Fixed fees and clarity in tomorrow’s legal services is a guest post by Tom Hiskey, former probate solicitor and co founder of fast-growing legal technology company The Law Wizard. The Law Wizard supplies the clever technology behind Clutton Cox's fixed price probate service.
I often run guest posts over on my Clutton Cox website ( extraordinarily it would appear whenever I am on holiday) and I am grateful to Tom for contributing this post.
Tom has a couple of predictions about the future of legal services –over to you Tom.
Prediction 1: in the next few years, all but the most complex non-contentious matters will be charged by fixed fee
No solicitor costs files by weight any more (or do they?). The way in which matters are charged is changing fast. In probate the move towards fixed fees is inexorable. It must be this way, if for no other reason that consumers prefer fixed fees above all other charging methods by some distance.
According to one recent survey, fixed fee is now the most common charging method for probate.
It should come as no surprise then that the vast majority of law firms we have spoken to already offer one fixed fee probate package, and sometimes more than one. Typically, this is a fixed fee grant extraction service, usually around £350 – £700 + VAT, with £500 + VAT perhaps most common.
At least one firm we know of is already moving towards offering all non-contentious probate work on a fixed fee.
These law firms tell us that the demand for fixed fees started around 10 years ago and, today, requests for fixed fees are commonplace. This is reflected in client satisfaction rates, with 87% of consumers satisfied with fixed fee services, compared to 73% for services charged by hourly rate (down from 79% in 2012).
This 10-year shift mirrors the rise in internet users. 6 years ago (let alone 10), there were just half the internet users in the UK there are today. In 2013, 33 million of us use the internet daily. The Web has empowered consumers, who are now, as a whole, informed, educated and expect more for less.
There are growing pains. With the above fixed fee grant extraction services, the law firm typically hands some form of questionnaire to the client, or the client simply hands a completed spreadsheet or IHT205 to the solicitor. It can be a clunky, inefficient process.
The challenge of attaching fixed fees to estate administration (as opposed to grant extraction) should not be underestimated, and the same goes for many other areas of law. It requires experience, technology, processes and analysis of metrics – things that are not yet in place for the vast majority of law firms.
Progress is also hindered by misunderstandings about fixed fees: one firm we spoke to considered a fixed percentage rate to be a fixed fee.
Prediction 2: prices and service levels will be clear, transparent and capable of comparison
Law firms may be some years away from a fixed fee panacea, but try telling that to probate providers such as Co-op Legal Services, Kings Court Trust, ITC and others. They are pushing hard towards fixed fees. These specialist probate providers also tend the lead the way (some more successfully than others) on the other side of the fixed fee coin: pricing, service levels and branding which are clear, transparent and capable of comparison.
For law firms, as with these volume providers, it is a bumpy road. One firm left me scratching my head recently when they declined to tell me what they charge for their fixed fee grant extraction service, explaining that they do not tell clients their fixed fee prices over the telephone or online. These are only revealed once a client has made an appointment and is at the office. Even Co-op is notoriously coy about its fixed fee pricing structure, with no hint of costs on its website.
This may or may not be adequate for the time being, but the market is changing. Co-op intercept clients at the funeral stage, referring probate work to their legal services team. Volume provider Kings Court Trust recently received £4m VC investment. They are not alone in targeting a greater share of the probate market.
The rise of volume providers is of greater concern for law firms than mere fixed fees, and that is true not only for probate. Nevertheless, the reality is that if law firms wish to compete, they will have to do more.
Quality Solicitors hope to do just that. Though unable at present to guarantee fixed fees, their promises, including no hidden costs and Saturday openings, point towards transparent service levels. With increasingly clear and consistent messaging and branding, plus TV ads, they recognise that consumers are increasingly shopping around (even if they still do so for legal services somewhat less than they would for other services).
This trend will continue, supported by the fact that 18-34 year-olds are now more likely to find their legal service provider online than by any other means. In terms of probate, this may not be the demographic of the typical client, but it is indicative of a permanent shift. Tomorrow’s consumers of probate services will increasingly find their providers online, comparing costs and service levels as they would for car insurance and credit cards.
Unclear pricing is at odds with this future. It is even at odds with the present. All our clients publish their fixed fee probate prices on their websites. Many other law firms publish one or more fixed fee prices.
The research, stats and results all point to one thing – consumers increasingly demand clear, fixed, up-front pricing, along with consistent, clear branding and service levels. However fantastic your law firm’s service and expertise, this will be of little comfort when the internet generation skips over your website in favour of something clearer, more transparent and more appealing.
For details of how The Law Wizard helps law firms to capture more of the DIY probate market, please visit our website, www.thelawwizard.com