TRANSPARENCY TIME
On 6 December 2018, the Solicitors Regulation Authority (SRA) issued new rules around pricing transparency. This was driven, in part, by over 25% of complaints received concerning fees and costs charged, and to give you and me – potential customers – the opportunity to make more informed choices.
At first glance, the new rules are relatively limited in scope, applying to areas such as residential conveyancing, and certain immigration, employment tribunal, debt recovery and licensing applications. Information required to be made available includes the nature of services offered and average cost of these (including any VAT and disbursements) if no precise number can be provided. So far, so good – and all part of good client and matter management.
For a client, receiving a law firm invoice higher than expected is never a pleasant surprise. The mantra ‘no surprises’ will serve us well. Invoicing is one of the most intimate, yet poorly executed, touchpoints in any client relationship. It is the ‘L’Oréal moment’. Is your firm worth it?
According to Paragraph 1.6 of the Transparency rules, this information “must be clear and accessible, and in a prominent place” on the firm’s website. However, there is opportunity here for firms to embrace the broader theme addressed as well as the immediate practicalities.
Pricing – done well – helps to strengthen client relationships. It should be viewed as a process, starting with a conversation with the prospective client and continuing throughout the duration of the matter (and potentially beyond). At the outset of any potential matter, firms should be striving to align goals and objectives with those of the client, and against as clearly defined a scope as possible, whether this is a major M&A transaction (not covered by the new rules) or a debt recovery (which is). This means active engagement with clients, to understand what is of most value to them and how we can best structure the work accordingly, while making an appropriate level of return. This is what we expect everyone else to do, so why not us? Also, resist the temptation to add a list of extensive assumptions and caveats to any pricing provided. Good practice is no more than three to four key (and substantive) assumptions, rather than the legal equivalent of War and Peace.
Once the matter commences, there should be regular, clear client communication throughout, covering status of the matter, costs incurred to date, next steps and estimated future costs (in other words, good matter management).
Finally, for a client, receiving a law firm invoice higher than expected is never a pleasant surprise. The mantra ‘no surprises’ will serve us well. Invoicing is one of the most intimate, yet poorly executed, touchpoints in any client relationship. It is the ‘L’Oréal moment’. Is your firm worth it? Unfortunately, we often see invoicing as an administrative burden rather than another client relationship opportunity.
Whether you provide the legal services covered by the new rules or not, the concept of greater pricing transparency simply makes more business sense.
Doesn’t it?
This article can be found in Briefing‘s April magazine: Stick with it
