Don’t cut corners, LeO warns firms
Competition from new market entrants is forcing law firms to offer services and prices they cannot hope to deliver, according to the Legal Ombudsman. In his second annual report, Adam Sampson (pictured) raises concerns that under-pressure firms are cutting corners and making unrealistic promises.
He also warns of a potentially ‘disastrous’ risk of a legal sector equivalent of recent mis-selling scandals.
Sampson says there is no threat to professional ethics from new entrants to the legal market – but that existing firms offering fixed fees must be monitored in case ‘cheap and cheerful tend into cheap and shoddy’.
‘Fixed pricing in legal services is not always possible,’ he says.
Price competition is also forcing firms to consider commoditisation and using less qualified individuals, or IT systems, to complete transactions.
Sampson said this was risky, not least because of the unreliability of automated systems and the different nature of individual cases, and service sometimes falls short of what consumers expect.
Sampson said there have been a number of complaints from customers who lost money on unrealistic no win, no fee promises or confusing legal insurance policies.
According to a poll commissioned by the ombudsman 74% of people do not know what financial cover their legal expenses insurance policy provides.
He said the arrival of new commercial products is to be celebrated but warned it would be ‘disastrous’ if the legal sector was exposed to the risk of its own version of the banking sector’s payment protection insurance scandal.
During the last financial year, the Legal Ombudsman’s Office undertook around 8,400 investigations from the 75,000 enquiries that were lodged.
These resulted in 7,455 cases resolved, 18% of which related to family law, 15% to conveyancing and 12% to wills and probate.
The office cost £17.3m last year to run – lower than the £19.7m budget – and was paid for through Ministry of Justice funding, practising fee levies and charges made against firms subject to three or more investigations.
Comments
Told you so
Well, solicitors warned the last government that the commercial imperative would not sit easily with traditional legal practice but they took no notice. Spurred on, no doubt, by the ridiculous consumer lobby. Today we heard that the French Bar had followed the Germans and New Yorkers into opposition against ABSs. How long before the City of London realises it is isolated and starts to lobby for the scrapping of ABSs or Brussels outlaws ABSs in the EU. We can't run an international legal system based on Australia alone.
Hang on! Wasn't it Mr.
Hang on! Wasn't it Mr. Sampson and the like who were telling consumers (not clients) to shop around for the cheapest possible deal, and demand fixed fees. Solicitors were told to be more businesslike to compete with a plethora of new providers who would supply the market with top quality fixed price legal services. Relentless competition would drive prices down to virtually nothing, while efficiency levels would rise to degrees never seen before and everyone would benefit.
Are they now telling us that this isn't true.
That was then and now is now
That was then when New Labour and then the Tories were effecting transfer of legal services provision to their rich non-corporate commercial friends and they had to dream up a rationale which would win the press and media over. Now it is different. The transfer is taking place so the pretence of cheap legal services can be ditched and the solicitor can be squeezed out of the market by a combination of over regulation and loss leader pricing by the new concerns. Meanwhile the hardly regulated press bleats on about when lawyers are to have their own Leveson. As if we had not Clementi and as if there wad no SRA and BSB.. This country is becoming a third world entity manipulated by propogandists. The Rule of Law is dying.
What a clown this man is! He
What a clown this man is! He gets what he wanted-and then bleats about it. Well, it is called "commercialism"-enjoy!
Yes but it wasn't as long ago
Yes but it wasn't as long ago as the New Labour era when he was spouting this:-
Elisabeth Davies, chair of the Legal Service Consumer Group, said: ‘We welcome the Legal Ombudsman’s guide on costs, which should help prevent consumers and lawyers from getting into unnecessary disputes.
‘Our advice to consumers is to shop around for the best deal, ask lots of questions and don’t be afraid to challenge your lawyer if you are unhappy about their fees.’
and
Law firms will not survive if they continue to resist consumer demands for fairer pricing, the Legal Ombudsman has warned. A report published today states that up to a quarter of the 90,000 annual complaints relate to costs, where a client has felt overcharged, confused or been surprised at the charges presented by their lawyer.
Chief ombudsman Adam Sampson (pictured) believes the majority of complaints he sees could, and should, have been avoided. He urged firms and lawyers to drop any reluctance to recognise that clients are also customers.
‘The notion of "customer" turns the traditional relationship between lawyer and client on its head,’ said Sampson.
These quotes are from as long ago as 6th March 2012 (http://www.lawgazette.co.uk/news/treat-clients-customers-or-you-re-doomed-says-ombudsman).
I guess all the "canapes and refreshments" (see the register of interests and benefits on the Legal Services Board website) which our beloved Dear Ombudsman receives have had adverse effects on his memory?