Clients found to be overpaying £500 million a year to legal service providers

By Lee Dixon In Legal News

As the Competition and Markets Authority publishes its final report into the legal market, another report produced by The Law Superstore has shown that a significant variation in pricing for legal services could be causing clients to overpay by £500 million.

From a survey canvassing over 2,000 consumers it was found that the disparity in costs for services were significant, with commoditised services such as Grant of probate having a difference in percentage terms of 100%. For other relatively simple, commoditised services such as conveyancing that variation was found to be 52% between upper and lower quartiles.

The study, which was carried out by Opinium between 26 September and 3 October 2016, echoes findings by the Legal Services board, which earlier in 2016 found that people were regularly paying between double and quadruple the price they needed to in order to access legal help.

Legal Service Upper quartile Lower quartile Inter-quartile range Difference in 0% terms
Estate Administration
Grant of probate £900 £450 £450 100%
Divorce
Uncontested - Children £1,100 £583 £517 87%
Conveyancing
Sale & Purchase (Freehold) £1,500 £990 £510 52%

With such significant differences, it is hardly surprising that just 9% of the 2,008 consumers polled are confident they understand the price of common legal services such as conveyancing, divorce wills and probate.  Yet worryingly, The Law Superstore’s analysis also shows that just 22% say they have always used legal services when they have needed them, showing a huge latent market of people who don’t get the support they need.

The Law Superstore’s CEO, Matthew Briggs, said: “We support the CMA wholeheartedly in driving change in the legal profession. These figures show that we are a long way from consumers getting access to the right support, at a fair price and that needs to change. Why should the British public continue to miss out?

“There are many progressive firms who are already being clear and transparent about costs and service levels.  As the CMA concludes, these leaders show things can be done differently and better.  We believe consumers have the right to understand how much a straightforward legal service should cost and what they will get for the money they spend.”

The majority (80%) of consumers polled by The Law Superstore were in support of legal firms displaying their prices on their website.  Just 20% felt that the services they were buying were so complex they could only be quoted following a conversation with a law firm.  When asked what they were looking for from a legal firm the highest score was value for money (51%), which compares to just 21% who are looking for lowest price.

Matthew said:

"We live in a market economy where digital-savvy consumers have benefitted from the greater competition when buying financial services, financial advice and utilities. We don’t think legal services should be any different.”

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