A few days ago at a conference, I was asked if price transparency would create a race to the bottom. The short answer for me is no it will not but let me explain why I believe that to be the case.
For those who may not be aware, new regulation forces law firms to publish their prices – or at least examples of their pricing. It does not need to be completely accurate and it will never force law firms to be bound by their initial quote. In fact, when you really get under the skin of price transparency, it’s not necessarily only related to the initial quote but instead how clients are given a transparent view throughout any transaction.
At the weekend, I was wandering through our local shopping centre thinking about price transparency and I suddenly came across Sports Direct. If you haven’t heard of Sports Direct, they are predominantly a discounted sports retailer. They constantly have a sale, but they sell branded sports goods such as football boots and other such wears. Interestingly, directly opposite them was JD Sports who are a key competitor. They position themselves as a premium brand in the market, but the reality is they sell exactly the same as Sports Direct – similar kits, similar football boots. They both survive in a competitive market but by positioning themselves at opposite ends of the spectrum. The resolute attitude of JD Sports has enabled them to survive without having to discount their goods in order to compete.
Similarly, I think of how Aldi have entered the world of supermarkets, providing discounted groceries to the shopper. Whilst the new entrant has impacted the supermarket, leading to the introduction by Tesco of Jacks, people will still shop at the likes of Sainsbury’s, Asda and Waitrose.
There are a number of reasons that this ‘race to the bottom’ hasn’t occurred in these fields. Firstly, these businesses are astute enough to understand that smart marketing and shopping experience is important to different types of shoppers. Not everyone is going to shop at JD Sports but similarly, others will not shop at Sports Direct. Secondly, research and evidence show that people will pay a premium for an experience.
That experience is hugely important and is one that law firms must start to embrace. Price Transparency is being viewed at the point of publishing prices but actually, what law firms must consider is how the experience of using a law firm can be improved using transparency throughout the transaction. Publishing prices is only a small step and the smart firms will focus on executing a strategy that embraces the clients needs from the moment they request a quote to the point of follow up call, all the way through to after care.
The research and insight that Perfect Portal are accessing to show that pricing transparency will actually help grow your firms’ business and enable you to keep your current pricing and even increase the cost of conveyancing.