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There’s a price to pay for slashing costs
Thursday 12 July 2012 by John Hyde
You’d have thought that, after writing about legal services for so long, I’d know better than to jump at the cheapest offer when it came to my turn. Sadly not.
Recently I completed a housing transaction with a pile ‘em high, sell ‘em cheap online conveyancer. Wooed by a razzmatazz website and fixed-fee offering, I secured a cool £100 discount on the local solicitor’s quote. What could possibly go wrong?
As it turns out, quite a lot. Phones went unanswered, correspondence was unattributed and an extra, unforeseen, cost thrown in halfway through the transaction.
By all accounts, it’s a familiar tale and the Legal Ombudsman this week spotted the trend. In his report for the annual review, chief ombudsman Adam Sampson noted how price competition had steered some firms’ behaviour from ‘cheap and cheerful’ to ‘cheap and shoddy’.
Too many law firms are promising what they can’t deliver, cutting corners and making unrealistic offers on cost. Consumers are being lead on to think they’re getting a bargain when it fact their case is being put at risk by the rush to the bottom. I don’t deny there are firms that don’t perform exactly as they promise (though there are plenty more offering an excellent service I’m sure).
But why are consumers making such ill-informed judgements? Why are they rushing to the discount aisle like shoppers crowding round the nearly-out-of-date items in a supermarket?
Could it be anything to do with the drip-drip endorsement of fixed-fee offerings by the Legal Ombudsman himself?
In March, Sampson told the Guardian that with ‘cheaper, more predictable pricing, one of the key barriers between citizens and legal service will be removed’. At the time he warned that new providers were coming to the market with a new pricing structure that would blow traditional firms out of the market.
In the same month, Elisabeth Davies, chair of the Legal Service Consumer Group, advised consumers to ‘shop around for the best deal’.
Of course, the last thing Sampson and Davies would want is to see a reduction in standards, and, to be fair, both have consistently told consumers to ask questions as well as hunt for bargains. But at the moment lawyers are being given conflicting advice.
On the one hand, firms have to slash their prices and compete with the likes of the Co-op, whilst on the other they’re being warned not to reduce the level of service.
If consumers want to pay less, that’s their right. But inevitably they may have to pay the price in the end.
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