Treat clients as customers or you’re doomed, says Ombudsman
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.
‘In most businesses, the customer holds sway and can pick and choose which services to buy from which provider. This type of relationship is increasingly the norm even in the legal sector.’
Costs complaints are always linked to a lack of communication, with consumers baffled by jargon like ‘disbursements’ and angry that initial estimates have been exceeded, he said. New entrants to the market, buoyed by the liberalisation promised by alternative business structures and non-lawyer ownership, now present unprecedented challenges for the traditional firm.
Sampson added: ‘What we are seeing now are market changes forcing lawyers to face the possibility that their traditional view of how they go about their daily work may have to undergo a fundamental change.
‘Those who adapt to the market, it appears, will survive: those who cannot may be doomed to disappear.’
The report suggests a 10-point checklist for lawyers to ensure they will be covered by complaints about costs. It includes offering clear information on websites about costs and before initial consultations.
Firms must create a pricing structure and offer analysis of the consumer’s costs benefits. If the lawyer can provide a reasonable estimate, clients should be told if costs are nearing the limit and why, with a meaningful breakdown provided to explain the escalation. Certain services such as photocopying should form part of the overall service cost rather than be itemised, the report adds.
The ombudsman also wants to see the firms has taken time to explain terms and conditions, kept to any price caps and retained receipts for payments made, with lawyers ‘vulnerable’ if they cannot be produced.
Most importantly, the client care letter should include the reason a customer chose their lawyer, the course of action taken, what work will and won’t be carried out, standards and timescales of work and the likely costs of the case.
‘It is not enough for a lawyer to agree the cost of a service at the outset,’ said the report. ‘Many complaints arise because lawyers have not updated the customer about the cost of the case as it progresses and all too often lawyers fail to give customers the opportunity to try and control their costs.’
As well as advice for lawyers, the ombudsman has produced a guide for consumers to ask the right questions at the outset of cases.
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.’
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