Carry on conveyancing
13 February 1996
The ability of John Edge to find about 12,500 signatures to support his Conveyancing Fee Initiative, when the Law Society's paper Adapting To The Future received only a poor response, has surprised many in the profession.
But there should be no surprise at the difference between these results; Edge's letter took five minutes to read, was easy to reply to and, if its proposals were successful, virtually promised greater financial reward for all. At first glance, there was nothing to lose by supporting him. In contrast the Law Society's paper took hours to read, longer to reply to and could not promise anything.
Despite heavy coverage in most legal publications, not enough conveyancing solicitors have given serious thought or effort to the fee debate.
A solicitor I spoke to recently completes about 40 conveyancing transactions per month, a high percentage of which are new introductions, and grosses between £7,000 and £8,000 per month. She works long weekdays, part of every weekend and admits she still cannot spend as much time on each file as she would like.
But neither she nor her firm are supporting the initiative to force up conveyancing fees. She feels that if she had to charge the same as other local firms she would lose her marketing edge and her work level and fee income would suffer.
I do not agree with her for two reasons: first she is a very competent and approachable solicitor and would continue to win work at a high rate; second any loss in new work should be covered by the increase in charges. However, she is already looking at alternative insurance arrangements in case the Solicitors Indemnity Fund proposal succeeds and would resist having to comply with any forced fee increase.
There must be many more solicitors who share her views. And if enough solicitors fight compulsory changes the effect of any alterations would be severely reduced.
There have been some strange comments made about estate agents by those involved in the conveyancing fee debate over the past 12 months. Many of those comments are either incorrect or irrelevant.
In my 20 years as a residential property conveyancer only two estate agents I know of have asked for money in return for recommendations. I told the one agent who approached me I had never had to buy my work before and I was not going to start now. I lost that work to a solicitor who was prepared to pay for it. But instead of being defeatist I made new and ultimately better contacts.
Many solicitors seem obsessed with the amount estate agents charge. Why? Estate agents, like solicitors, have high overheads, albeit different ones, and rarely charge for abortive work. Even charging at the levels they do, few are making a profit in the current market.
Despite Sayer's comments, you do not have to be "buddies" with estate agents for them to recommend you. You do have to be polite, you do have to return their calls and reply promptly to their letters, but they would not recommend any solicitor who does not provide a good all-round client service.
It is ridiculous to suggest that estate agents are able to dictate the level of fees solicitors can charge. Only solicitors have the power to do that.
It is clear to those who have the courage to admit it that there is no magic solution to ensure every conveyancing firm will survive - supply outweighs demand. Unless all conveyancing solicitors voluntarily agree to the same solution any forced one will fail to some degree.
Firms who want to survive should look inward. They should consult both the public and those with the power to refer work in order to supply the service demanded. They should be proactive not reactive and charge a price that is fair to the client and the solicitor. There is room in the conveyancing marketplace for both the up-market and the budget service. But only the best of both.
In January last year, Richard Hegarty, the chair of the property and commercial services committee, said the Law Society Council had made a number of decisions at its meeting in December 1994. Inter alia, it was to learn lessons from Northern Ireland where a conveyancing quality mark was already in place, and carry out a study of successful conveyancing firms and publish the results to the profession. We need to know these results.
It is time lending institutions paid for the services they receive from solicitors. That, coupled with a modest fee increase, would be enough to stop the rot.
The other issue which should be addressed by the Law Society and all conveyancing firms is client loyalty, and how to ensure clients return. Help should be given to firms in these matters. After all, it makes more economic sense to retain clients than to keep finding new ones.
Telling firms what they must charge is the wrong way to proceed. If someone wants to work seven 12-hour days a week and has low overheads, they should be allowed to charge less per transaction if they wish. More important is the amount of time spent on each transaction and this should be monitored.
New avenues need to be explored. A fee increase would stop some firms taking on too much work. It would only generate higher profits for firms which are already busy, not ensure work is done properly.
The debate rumbles on but does not really get anywhere. And a firm of solicitors in Bath is now trying to form a steering group for practitioners who want to take a stand against forced conveyancing fee increases. Instead of the profession uniting on this issue it appears to be dividing. That can only result in failure and a certain amount of self destruction.