Price index “will bring transparency” to legal fees
A new private online platform has been created to answer the growing number of calls for greater charging transparency for legal services.
The new price index, published by Lexoo, contains a database of around 15,000 quotes broken down into detailed categories of commercial work.
The large number of quotes has been obtained with the help of clients and is aimed at providing legal service users with an idea of average fees at current market rates.
The team behind Lexoo believe the large size of the data set, from which the index is drawn, will help counter objections that complex legal matters are impossible to price before the event.
Publishing the price index, Lexoo, which services a panel of more than 220 lawyers, said that making public ranges of prices commonly paid for commercial law services would give small businesses a “steer” as to what they should be paying.
The new system comes shortly after the Competition and Markets Authority’s interim report into the legal market highlighted the lack of transparency over legal services pricing.
The report said the lack of price transparency was the main reason why competition in legal services for individual and small business consumers was not working as well as it could do.
In an interview with Legal Futures Lexoo’s Chief Executive, Dutch lawyer Daniel van Binsbergen, said: “I think there are very few companies in the market that have access to the data… it is not possible for consumers to create their own price indexes because the large majority of the lawyers do not publish their prices.”
He added the index would “give a bit of a steer up front, and while every matter could be slightly different it shouldn’t be outrageously different.
“What we see quite often is that for the same, say, shareholders agreement with the same variables, when we obtain four quotes [from] lawyers of equal standing… [they will] quote very different amounts for the same work.”
The price index will become more accurate as Lexoo accumulates data, added Mr van Binsbergen.
The creation of this service ties in with the Legal Service Consumer Panels own calls for easier price comparison of services and greater transparency, which it has asked legal regulators to consider.
Setting the correct price for the service you provide is never easy and with a lack of transparency from other firms it is difficult to tell whether your services are competitive.
At Moore Thompson, we can help your firm assess its pricing policy and make sure it is sufficient to meet your practice’s needs, whilst remaining competitive.