What's the problem with transparency?
Susan Humble considers the SRA transparency rules and why firms should be proud of their prices
‘A lack of transparency results in distrust and a deep sense of insecurity’, said the Dalai Lama. Not a strong foundation for a fulfilling relationship between law firm and client. Why, then, was there opposition from within the profession when the Solicitors Regulation Authority (SRA) introduced the SRA Transparency Rules in 2018? ‘Buying legal services is not like buying baked beans’, ‘race to the bottom’ and ‘devaluing the profession’, were regular objections.
Heinz Beanz are not the cheapest beans on the shelf; Fortnum and Mason sold them in 1901 as a luxury. In the UK, 540m cans are consumed each year. Sneering at beans is not a good look!
The SRA Transparency Rules require publication on firms’ websites of costs information for certain services. For individuals: residential conveyancing; uncontested probate; immigration applications and appeals; summary only, single hearing road traffic offences, and advice and representation for employees for unfair and wrongful dismissal. For businesses: advice and representation for employers (as for employees); debt recovery up to £100,000, and licensing applications for business premises.
Costs information covers: total/average/range of costs; basis for charges; experience/qualifications of fee earners and supervisors; description and cost of any likely disbursements; which services are included in the price and details of services that might reasonably be expected to be included but are not, and why clients may have to make payments for services themselves under conditional fee agreements.
Firms must also publish their complaints handling procedures, including how and when a complaint can be made to the Legal Ombudsman and the SRA. The SRA provides specimen wording worth adopting on its website.
The Competition & Markets Authority was instrumental in pushing the transparency agenda forward when it reported on the legal sector in 2016. The Legal Services Consumer Panel has advocated for transparency for many years. Of course, conveyancing scale fees, abolished in 1973 as part of deregulation to increase competition, were better than nothing. Perhaps adaptation rather than abandonment would have brought the transparency discussion forward by a few decades.
The SRA states that publication of rates has an impact on what consumers believe about the affordability of legal services. How often have we heard our target market, that cornucopia of potential clients, complain that solicitors are ‘expensive’? Where is the evidence against that widely held belief? Hidden in our offices, until now. Being transparent and proud about our charges enables us to debunk the ‘unaffordable’ myth. Our work has high value, and we should not be afraid or ashamed to tell the world what that value costs without underselling ourselves.
Publicly funded work is excluded from the SRA Transparency Rules. That makes sense, due to the nature of the services covered by the current requirements. Why not be transparent about payment for legal aid work too? That would put a different complexion on ‘expensive’ solicitors.
Transparency provides an opportunity to compete on value and to shout about it. The days of secretly ‘weighing files’ to calculate costs have gone. The discipline of transparency encourages firms to think realistically about how much services cost to provide. That discipline may help to identify that some work is unprofitable. Law firms must make money to survive and must not be embarrassed to say so. Some firms will look at the competition and reduce fees. Others will discover that they have been charging below the local going rate for years. Some will decide that they want only those clients who are willing to pay for the level of service that the firm finds it acceptable to provide. To compete on price rather than value is to miss the point of service provision. We should be more confident about telling clients why we are worth it.
The SRA has announced that transparency enforcement started on 21 January 2021. Nine firms have been sanctioned for breaches this year. Yes, there is additional work involved in getting the public offering right. That work is an investment in our brand, business, and people. What we say provides reassurance to website shoppers that we can be trusted and that we are a safe home for their work. We are comfort food, just like beans on toast, whichever brand they choose.
Susan Humble is a senior partner at Susan Humble at RIAA Barker Gillette riaabarkergillette.com She is former CEO of the Solicitors Disciplinary Tribunal