CEO of The Bold Legal Group urges Solicitors and Conveyancers not to drop their fees!

When I began my conveyancing career back in the mid-70s, conveyancing fees were, taking into account inflation, much higher than they are now. In fact, if memory serves me right, scale fees were still in existence or not long gone.

From the 1980s onwards conveyancing fees dropped dramatically, to levels that makes one wonder how the work can be completed, expediently, professionally and by practitioners with enough qualifications and experience to do the job.

Many might think that, with the advent of the internet, email, more registered land and case management systems, the process has become easier. In my opinion the opposite is true. If a few tasks have become more streamlined, many more steps are now involved and some previously existing steps have become more complicated and cumbersome.

Over the course of the last 12 months or so, thanks to the extremely busy property market, and in an effort to control workflow, most firms have increased their fees. Some by 50% or more. Again, in my opinion, some are now actually being paid a sum commensurate with the requirements of the job.

It isn’t rocket science to work out that if a firm increases their fees, they can reduce the volume of work. That means that conveyancing practitioners will have more time to devote to their work, their clients and their business contacts.

I believe that over the remainder of this year and beyond, a large number of conveyancers will retrain, retire or simply throw in the towel. A recent survey completed by Today’s Conveyancer into the mental health and well-being of its readers revealed that 49% of conveyancers have seen colleagues leave the profession within the last 6 months because their role was negatively impacting their mental health. Conveyancing as a career, is not very high up the list of jobs that youngsters should consider training for. Long hours, modest pay, responsibility, do not make it a particularly attractive career option.

A substantial increase in professional indemnity insurance premiums later this year is certain. As a result of all these issues, not only will there be fewer conveyancers, there will be fewer firms offering residential conveyancing services.

I therefore urge firms and practitioners to hold their nerve when transaction levels adjust. If they don’t, there will be another race to the bottom. Benefitting no one, including estate agents.

Iain McKenzie, CEO of The Guild of Property Professionals says:

“Like estate agents, conveyancers need to be properly rewarded for the work they do. Low fees in any profession or business, usually equates to an inferior service. It would be great to see more conveyancing firms investing in young blood and new technology over the coming months. Love them or loathe them, the last thing we need is dearth of conveyancers and conveyancing firms.”

As Iain implies, if conveyancing firms earn more, they can recruit more, train more and invest in more modern technology. The solution is in their hands, go back to the way it was, scrimping and scraping or strengthen their resolve, hold firm on fees, and have a much brighter future.

 

Rob Hailstone is CEO of Bold Legal Group

4 Comments

  • test

    Well said. I gave up resi. completely about five years ago: a soul destroyingly awful job. Sadly, I suspect fees will drop again as selling agents Dutch-auction legal fees to give out work. Mind you, a lot of work done is so appalling that less than no fee is justified.

  • test

    I stand by something a solicitor (who at the time was part of the management team of one of the country’s largest estate agent networks) said to me years ago – “Know your worth and don’t be afraid to charge for it”. I started my career in conveyancing, only a few years after you Rob, in 1983 and your comments reflect my own experience. Whatever the reason for the drastic decline in fees (and my own view is that solicitors have no-one but themselves to blame, for cheapening their own services to attract volumes!), we are where we are and with so much of the fee taken swallowed up by referral fees (my firm doesn’t pay any) it’s not surprising that services have slipped.

    To add credence to your article, I was challenged – a few years ago – by a conveyancer from another firm as to how they could get a better “work-life balance” as they felt overworked and underpaid. I told her to try doubling her fee (which – given the ridiculously low fees her firm were charging would still be competitive) and her reaction was “…but I’d lose half the work”! It took a few minutes for her to realise what she’d just said…

    And finally – I don’t think this debate should become one of Estate agent -v- conveyancers. Estate agents have been clever enough to maintain their % commission, we conveyancers gave it up! Not their fault.

    • test

      Conveyancing needs to be opened up to anyone or organisation can get insurance

      This is the only way that due regard will be given to the need to provide client friendly services will be provided

      There are reports of 98% of consumers wanting upfront information but lawyers were at the forefront of destroying HIPS

      Those enjoying unfair trade practices do not consider their clients. Reserved matters is 217 years old and cannot be justified on consumer protection grounds. It has allowed, for example, obscenely rising ground rents to make homes unaffordable;

      We need a consumer focussed system

    • test

      You are totally right Rob and you Paul, but it is a complex situation entirely of solicitors own making. Try getting an hourly rate quote from a financial adviser and they will refuse and stick to 1.5% for every year your money is invested. Try asking an estate agent to do it on hourly rates – they will say 1 or 2%. Try getting an insurance broker to quote or discount for their commission. And yet the general public accept that because they stand firm, and none of these services are anything like as stressful, complex, or come with any real comparable liability,

      We can throw blame around – both individual solicitors not valuing their own time, the Law Society for being beyond inept at representing their members and the SRA for basically avoiding the issue.

      But the real question is how is the problem to be solved. Its a human trait to think that there is ‘one key thing’ that will change it but in many situations its a lot of smaller things too.

      Consumers say ‘tech’ can be thrown at but tech is already being used. Simply tech isn’t enough. Heavens the govt blew a staggering £38 billion at tech and consultants for test and trace and it is a disaster. Most firms DO use CMS and very sophisticated tech, the problem is that no amount of ‘tech’ is going to fix anything if the process itself needs to change or you just burn in the original inefficiency.

      Increased fees alone with no commensurate increase in obligations to change the way conveyancers work will simply mean more fees for the same service, as there is no reason to provide a better one. Some well meaning and forward thinking firms would possibly do their job better but unless everyone else does they will be fighting a losing battle.

      Part of the issue is that lawyers and lenders have introduced complexity and areas of enquiry that are nothing to do with the core function clients want us to actually do. Let the clients or their experts or surveyors check – FENSA, building regs, planning, gas certificates, conservatories, septic tanks, receipts for home improvements or building works and all the myriad of frankly nonsense non-legal stuff conveyancing gets bogged down with . Why are we doing this – because Lenders want someone to take the risk and someone to blame. Before the CML handbook there was none of this – it was down to the client. So thats one thing – Lenders remove the obligation to check these things, and clients to accept that we aren’t going to do this and its up to them to sort out. No doubt some quasi-profession will spring up to do this and good luck to them as they are probably going to be better able to deal with it. Let us just deal with the title, the contract, and the financial charges redemption SDLT and registration, Thats all we really need to be involved in, Take the rest away from us so we can get on with the stuff we have actually been trained on for 6 years – the law.

      Next – total ban on referral fees and don’t give me ‘it will go underground’ – if it does then striking off a few firms for breach of this will prevent it. Service Level Agreements obliging firms to use the search companies title insurance and etc that the seller’s panel manager or agent sets is an aberration.

      Next – When you compare what happens in an insolvency or IFA you will find the insolvency practitioners & IFAs follow a set of rules rigidly – it means a lot of work but it is actually done. We need similar obligations that must be followed. You must sit down with the client face to face and go through set things and explanations, you could not say ‘take a view’, there isn’t time, ignore it, just ge the keys, turn a blind eye etc. Clients do no have the faintest idea of the complexity of what goes on because we never tell them, because we haven’t got the time and so anything they don’t understand ‘must be easy’.

      Again comparing with the IFA – they MUST sit down and go through the clients risk appetite, analyse their finances etc. And they do, and they can afford to spend that time because they are paid very well for it. And clients rarely complain about the levels of mortgage brokers commissions, mostly because they aren’t even aware of them !

      Next – clients accept they need to pay appropriately to experts for their services. SDLT is an example – its one of the most confusing and complex taxes out there but very few firms do it right – We have set up SDLT Compass as a portal to do this and I urge everyone to look at our website http://www.sdltcompass.co.uk, Similarly planning, similarly surveyors and so on

      Next lenders adopt Catch-all Unknown Risks Title Insurance policies, paid for by them and likely passed on to the client in their ‘booking fee’ or ‘application fee’ they charge, (which are already often more than the entire conveyancing legal fee), l liked the First Title Home Owners Protection Policy product launched about 10 or so years ago so they can pass risk off to them of all the many things mentioned above rather than claiming off solicitors PI. Thats how it works in US and Canada I believe but I understand lenders in the UK were uninterested as they would rather pass the blame onto solicitors.

      Next – adopt the Scottish system of best and final offers by a closing date, with the seller accepting they give warranties on aspects like infrastructure and so on. It works, none of the chain nonsense and the seller has to literally put their house in order before it goes to market so information has to be prepared and disclosed before offers are made. And none of what happened with HIPS (which were a good idea) where solicitors ended up bearing the cost on a contingent basis – madness from a business point of view

      Surveys – we already have a standard homebuyer style survey by RICS (recently modified). Why can’t one survey be done and used by anyone and any lender who wants to lend on it. This bedevilled the Scottish system as buyers had to pay for surveys when putting an offer together and sometimes numerous surveys were done of the same property – I believe this was changed to one survey being ok – but the lenders need to take the lead on this

      I could go on, and I am sure that there are many flaws in the points I suggest, but its a start – but there are lots of things that need to change if there is to be any real change, but frankly I do not anticipate I will see any real change – there is just so much inertia in the current system.

      I dread what it is gong to be like when I have to sell my own house!

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