Price Transparency Guidance - Law Society of Scotland

Last Updated: 1st May 2020

We have produced an overview of how the new Price Transparency Guidance issued by the Law Society of Scotland will affect your LSoS regulated law firm when it comes into effect on 1st July 2020.

The guidance was produced to reflect the findings of the Competition and Markets Authority Report (CMA) Legal Services Market Study regarding price and service transparency.

The study concluded that consumers were disadvantaged by the lack of readily available price information from providers of legal services, thus preventing them from making informed choices when seeking choosing a provider.

Whilst the focus of the market study was legal services providers in England and Wales, the Law Society of Scotland has also sought to act upon its findings for the benefit of both its members and consumers of legal services, noting within the new guidance that it "has a statutory duty and objective to promote the interests of the public and competition in the provision of legal services".

CHANGE HISTORY

01/05/20 - First Draft.

What is the new Law Society of Scotland Price Transparency Guidance?

The new Law Society of Scotland (LSoS) Price Transparency Guidance means that firms offering legal services to the public are encouraged to publish price information upfront.

The guidance was issued following a price transparency consultation with the society’s members in 2018. The decision to introduce guidance (and its subsequent approval) was made by the Regulatory Committee of the Law Society of Scotland.

The guidance does not apply to business-to-business services (B2B), but does apply to all business-to-consumer (B2C) services, where the service is being supplied to an individual rather than a business - unless the work is funded by legal aid.

The guidance seeks to cover any service offered to individuals by your firm, even if they are non-legal in nature. The guidance states that it would cover “estate agency work as well as the conveyancing work carried out by the firm”, along with standard legal services such as employment, wills and family matters.

If your firm has a website, you are encouraged to display price information in a prominent location that is clearly signposted - you can find more information in the “How should I update my website to meet the Price Transparency Guidance?” section below.

If your firm does not have a website then you should make the information available to consumers by other means - see the “How can I publish my prices if my firm doesn’t have a website?” section below for more details.

When does the Price Transparency Guidance come into effect?

The Price Transparency Guidance was initially due to come into effect on 1st April 2020, however this was pushed back to 1st July 2020.

How does the LSoS Price Transparency Guidance affect my firm?

Law Society of Scotland (LSoS) regulated firms may wish to implement changes within their practices to adopt the new guidance as best practice, before it comes into effect on 1st July 2020. The Law Society of Scotland notes that:

“while not a practice rule, all solicitors are encouraged to follow the guidance as a matter of best practice. In the event of a complaint being raised in relation to the guidance, a solicitor would have to justify their reason for not following it.”

The decision to introduce guidance differs from the approach taken by regulators in England and Wales, who introduced transparency rules and regulations that their member firms must now abide by.

The new guidance was initially due to come into effect on 1st April, however it has now been delayed until 1st July 2020.

What are the key components of the new guidance?

1. The Law Society would like consumers to be able to find price information at two key stages:
   1. When they are initially searching for a service to get a general idea of price.
   2. When a client is likely to engage your services and at which point they may provide you with further detail of the matter, at which stage compliance with Practice Rule B4 (Client Communication) would also apply whereby the firm is required to provide:
      1. An outline of the work to be done;
      2. An estimate of the total fee or the basis upon which the fee will be charged including VAT and outlays;
      3. Details of any contribution towards Legal Advice and Assistance or Legal Aid and details of the effect of preservation or recovery of any property if relevant;
      4. Who will do the work and
      5. Who the client should contact if they have any concerns or complaints.
2. The price information should be made available through the firms website (if one exists) or else be otherwise readily available
3. The price information should be provided in a suitable and understandable form (whether that is hourly rates, fixed fees or otherwise) and include applicable taxes such as VAT
4. The language used to set out the price information must be clear and avoid legal terms where possible.
5. The price information published does not need to be a binding quotation, only and average or typical price.
6. Your firm might find it beneficial to publish other information alongside the prices, for example the expertise of your firm in the service being sought, or the quality of customer service.
7. Firms aren’t expected to pre-empt and price for unforeseen complexities that may arise during the course of a transaction at the outset, however if complexities result in a need to charge a higher fee, the client should be informed of the revised costs at the earliest opportunity.

What are the mandatory requirements of the guidance?

There are no mandatory requirements to implement the guidance as they are not rules, however the Law Society of Scotland notes that:

“while not a practice rule, all solicitors are encouraged to follow the guidance as a matter of best practice. In the event of a complaint being raised in relation to the guidance, a solicitor would have to justify their reason for not following it.”

How should I update my website to meet the Price Transparency Guidance?

If your firm has a website, you are encouraged to display price information in a prominent location that is clearly signposted. Consumers are also expected to be able to access the information without needing to provide personal information (such as their name or email address) beforehand.

Your firm can either add a price list for various services, or for certain services you might find it is easier to offer an instant fee estimate by adding an online quote calculator to your website.

1) Publishing Prices as a Price List

The Law Society of Scotland has published several examples of how a firm could choose to publish price information. They are not intended to be templates, and firms are advised to choose the best way to publish price information based on their own business models.

The examples provided consider how price information could be published under four different models:

1. Fixed Fee (divorce, property sale and wills are offered as examples)
2. Range of Costs (examples given for wrongful dismissal and motoring offences)
3. Hourly rate (the example looks at the average number of hours for a divorce matter and rates for various levels of fee earner in order to arrive at a price)
4. Broken down by stage (using an employment tribunal as an example where a case may be settled at an early stage, or else progress to later stages at additional cost)

2) Publishing Prices by adding an Online Quote Calculator to your website

Studies have shown that consumers of legal services are more likely to get in touch with you if they can get an instant quote. Furthermore, research conducted by Leads for Lawyers in England and Wales showed that 56% of conveyancing quotes are requested by consumers outside of business hours.

By adding a tool such as QuoteXpress to your website, you can allow site visitors to obtain a tailored fee estimate from you directly. Once they have the estimate they can proceed and get in touch to discuss their matter further should they wish.

Services such as conveyancing and wills are relatively straightforward to price up and offer through an instant quote calculator. Try out the QuoteXpress Quote Calculator below and see for yourself.

THE QUOTEXPRESS WEBSITE QUOTE CALCULATOR FOR CONVEYANCING IN SCOTLAND

Note: This is only an example. You can customise the colours and pricing to meet the needs of your firm.

How can QuoteXpress help?

QuoteXpress can help your firm meet new transparency rules and guidance. The QuoteXpress Instant Quote Calculator can easily be added to your website and can and help your firm meet the requirements of the new rules. Start your free 30 day trial today.