Kerry Underwood

SMALL LOCAL FIRMS PREFERRED BY CLIENTS AND OMBUDSMAN’S ADVICE ON GOOD COSTS SERVICE

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This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

Here I look at two recent and helpful publications, and given the source of those publications those are slightly surprising words from me!

The Legal Services Consumer Panel Tracker Survey 2019 makes interesting reading.

This year’s report is more fact focused and its findings stem from YouGov survey of 3,589 users of legal services over the last two years, which is a significant sample.

This strongly anti-lawyer body finally appears to have recognised that “shopping around” is often a bad thing for clients, as price comparison sights are notoriously misleading.

By definition any lawyer trying to get work by being cheap is unlikely to be much good, just as in any other area of life.

This is reflected in the fact 77% of clients find it easy to understand price information from lawyers, but this drops to just 38% amongst those shopping around finding it easy to make a comparison between different providers, sharply down from 58% last year.

These figures need to be treated with a little caution, as, to put it bluntly, those shopping around online for legal services are likely to be less intelligent than those realising the importance of quality and reputation, and therefore less likely to understand.

Another factor is that in the United States and the United Kingdom, but almost nowhere else, it is seen as fashionable to shop around for price, rather than seeking quality, so there may be over-reporting.

French people do not boast about cheap meat full of water from a supermarket.

The proportion of clients receiving a face to face service has remained the same for the last five years, at around 45%.

The increase in services provided online largely reflects a drop in legal services being delivered by post.

In other words, postal delivery of legal service has switched to online delivery, but face to face contact remains as popular as ever.

Client satisfaction is extraordinarily high, with 87% saying they were satisfied with the outcome of their legal matter and 84% being satisfied with the service they received.

Online satisfaction was the lowest, at 78%, compared with 88% for those receiving service face to face or over the phone or through the post.

In 2012, 14% of people received legal services through legal aid, a trade union or their employer, but this is now down to 5%, and just 1% received legal services through their trade union.

Interestingly as many people had their legal services paid for by their employer as by a trade union.

73% of clients said that they had a wide range of choice.

The most important factors when choosing a provider were:

                                                    %

reputation                                   79

price                                           72

specialism                                  69

 

Interestingly reputation is rising in percentage terms as the most important factor for clients.

Overall 51% of clients had a fixed fee arrangement and the highest areas were:

                                                  %

will writing                                69

conveyancing                            63

power of attorney                     59

 

Significantly, of general areas of work, accident and injury claims rate very poorly, both in terms of perception of choice and value for money (43%), even though virtually all such work is conducted on a no win, no fee basis, and the client nearly always wins.

My guess is that that reflects the fact that most such work is done without any face to face contact between the lawyer and the client, and that those injured feel pushed, often illegally by claims management companies, to particular solicitors.

This is a classic case of the illusion of choice – seemingly endless competition facts to work, but in fact poor choice, poor service and poor quality.

It is remarkable that in an area where clients do not pay upfront and virtually always get compensation the evidence is:

“Accident and injury claims is the service area users’ rate as having the lowest choice and value for money.”

The survey covers all providers and not just solicitors, but 64% of those surveyed used a solicitor.

77% of those who used a solicitor chose a small local firm with just 8% choosing a large corporate firm and only 7% a national brand with a local office.

Reputation, price, specialism and the convenience of a local office are all considered more important by clients now than when the surveys started in 2012.

Under half of those surveyed were influenced by a quality mark and less than one third buy the ability to track their matter online.

The results of this survey are excellent news for small local firms with a good reputation.

I believe that they are what used to be known as high street firms.

 

Legal Ombudsman – An Ombudsman’s View of Good Costs Service – Second Edition

Maybe I am softening, or maybe the regulators are waking up, but this too is a welcome and very useful report giving specific examples of good, and bad, service, as well as helpful advice.

 

Pre-Engagement

The Ombudsman advises keeping a record of the information displayed on your website and when and how it changes so that you know what the client saw at the time, rather than what is up now.

Much of my costs and funding litigation work arises from solicitors failing to print and keep key documents, such as the retainer and Conditional Fee Agreement.

Paperless offices are the ultimate madness as far as solicitors are concerned. Maybe one in one hundred can keep a fully accurate online record.

Print it – keep it! Must be the message in relation to any costs, retaining and funding matters.

 

Initial Meeting

“The consumer [client] should know where they stand when they walk through the door and not hear of any charge, if there is one, for the first time at the consultation”.

 

Contingencies

The report gives an example of a fixed fee by a firm instructed at the last minute in relation to a tribunal matter.

It was adjourned due to the other side’s failures. The firm charged a fixed fee plus and an extra fee for the extra hearing.

The Ombudsman halved the extra fee.

Had this been made clear in advance, that is that there would be an extra fee for an extra hearing, then there would have been no problem.

 

Estimates and Fixed Fees

“We know an estimate differs from a fixed fee, but not all customers [the clients] understand this distinction. We therefore look for evidence that this has been explained. An estimate being exceeded would not automatically constitute poor service, but we would normally expect to see reasons for this and look for evidence that the customer had been warned beforehand that this would happen. We would expect lawyers to know the estimate is being reached and warn the customers accordingly, as the customer may want to change instructions on how to proceed, in light of this information.”

 

VAT

The price should always include VAT, and if it is net of VAT then the client must be told how much they will have to pay including VAT.

If not, the Ombudsman is likely to order the client to pay only the lower, VAT exclusive, figure.

 

Disbursements

This term should never be used as it “means almost nothing to anyone other than lawyers.”

 

Overall Costs

When the complaint is that the bill is excessive, it is normally a reflection that the client was not expecting the bill to be so high, and thus is really about costs information rather than the costs themselves.

Failure to keep clients up to date with costs information is common and can be avoided by having a monthly review system on every file, with costs information being a mandatory matter to be dealt with.

 

Billing

The Ombudsman states that a common reason for a complaint is poor billing and states, reasonably, that if the Ombudsman has difficulty understanding the basis and meaning of the eventual bill, then that is likely to amount to poor service.

Again, in my experience, very poor, short barely comprehensible bills are very common.

The Ombudsman states:

“If a lawyer produces a bill which says “work done between 24 July and 18 August” and does not provide any further detail, we would consider this vague. We would want to know what the nature of the work was and will ask the lawyer to produce his or her ledgers as evidence that it had been done.”

I am not sure how ledgers would show what work was done, but the general point is clear.

 

Enforcement

“The Ombudsman cannot, and will not, interfere in a lawyer’s decision to enforce a bill while a complaint is ongoing. However, where we consider that any action was unreasonable, it will be reflected in the decision we make and any remedy we order.”

 

The Ombudsman has a range of further guidance on its website:

www.legalombudsman.org.uk/publications which might be useful to refer to:

Guide to Good Complaint Handling, provides an overview of how to respond to complaints.

– Signposting pack, sets out the signposting requirements and provides suggested text for you to use.

Approach to determining complaints, looks at the factors we take into account when we investigate and the questions we ask to determine if the service has been reasonable.

Our approach to putting things right, if we decide the service was unreasonable this guidance looks at the things we can do to resolve the situation.

Scheme Rules FAQ, common questions about our scheme rules.

 

If you would like to keep in touch with new guidance, research and courses that we run subscribe to our quarterly newsletter, LeO News.

Written by kerryunderwood

August 29, 2019 at 1:00 pm

Posted in Uncategorized

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