Solicitors point out that every residential conveyancing transaction is different – so how to deal with ‘price transparency’ requirements that assume the service is commoditised?
Queuing for a car-washing service in Scotland last year – one man with a power hose – I rolled down the window and asked him how long the wait was. ‘How long is a piece of string?’ he said shrugging. ‘He does that all day, every day,’ I reflected, the car window back up. ‘He really should know.’
The Solicitors Regulation Authority sees several areas of legal advice in the same way I view this car-washer in Roxburghshire. Responding to Competition and Markets Authority concerns that the public do not have the information to shop around for legal services, and are therefore at a disadvantage, from December this year the SRA will require information on price and fees to be published prominently on solicitor firms’ websites.
For many residential conveyancers, there is an objection. The requirement assumes transactions are roughly the same – a necessary service that can, to a high degree, be ‘commoditised’.
Certainly attendees at the Gazette’s residential property roundtable a few weeks ago reflected that frustration.
‘I think there’s a difficulty for consumers in the market in differentiating the different products that they’re buying, as far as conveyancing is concerned,’ was the view of Russell-Cooke partner Nigel Coates. ‘It’s almost impossible for the consumer to know what they’re paying for in terms of what they’re getting by way of service. We all like to think that we distinguish our services from other people’s services in the way that we deal with things, but it’s incredibly difficult for the consumer to form a judgement.’
Goodman Derrick’s Lara Murrell was similarly sceptical: ‘Is it going to be that transparent when you’ve got to qualify everything on the list or schedule of fees? Is it really going to be any clearer?’
And even though ‘fixed fees’, with caveats, are common in residential conveyancing, not all do it, Farrer & Co’s Laura Conduit related: ‘We don’t usually offer fixed fees, because the scope is very uncertain… With one client, you might be supporting them and hand-holding them through the author process. With another client, they might need very little interaction and very little advice. It entirely depends on both the property and the client, and that combination can mean you’re at one end of a fee scale or another.’
We have been publishing details of our prices across the board – not just for conveyancing transactions – for some 12 years. We have no fear of publishing our prices and never have done
Russell Conway, Oliver Fisher
But despite such objections, as with much of the ‘liberalisation’ and competition agenda, the idea of price transparency proved unstoppable.
SRA chief executive Paul Philip was adamant on 2 October: ‘Publishing information on price, services and protections will not only benefit the public, but will also help those who deliver these services win business and connect with their customers. We are providing guidance and support for firms to assist with meeting the new requirements and making the most of the opportunities they bring.’
Many residential conveyancers contacted by the Gazette for this article were in the process of deciding what they will publish, with final decisions being made in the next fortnight.
‘We are working on this at present with initial drafting done, I await responses from our marketing and compliance teams,’ runs a typical response. ‘We are in the middle of discussing exactly what will be going on the website,’ another says. ‘I expect that we will make a decision in the next week or so. It’s just something we have to resign ourselves to.’
How to comply?
The rules on price publication, the ‘Transparency Rules’, need to meet standards that are general in places, and specific in others. The rules’ headline purpose, the SRA says, is to ‘make sure consumers have the information they need to make an informed choice of legal services provider, including understanding what the costs may be’.
For residential conveyancers, that must include:
- Freehold sale or purchase;
- Leasehold sale or purchase; and
- Mortgages and remortgages.
‘This information must be published in a prominent location on your website, which is accessible, clearly signposted and easy for visitors to find,’ the SRA says.
Perhaps having read one contribution to the Gazette’s letters page, the regulator adds: ‘For those without a website, this information must be readily available upon request in another format. People should not be required to provide detailed information before they can obtain it.’
Then there are mandatory requirements (see box), though the SRA makes a nod to unforeseen events. ‘The rules do not require you to publish a binding quote for each and every scenario which you may deal with,’ it adds. ‘For example, pre-empting unusual complexities or that a client may not follow your advice.
‘Outline factors that would typically increase the cost of the service,’ the SRA advises. ‘For example: if legal title is defective or part of the property is unregistered; if you discover building regulations or planning permission has not been obtained; if crucial documents you have previously requested from the client have not been provided.’
Not all practitioners contacted by the Gazette were negative about the required move to price transparency. One in particular, West London firm Oliver Fisher, has a long experience of offering ‘price transparency’.
‘We have been publishing details of our prices across the board – not just for conveyancing transactions – for some 12 years,’ senior partner Russell Conway tells the Gazette. ‘We have no fear of publishing our prices and never have done.’ For conveyancing transactions, the firm has an online ‘calculator’ which produces a price for potential clients without requiring phone or email contact.
‘It is quite a sophisticated calculator and deals with all manner of enquiries, inclusive of sales and purchases, but also deals with remortgages and other types of transactions,’ Conway adds.
The guidance produced by the SRA, he says, seems to indicate that the price transparency does not extend to enfranchisement and lease extensions, ‘but we are already looking at ways we can assist our client by publishing guideline prices for such matters.
‘We take the view that we are in business and have a large number of competitors out there. Our job is to give the consumer as much information as possible so that they can make informed choices,’ Conway says.
Oliver Fisher is undertaking a similar exercise for probate, employment claims, immigration and debt – areas also required under price transparency – and may also produce price and service information for matrimonial advice.
Conway reflects: ‘When we first put our prices online, some of my colleagues in the profession expressed surprise, but it has certainly done us no harm and clients do like to know how much they are having to pay. My guess is that this is very much the way forward – fighting against it is going to do no good as essentially the clients do need to know the price of a transaction.’
What of unforeseeable events that make a transaction hard to price accurately?
‘Obviously if a straightforward piece of conveyancing where we have quoted a fixed price becomes dreadfully complex, we would have to revisit the price,’ Conway replies, ‘but common sense would dictate that this would only happen in rare circumstances’.
His conclusion will be welcomed by the SRA: ‘We take price transparency very seriously and will continue to give the clients what they want – which is honesty about costs.’
‘MANDATORY REQUIREMENTS’ ON PRICE
Firms must meet the following tests in publishing information on price and service:
- You must provide price information prominently, in as clear and understandable a format as possible.
- You must specify whether stated prices include VAT.
- You must specify exactly what is included within the price displayed. This is important even if you quote a fixed fee to avoid confusion among consumers about what they might need to pay extra for.
- If you publish a range of costs, you need to set out the basis for your charges, including any hourly rates and the types of factors that will determine what the final price will be.
- If you offer your services in different ways and the delivery model impacts on the price, make this clear. For example, if you charge a higher fee for face-to-face services than for strictly online services.
- If using an online quote generator, the generator must produce a quote directly without requiring any additional contact, for example someone calling to discuss the quote.
The SRA’s suggested template for public price and service information is available online at tinyurl.com/ya5ze4au.
Half-day conveyancing convention 2019, SRA competence: A1, A2, A4, Birmingham – 14 May and London – 6 June
This year, we will be holding our annual half-day conveyancing convention in both London and Birmingham . These bespoke half-day conventions will focus on key issues affecting modern property practice. They will bring together some of the most influential stakeholders in the industry, including representatives from the HM Land Registry.