Law firms setting fixed fees and publishing them online are likely to be cheaper than their competitors, research for the oversight regulator has found.
The Legal Services Board today publishes research based on surveys of more than 1,500 law firms on pricing for 15 common legal services for individual clients.
The results show that prices of commoditised services varied by at least 37% between the cheapest and most expensive providers, with significant differences between the north and the south-east.
Firms that displayed prices on their website were more likely to offer a cheaper service, while firms working on fixed fees were cheaper than those on variable fees in every category of work.
The functioning of the legal services sector will come under scrutiny this summer with a report by the Competition and Markets Authority (CMA).
One of the CMA’s tasks will be to decide to what extent law firms should be forced to reveal their prices upfront and display them online. A fully functioning price comparison website for legal services could be an outcome of its recommendations.
Neil Buckley, chief executive of the LSB (pictured), stressed he was not arguing that cheaper providers were better options for clients, nor that lawyers were too expensive for the services they were offering. But he urged firms to volunteer price information on their websites and for price comparison sites, saying that this could benefit both consumers and providers.
At the moment, 'substantial’ savings on commonly purchased legal services - especially those which do not require face-to-face meetings - can be made by searching the market across England and Wales.
For consumers in the south-east in particular, the research showed that a premium may be paid for direct, locally sourced legal services.
’There is still some way to go before all consumers can be confident of finding the legal services they need at a price they can afford,’ said Buckley. ’Firms who are yet to adapt will have to look at what their competitors are providing.’
Around 17% of the firms surveyed display prices on their website. More than three-quarters of firms now work on fixed fees in all conveyancing, wills and lasting power of attorney matters.
Firms that were more transparent on costs charged on average £50 less for conveyancing sale (freehold) services. On average, fixed fees providers were £64 cheaper in this category.
The mean price to purchase a freehold property was £722 and with a leasehold property purchase costing £815 on average.
The mean cost of an uncontested divorce for petitioners was £722 and £453 for the respondent. Where children were involved, the average cost was £953.
The average cost for an individual standard will was £168, for lasting power of attorney £414, for grant of probate it was £829 and for estate administration it was £1,926.
As would be expected, the difference in price was greatest for cases categorised as complex divorce cases involving children, complex divorce cases involving assets and estate administration.
The research found no significant differences in cost between alternative business structures and other firms.
The majority of firms (67%) stated their prices had stayed about the same over the past 12 months, with just 4% reducing prices.
LSB strategy director Caroline Wallace said the regulator was not advocating a ‘race to the bottom’ on price, but equally said consumers should be protected if firms did try to sacrifice service levels.
‘You can’t get cheaper by cutting corners and making it not fit for purpose. This is a market where it is not just price that counts, but levels of service too. We are not arguing you always go for the cheapest but you should be in a position to make an informed choice.’
Law Society chief executive Catherine Dixon said: ‘It is important that people can make informed choices when buying legal services. In the current legal services marketplace, paradoxically solicitors - amongst the most qualified and trained - are the most regulated, while providers who may have no legal training are not regulated. The Competitions and Markets Authority is reviewing legal services. There is an opportunity for better, simpler and more cost effective regulation that ensures consistent client protection and value for money across the whole of the legal services market.’