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In the Name of Transparency


Nov 06, 2018

The Solicitors Regulation Authority’s (“SRA”) new transparency rules come into force on the 1st of December 2018 and all law firms in England and Wales must ensure compliance to avoid facing disciplinary action.


The rules impose a mandatory requirement on law firms in England and Wales to publish more information on their websites about: prices (specifying what work is included within the price), experience and qualifications of the firm’s employees who will carry out the work, the experience and qualifications of those who supervise the individuals who carry out the work, and the timescale and key stages for the given legal service.


Paul Philip, SRA Chief Executive, portrayed the transparency rules as a win-win situation for both consumers and legal service providers. He said, ‘publishing information on price, services and protections will not only benefit the public, but will also help those who deliver these services win business and connect with their customer.’


It has been documented by YouGov that the deficiency of published information, especially the lack of price information, are the main barriers for small businesses accessing legal services.


Similarly, in Hong Kong, the Department of Justice (“DOJ”) published a consultancy study entitled, ‘Demand for and Supply of Legal and Related Services’.  The report echoed how a significant majority of small to medium enterprises (“SME”) in Hong Kong do not know how much it would cost to use legal services (74%) and found it difficult to obtain information on the specialisation and experience of lawyers (68%).1  However, as regards legal costs, Hong Kong law firms enter into remuneration agreements with their clients, most commonly charged on a ‘time-spent’ basis, and are under no obligation whatsoever to publish details of their hourly rates or estimates of costs to be in incurred for any particular matter on their websites.2


In response to the findings, LegCo responded that they would work closely with the Hong Kong Law Society and Bar Association to explore ways to promote greater transparency of legal fees and expertise claimed by their respective members.3  However, no formal rules have been proposed or implemented to achieve greater transparency in Hong Kong’s legal sector.


While increased transparency would certainly aid to debunk misconceptions over costs, it is yet to be seen how the new rules will impact law firms’ outreach to new clientele and the effects on price competition between legal service providers.


Although Hong Kong law firms remain unaffected by the implementation of the new transparency rules, if law firms in England and Wales report a positive impact, Hong Kong law firms may be incentivised follow suit.

 

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1Department of Justice, Consultancy Study on the Demand for and Supply of Legal and Related Services, Para 6.
2Legal Practitioners Ordinance (Cap. 159) Section 58.
3LegCo Panel on Administration of Justice and Legal Services (LC Paper No. CB(2)1904/08-09(05)).

 

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