Stable solicitor/client relationships essential

Regulated scales of fees rather than legal firms undercutting each other would benefit them and us, says Michael Sheridan

It is a long-standing and fundamental principle of legal practice that a solicitor should know his or her client. This wisdom predates the modern money laundering regulatory requirements which potentially criminalise a solicitor who fails to make certain enquiries about the standing and activities of a client before undertaking instructions.

It was always reckoned to be in the interests of both solicitor and client – and in the wider interests of justice – that the solicitor makes himself or herself aware of the full circumstances of the client before advising, for example, as to the terms of a will or the need for a power of attorney. The interests of justice are relevant here in particular because of other family members who might be adversely affected by misinformed advice. In a wider context, there is a recognised public interest in the minimisation of dispute and litigation by means of proper advice.

This principle is challenged by the modern requirement that solicitors compete with each other on the issue of fees charged for their services rather than upon the quality of those services. Clients will understandably flit from one firm to another in pursuit of cheaper quotations.

Solicitors then face the dilemma of either quoting a fee which allows for the work to be carried out properly and thoroughly or a fee more likely to attract or retain business. Another solicitor might choose to quote a lower fee and take chances on some aspects of the work or possibly rely upon an insurance policy to meet the costs of the adverse consequences of possibly legitimate short cuts. That solicitor’s clients will probably benefit from the lower cost but will have a greater chance of meeting with misfortune.

This competition over fees was previously avoided by the use of scale fees, confirmed by official authority, so solicitors competed with each other on reputation and quality of service rather than cost. There is no doubt many clients would prefer the cheaper costs brought about by competition and to take their chance on difficulties not arising. Most of us are quite likely to value real money above the avoidance of some abstract hazard which will probably not come to pass and perhaps need to be educated by neutral rather than financially interested expertise. At the same time, there is a greater public interest, for example, in the timeous formation of contracts and transfer work being carried out properly so dispute and litigation is avoided and the accuracy and reliability of the public registers is maintained.

There are public scales of fees for many different services such as the provision of birth, marriage and death certificates, the registration of Powers of Attorney and the use of court services. There are public scales of fees also for the private provision of important services such as NHS dental care, provision of MOT certificates for motor vehicles, and provision of legal services under the Legal Aid scheme. Overcharging is prevented by the official, expert setting of these fees. The public interest is protected also by the fee levels which allow these important services to be carried out to a proper standard.

There is a further significant public and private benefit available from stable solicitor/ client relationships. The rising tide of identity theft and fraud as well as the personal inconvenience of submitting to the ever more demanding identification procedures required for anti-money laundering purposes would both be alleviated by such a relationship.

Today’s legislators are obsessed with placing competition in every nook and cranny of business life. It is clear, however, that financial competition is not appropriate in certain areas where essential services need to be provided at certain minimum standards. It would therefore be in the public interest as well as in the interests of legal professional standards and of the individual clients of legal firms for the costs of certain reserved areas of legal services to be controlled by properly regulated scales of fees. Our Society investigates this controversial proposition in more detail at http://www.scottishlawagents.org/ Michael Sheridan is secretary of the Scottish Law Agents Society