What can we learn from the CMA report?

Wills and probate work is a major element of the Competition and Markets Authority’s latest report on the provision of legal services. It is worth any firm doing such work considering the findings and recommendations as a sign of the way the market might move, even if they are not introducing any practice changes right now.

More transparency

Lack of transparency on price and service – especially online – makes it harder for consumers to compare prices and identify value for money. This is a key concern of the report as it allows firms to negotiate prices on an individual basis instead of committing to standard prices, thus ‘undermining competition and reducing incentives to compete on price, quality and innovation’ – the ‘potential gains from greater competition’.

The CMA’s analysis shows legal services provision is ‘very fragmented’, even with ‘no significant barriers to consolidation or expansion to develop brands’, and it would clearly like to see others breaking into the market. Unregulated providers (like will writers) have had ‘only limited success in winning market share’, although they actually make up about 13 per cent of the will market.

It is interesting that, while this is music to the ears of many solicitors, the CMA laments that ‘consumers predominantly rely on recommendations from others, or their own previous experience’, so it is likely to take a long time for new types of provider to become established. However, the report does note that a ‘possible lack of trust might emerge… were awareness of alternative providers to increase’.

A difficulty looking at the wills market is the extent to which the work is a ‘high-volume area of law’, or one of the ‘more complex area(s) of law... (where) services are necessarily more bespoke and comparable simple pricing structures may be inherently more difficult to implement’. The CMA says prices are rarely accessible without having to contact the provider. It suggests many firms could publish more information as firms ‘generally use menus of outline prices – for internal purposes’.

The trend is clearly for greater disclosure of prices and more fixed pricing, even if with reference to a menu of choices as the complexity of wills and associated documents grows. Most firms are used to quoting extra fees, for example for severing a joint tenancy or updating the registered title. As a profession we need to get better and more sophisticated about how we do this.

Quality of service

I am a great believer in lawyers doing wills, estates, and (where they have the expertise) associated inheritance tax planning, rather than non-lawyers, but are we doing that work well? Unfortunately, the report refers back to the LSB Consumer Panel report on will-writing quality, in July 2011, when lawyers produced wills that did not reflect what clients needed and contained basic errors. While the CMA admits there is limited evidence here, it is such a shame that what it has suggests ‘no significant difference in quality’ from the unregulated or self-regulated providers, when we should show clear added value with lawyers doing this work.

The CMA therefore recommends that regulators consider action ‘to deliver a step change in standards of transparency, to help consumers to understand the price and service they will receive, the redress available and the regulatory status of their provider’.

SRA-regulated firms are strong on redress and regulatory status, but have clear weaknesses on communicating price and service. We must prepare for regulators requiring a new minimum standard for disclosures here, including requirements to publish information on prices clients are likely to pay. Quite how this will work, when wills vary so much and are difficult to categorise, is not clear, but there’s no doubt about the direction of travel.

The promotion of independent feedback platforms is encouraged. Information to assist in judging firms’ quality tends to be limited to testimonials and highlighting experience and qualifications, and very few use independent reviews and quality marks.

The CMA’s recognition that quality is particularly difficult to assess reflects problems with wills often not being discovered until many years later. There is potentially a role for ex ante regulation, such as training and entry requirements, but without clear evidence on consumer protection problems, the extent to which regulation would be beneficial is unclear.

Key points

• Pricing and giving consumers choices over price in advance – for example online – is critical;

• We may say quality is crucial but we need to find ways to show that;

• Can we advertise our ‘menu’ of prices better (for example, including the extra costs when new factors make work more complex)?How can we distinguish the service we offer?

John Bunker is head of private client knowledge management at Irwin Mitchell

@irwinmitchell www.irwinmitchell.com