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Holbrook and Co - Specialists in helping people buy, sell and mortgage property

Is there a change in the air when it comes to agents recommending lawyers?

For many years, online companies with names suggesting Fast conveyancing services have offered estate agents a solution for the perceived problem of slow, outdated, local solicitors.
These online companies offer referral fees for agents, with a simple sales message. “Fed up with local solicitors working too slowly for you? If you use our specially selected panel lawyers, then we will make sure that you get anywhere up to £### per case.” Clearly an irresistible offering.
It’s no wonder so many agents have bought into this argument. The service they might receive from a call centre in Walsall, or some remote high street firm, probably won’t be any worse than that offered by the chap who used to be across the road, who couldn`t be found after the lunch time “nip out to the pub”.
The only problem is that, it isn`t that simple anymore. The guy across the road who used to spend more time in the pub has probably gone out of business. The recession created a “survival of the fittest” situation. Only specialist Conveyancers who invested in expertise and technology survived the recession to offer today the service demanded from 21st century clients The online firm takes 4 months to complete a transaction, but does the agent care cares if they are earning an additional commission fee out of it?
They should care, as they are getting their main sale commission fee 2 months later than they should. And how often does the referrer receive the back lash of poor service when an incompetent solicitor has been referred? The other problem is that if negotiators are being told to recommend lawyers who they KNOW do not offer the level of service that they promise clients, they are personally falling foul of the Bribery Act 2010. The most severe penalty is an unlimited fine and 10 years of imprisonment.
What are the problems with these “Panel” referred firms? There is an assumption that it is only ‘huge conveyancing factories employing robots’ doing the work through these panel companies, but, often it is smaller firms desperate for the business who employ unqualified, inexperienced staff too, but who haven`t invested in technology and processes to enable them to cope with high volumes on transactions. The result is overworked lawyers that struggle to deliver the service levels that are promised.
Then there is the basic problem of referral fees. The fee the client pays has the agents fee deducted, the panel managers cut for “administration” taken and in some arrangements, the lawyer receives only £200 of a £700 fee. This require the lawyers to carry an increased caseload and high caseloads have a direct impact on service levels.
However, there is good news on the horizon for the better conveyancers. The threat of referral fees being outlawed in their entirety and the competitive pressures of the online-only agents bringing each transaction into sharp relief seems to be focusing attention to what really matters – Completions.
Many agents are changing their focus towards better completion rates and good working relationships. They are recommending firms who they KNOW will give a good service, operate with sensible work flows and ensure client satisfaction and goodwill. We hope agents will do the maths, weighing up the income from referral fees against the increased rate of transaction success.

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Warrington, Cheshire
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