THE LAW SOCIETY GAZETTE
“Don’t sneer at solicitors for not publishing prices”
The above article (link below) appeared in The Law Society Gazette, 13 April 2017, under the heading:
The introduction of the article stated;
“It should be self-evident why solicitors cannot be more open about their prices.
They are not retrograde obstructionists, running scared of scrutiny and determined to keep clients in the dark.
They simply cannot set and publish prices for many complex pieces of work when there are so many differentials involved. To paraphrase one American, there are too many ‘known unknowns’ at play here.
There will be strands of work where firms can offer guidance, perhaps a price range, to let consumers know where they stand.
But to require them to be specific and commit to prices for clients yet to even get in contact is a road to ruin – or at least unpaid bills and the small claims court.
There may well be other industries where prices are fixed and on show. But the law is not a ‘fruit and veg’ stall – it is a dynamic and difficult sector, with feet-dragging opponents, and unpredictable and sometimes costly pitfalls along the way”.
The article then continued to express concerns that the SRA “is being leant ” – The word leant on was in bold and linked to an article published in the Law Society Gazette dated 15 December 2016 –in regard to The Competitions Marketing Authority’s (“CMA”) Report on the legal market place under the headline : Firms must publish price information- https://www.lawgazette.co.uk/practice/cma-report-firms-must-publish-price-information/5059157.article
It is not for me to comment on, if the CMA/others are “leaning on” the SRA as I am sure the CMA/others and the SRA will reply to this article in due course. What is relevant is the CMA conducted extensive research into the legal market place in 2016. Concluding that transparency on fees/costs is a major issue. The Law Society and specifically the regulation team did participate in this research process, in fact attending the CMA’s round table meeting in September 2016. The Law Society’s regulation team members sat on the same table at this meeting with representatives of the Legal Ombudsman, Ministry of Justice and others.
The direct/indirect result of this process led the Law Society to draft; The Price and Service Transparency Toolkit, ( see link below) which was published the week before the CMA report was published.
The introduction stated:
“Price and service transparency is not about providing more information, as too much can cause confusion. The key is to provide the right information which allows those seeking legal services to assess the value of the service”.
Page 5- Stated:
Disbursement is a well understood term in the legal world but it may not be a familiar term to clients. Disbursements are defined by the Solicitors’ Accounts Rules 2011 (SAR) as
“any sum that you spend or are going to spend on behalf of your client or trust, including any VAT element12”.
The SRA is clear that a firm’s overheads are not considered to be disbursements13. The following should not be described as disbursements:
- annual subscription costs and transaction fees for using online solutions to manage business processes,
- telegraphic transfers,
- administration charges such as postage and photocopying
The bottom item in my professional opinion covers the majority of bills submitted to clients by law firms in England & Wales.
Let’s make this simple, the SRA and the Law Society have now categorically stated that law firms CANNOT charge as disbursements –
“ administration charges such as postage and photocopying”.
I have raised this specific issue with the Regulatory Team, of the Law Society. I met them at the CMA Round table meeting last September and subsequently at their offices in Chancery Lane in November 2016. So they know my views on this subject.
The Law Society Gazette as the mouth piece of the legal profession must now clearly state that these overheads are not chargeable to the client.