Legal firms must come clean on pricing

15 December 2016
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Legal service providers must make it easier for consumers to shop around and compare costs, according to the Competition and Markets Authority (CMA), following a year-long study of the sector.

It found that competition between providers of legal services is not working well and that both consumers and small businesses are finding it hard to obtain information on costs, quality, and service, making it difficult to choose the most appropriate option for them.

The CMA estimates that consumers in England and Wales spend as much as £12 billion a year on legal services, covering family and employment law, commercial law, wills and probate.

 

In order to tackle the problems, the CMA has made a number of proposals that it hopes will make it easier for consumers to shop around and get good value for money.

These include:

  • Requiring providers to display information on price, service, redress and regulatory status. Consumers should be able to get some pricing information online – something only 17% of providers currently offer.
  • Revamping the Legal Choices website as a starting point for consumers seeking advice or guidance.
  • The introduction of comparison services. Currently only 22% of people compare services before appointing a lawyer.
  • Encouraging providers to engage with review and feedback services so potential customers can benefit from the experience of others before making their choice.
  • A recommendation that the Ministry of Justice extends protection on its existing redress scheme to include unauthorised providers.

 

Commenting on the study, Rachel Merelie, acting executive director for markets and mergers at the CMA, says: “You might not need a lawyer very often but when you do it will often be at a crucial point in your life – whether that’s buying a property, resolving a dispute or getting expert advice on financial and employment matters. So the transparency, affordability and accessibility shortcomings we have identified are a real concern.”

 

She adds: “Consumers who are equipped with the information they need to assess the services on offer and choose the best deal for them, will not just benefit personally but will also help drive competition, quality and innovation across the whole market. That means a better outcome for everyone and, importantly, fewer people will be discouraged from seeking the help they need.”

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