Law society hits back at claims legal costs are uncompetitive

THE LAW Society of Ireland has hit back at claims that legal costs in Ireland remain uncompetitive.

Ken Murphy, director general of the society, said a recent report by the National Competitiveness Council drew “flawed and unreliable conclusions” about Irish legal costs.

The council's report, entitled Costs of Doing Business in Ireland 2011, cited Central Statistics Office (CSO) data which indicates that legal services prices have risen 12 per cent since 2006.

Mr Murphy said the CSO data in question was based on responses from a “paltry and statistically insignificant” 18 legal firms out of a total of 2,220 solicitors’ practices in the State. Such a small sample size was a “completely inadequate basis for conclusions”, he said.

The competitive council’s report included a caveat on the CSO data – which was the result of an experimental services producer price index survey – noting that caution should be used when analysing the results relating to legal costs because of the small sample size.

The report also referred to World Bank data which indicates that Irish legal costs compare poorly to those in other countries.

However, Mr Murphy said comparing legal costs across jurisdictions was like “comparing apples with oranges” because of the difference in national legal systems.

A spokeswoman for the competitiveness council said the body stood over its report. “It has used the very best statistics available out there,” she said.

“The CSO and World Bank are both internationally recognised organisations.”

The CSO had no policy bias and had chosen to publish the data despite the small sample size, she said, adding that the competitiveness council would welcome greater participation in this type of survey.

Mr Murphy said ever-increasing numbers of solicitors were chasing a dramatically reduced volume of work. “All clients nowadays are extremely cost-conscious,” he said.

“This is a market where people cannot overcharge. Legal fees have been falling very substantially in response to tendering and intense downward pressure from clients.”