They felt that factors such as prices, service information and a general lack of clarity in certain areas were acting a barrier for consumer access to legal services. For example, one the headline statistics revealed that just 17% of legal service providers had published their prices online.
In response to the report, the Solicitors Regulation Authority confirmed its support for the publication of prices, advising on how it thought the market should proceed and opening a consultation on the measures it plans to introduce. The Wills and Probate sector was highlighted as one of the first sectors where the changes would be applied.
Recognising that access to prices is an issue for consumers was Charlotte Ponder. The Legal Director of Countrywide Tax and Trust Corporation Ltd. stated: “Individual consumers do not have sufficient access to information on price (and what services are included for that price) at present. This leaves them unable to make an informed choice, and is, in particular, an issue for the more vulnerable clients the Estate Planning sector deals with.”
The focus of the proposed changes is to help consumers make more informed decisions when choosing their legal provider, as well as boosting competition among providers.
The planned measures are as follows:
- require firms to publish their price for services (limited initially to a select number of legal services)
- require firms to publish a description of the services they offer – in the same areas we will ask firms to publish price information
- require firms to make information on our regulatory protections available – this includes introducing a digital badge that verifies that a firm is regulated by us
- publish the data we already collect on first-tier complaints made against firms we regulate and their areas of practice
- build a digital register that holds our key regulatory data about solicitors and firms we regulate in one place and make this available to the public.
- require solicitors working in non-Legal Services Act regulated firms to inform clients that they are not subject to the SRA requirements for compulsory professional indemnity insurance.
From all of the proposals, the first two have arguably received the most interest, as well as having raised the most concern.
These have been acknowledged by the SRA within the consultation itself, with the regulator citing its recognition of potential barriers to access, comparability and quality. However, it draws attention to the wider picture, asking firms to consider the potential opportunities that the changes could present, beyond those of increased competition.
To elaborate on this point, requiring firms to publish their prices online will actually shift the focus away from price, and instead, onto quality.
At first, this concept might seem strange; if firms have their pricing structure listed online, surely that goes some way to influencing potential clients?
Whilst this may be true to some extent, it’s actually more likely to transfer consumer focus on to other factors. For example, if all legal service providers are required to publish their prices, it will level out the playing field, almost setting a baseline for the consumer to refer to.
Rather than worrying about cost, they’ll look for what differentiates the firm, and in turn, choose a provider that is best suited to their needs.
In this respect, the changes could be seen as an opportunity for firms to set their firm apart from competitors, with the SRA suggesting that this could include focussing on the specialist skills and utilising quality data.
Drawing attention to the need to improve qualitative service information for consumers was Anthony Allsopp. The Head of Client Services at Title Research stated that whilst price publication is a step in the right direction, clients need greater guidance on what to expect for the amount they pay.
“It is far easier in today’s world for consumers to shop around and the legal industry is not immune to this. We think the SRA’s proposal is a progressive step as clients are increasingly looking for quality and transparency, that’s certainly what we hear from Personal Representatives of the estates we work on.
“Price publication is one tool to achieve this, but fundamentally clients need to be fully guided on what to expect for their fees. Our aim is to always be completely transparent about fees and wherever possible, we will look to offer fixed-fee solutions – however, experience, quality and always acting in the best interest of your client is equally important.”
Highlighting the need to improve transparency and increase information at the outset for consumers was Jen Davies. As well as drawing attention to the educational benefits that improving information could bring, The Legal Services Director at The Move Exchange stated that it could also benefit firms if presented in a way which reflects the quality of service.
“It is clear that unlike in other sectors, legal fees are not as transparent as consumers would like them to be. Clients are often left feeling misled when they get further down the line and additional fees are applied. Publishing pricing online would give consumers a better idea of the cost of legal services at the outset. Increasing information about legal services online more generally, will help towards an increase in consumer awareness of the process. Whilst some firms may feel publishing pricing online may leave them at a disadvantage, if the information is presented in a way which reflects value for money, this could give them a market advantage.”
Also commenting on the need for firms to be open from the outset was Emily Deane of STEP’s Technical Counsel. She stated: “We believe that charges should be explained to the client in a way that is open and transparent from the start of the process. The STEP Code for Will Preparation in England & Wales sets out our expectations as to what we expect from members in their dealings with clients and how charges will be calculated. Some wills and probate matters can become more complex than originally anticipated, and if this is the case, we expect our members to let the client know at the earliest opportunity.”
Where differentiation is concerned, she went on to mention the importance of accreditations, stating: “Moving forwards we would like to raise awareness of the variety of professional titles used within the legal services sector, and the qualifications that are required in both the regulated and unregulated sector. This will reassure the client that they have chosen a trustworthy provider who is either subject to statutory or voluntary regulation or is associated with a recognised reputable professional body with an ethical code and a clear complaints procedure. These are key elements in improving the level of information that is available to the consumer so that they can make an informed decision about their provider.”
In addition to looking at factors which differentiate a firm, consumers are likely to want to know about the experiences that others have had with a firm, going in search of reviews. This is what makes providing quality data so important for firms; no matter how highly you describe the standard of your services, a potential client is far more likely to place trust in an online review from a real customer than an explanation on a website. From the perspective of a new visitor therefore, being able to access the reviews of previous clients may lead them to choose your services over those of a competitor.
Professionals have expressed mixed reaction in relation to the publication of reviews, namely in relation to the accuracy, and how the consumer will actually recognise whether the service they’ve been given is of a high standard.
Sharing his view on this point was Seb Shakh. The Director of WillSuite stated: “Reviews of restaurants, movies, and hotels are commonplace; in fact, my pick of any of these will often based on a quick google search beforehand. However, with professional advice – estate planning in particular – the consumer has put their trust in the advisor. Therefore there’s no way for them to know if they’ve actually been given the best advice. For instance, it may not be until the death of the Testator that any issues with the drafting of the Will become apparent.”
However, he went on to suggest a way that this issue could be alleviated, stating: “One way of allowing the consumer to more accurately review both the advisor and the advice they have been given, is to fully educate them. This would mean providing them with the choice of options available, with the reasoning behind what has been chosen for them, as well as what hasn’t. I’m also a firm believer that plain-English Wills go a long way to help the clients understand what has been put in place for them.”
Charlotte Ponder took the view that professionals should not fear reviews, highlighting that provide providers with a platform to engage with consumers in a positive way.
She stated: “I don’t think that the sector should be afraid of customer reviews, quite the opposite. They offer an opportunity to interact with clients, and can help you to improve the services you offer. If you deal with an issue in the right way, you can find that complainers become an advocate for your business! Just responding to messages online, for example, shows that you care.”
Seb Shakh also elaborated on this point, drawing attention to the importance of building a rapport with a client in order to help instil confidence in services, particularly for new clients.
“For a new, potential client, taking steps to build that initial rapport can be a key deciding factor as to whether they entrust you with their business over a competitor. Reviews can allow for this rapport to be built before you’ve even met them for the first time, and can be a fantastic way of proving that you are confident with the quality of your service.”
Though the impact of the CMA report has been wide-ranging, the responses to the SRA’s consultation are currently being analysed. However, whilst we’re currently unclear as to the measures which will be introduced, it’s likely that improving transparency will be among them.
In fact, the resulting regulations which are eventually put forward could provide firms with a valuable opportunity to differentiate services from competitors – it will be interesting to see how practices respond.