Last year, the Legal Services Consumer Panel reported that the proportion of legal services billed in fixed deals had risen from 38% to 42% over the previous twelve months. This year, the trend is set to grow so what does this mean for high street solicitors?
First, some positive news. Some 87% of consumers paying a fixed fee were satisfied with the service they received compared to 73% of those paying an hourly rate. Fixed fees aid transparency and consumers are actively seeking them out for will-writing, power of attorney, conveyancing and probate.
This will add pressure for legal firms to control costs but there are practical steps that we have found clients have taken to manage and improve profits.
Finally, it isn’t only smaller practices that have concerns. A survey of finance directors at top-100 law firms found that 48% reported ‘the rising number of requests for fixed-fee work as a high risk to profitability’.
By managing expectations and improving efficiencies behind the scenes, fixed fees may encourage consumers to use legal services. For example, as almost a third of over-55s are thought not to have a will, perhaps a simple outline of why they should and a clear idea of what it will cost will see that change.