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New rules for conveyancing

New price transparency rules came into effect on 6th December 2018. TM Group asked the industry, “Will the new rules change conveyancing for the better?”

The Negotiator

Calculating house costs image

Many respondents told tmgroup that they were confident that the new rules “make good business sense” and should create competitive advantages for firms that promote the quality of their services alongside their prices. Yet there was a note of caution, that those who focus too heavily on price alone, risk a race to the bottom – and losing out.

THE REGULATORS

Stephen Ward imageStephen Ward, Director of Strategy and External Relations, Council for Licensed Conveyancers (CLC):
Better information is good for clients and, if done well, can help firms too.

Potential clients might rely on word-of-mouth, referrals, or online searches to choose their conveyancer. However a buyer or seller starts their search, our new requirements will help them make an informed choice. We want CLC firms to succeed and we believe that providing clear information to customers makes good business sense. The changes provide CLC Practices with new opportunities to create a competitive advantage as they focus on service and quality and not just price.

While our requirements set out what firms must do, we know that all CLC Practices are different, so we are giving them flexibility to comply with the rules in the way that best suits their business and their clients.

Chris handford imageChris Handford, Director of Regulatory Policy, Solicitors Regulation Authority (SRA):
Being more transparent may give conveyancing providers a real competitive advantage. Buying a house is the biggest and most complex financial transaction most people will make during their lives, but finding the information they need to choose a legal professional to work with can be a hugely frustrating challenge.

In a highly competitive market being more transparent may give conveyancing providers a real competitive advantage in winning new business. At the very least, publishing prices should help debunk public misconceptions that professional legal services are more expensive than they really are. Our research suggests that people think legal costs are as much as 22 per cent higher than is actually the case.

Beth Rudolf imageBeth Rudolf, Director of Delivery, Conveyancing Association (CA):
The new rules will allow consumers to compare ‘apples with apples’, and increase accessibility to conveyancing providers.

In a general sense, we believe it will improve the process for consumers wishing to find out about the costs of conveyancing and it will also increase the accessibility of conveyancing providers, given that consumers have found it frustratingly difficult to ascertain the true costs involved because these have not been accessible from, for example, the firm’s website. Following the introduction of these new rules next month, it will be up to the regulators to take a robust view in enforcing failures to comply and providing full cost transparency, so that consumers are not lulled into £99 ‘deals’ only to find that their final bill is closer to £1,500.

LEGAL PROFESSIONALS

Michelle Garlick imageMichelle Garlick, Partner and head of the Compli team at Weightmans LLP:
Compli advises lawyers on regulation, risk and compliance:

Comparison websites will not help, because a client will only be able to search against firms who pay to be on the site.”

I remain to be convinced. In most cases a meaningful fee quote is the result of a two-way process formulated on the basis of information received from clients regarding the work required, the timescales involved and consideration of the personnel required to complete the work.

The provision of the required information on a firm’s website is unlikely to be meaningful in the absence of this process.

If done properly, it could provide more of an opportunity for firms to showcase their expertise and reputation (not just focus on price). It could also raise clients’ awareness of what is involved in a property transaction and thus help to better manage clients’ expectations, but there is a risk that too much information or a long list of caveats/ exclusions either becomes meaningless or more confusing for consumers.

The danger is that there could be a race to the bottom – which in turn could lead to falling standards and increased complaints. Comparison websites will not help here either because a client will only be able to search against firms who pay to be on the site.

Suman Dally imageSuman Dally, Partner, Shoosmiths LLP:
Price transparency only risks making the industry even more price competitive, driving down fees and consequently service.

Whilst I understand the intention, I do feel the requirement for price transparency has caused confusion and created a further distraction in an industry, which has far more pressing issues around modernisation and digitalisation of the conveyancing process.

Conveyancers generally already provide clients with a comprehensive illustration of fees and anticipated expenses but, as every transaction and clients’ needs are unique and unknown at the point of instruction, additional fees can never be quantified by either client or lawyer at the point of instruction.

Other professions do not seem to have this need for ‘standard’ disclosure of fees if, for example, we compare ourselves to accountants. Price transparency only risks making the industry even more price competitive, driving down fees and consequently service for under-valued and complex work in an ever more demanding consumer market – something which many conveyancers are not yet geared to offer. Low margins have already driven expert people out of residential conveyancing, which has resulted in a skills shortage, inevitably contributing to slower transactions.

Rebecca Swain imageRebecca Swain, Partner and Head of Residential Conveyancing, Thomson Snell & Passmore LLP:
The new rules should help with enquiry conversions from clients. I am fully in favour of providing clients with full costs transparency at the outset of a transaction and we have been doing so for as long as I can remember. The new rules require us to publish pricing details on our website; however there are a host of variables that will affect a transaction, which makes it almost impossible to provide an accurate fixed price without discussing the transaction with our clients first.

Decisions should also not be based on price alone. It is important to establish the level of service to be offered and the qualification and experience of the person(s) handling the transaction.

Both can have a significant impact on the transaction and how it progresses.

The new rules will enable clients to view general details of the charging structure of a firm, which in return should help with enquiry conversions. However, I am still a firm believer in picking up the telephone to discuss a new transaction. Only then can you be guaranteed an accurate initial quote and an indication of service.

INDUSTRY CONSULTANTS AND PARTNERS

Rob Hailstone imageRob Hailstone, CEO, Bold Legal Group (BLG):
The younger generation (your clients one day) is looking for 24/7 access and immediate responses.

The new Pricing and Transparency rules, very few want them and most will think they will drive legal fees down. I go to a lot of conferences and seminars and watch a lot of webinars (part of the job) and I don’t believe that has to be the case. I have even read (and have available) a Counsel’s Opinion on the rules. The question is, do you want to do the bare minimum to comply or use your website and the rules as an opportunity to try to win more, well paid work?

I sometimes question change for changes sake, but when it is inevitable I try to embrace it and, to be honest, use it (as a businessman) to my advantage. My advice is, look at all the possible solutions and then make your decision. However, don’t forget, that the younger generation is looking for 24/7 access and immediate response. Maybe you should provide them with what they want?

Craig Campbell imageCraig Campbell, Product Director – tmconnect, tmgroup: 
Firms will open an online channel that may increase contact and market share. Firms should see price publishing as a real business development opportunity to engage with consumers, help them to understand the value of the firm’s proposition, not purely a compliance issue. Instead of the traditional methods of phone calls or meetings, movers now seek digital channels to find quotes in the evenings and weekends, when they are not at work.

By publishing price information online, firms open up an online channel where they may benefit from increased contact and improved market share.

When clients feel looked after and have a good experience, they are more likely to go back to the firm for other work, from generating a quote all the way through to the completion of the work, being able to improve efficiency in the firm and communicate via multiple channels.

Richard Hinton imageRichard Hinton, Director, Pitsford Consulting Ltd.
The benefits will stand or fall based on the upfront case made by introducers and conveyancers for the value they represent.

I think the new price transparency rules will change conveyancing for the better, and I think in time firms will come to welcome their introduction for three principal reasons:

1. They are being nudged into line with how the market increasingly wants to engage with mainstream private client services. Those that embrace it most fully will see the best results.

Firms that adopt a “what can we get away with?” approach either already serve niche markets, or will simply widen the competitive gap between them and their professional peers who do embrace these changes.

2. The benefits to clients of paying referral fees will stand or fall based on the up-front case made by introducers and conveyancers for the value they represent. I don’t think it’ll be enough to say, “we’re passing on a marketing cost that we incur” if there isn’t a discernible client benefit to go with it.

3. Price transparency is encouraging firms to look for more service and performance data that contextualises price. This has hitherto largely been ignored, but this new catalyst is already bringing forward innovative datasets from bodies such as HMLR and Trustpilot, which is improving the range of comparable data.“

Chris Harris imageChris Harris, Managing Director of Lawyer Checker and the Practical Vision Network:
Managing online reputations and reviews will be a crucial part of a firm’s marketing considerations.”

Although many within the legal sector are reticent about the upcoming changes to price and service transparency, it should make it easier for consumers to make informed decisions on their buying choices.

It will become imperative for conveyancers to consider how they will demonstrate their added value and expertise to the client. Those that fail to consider the services they offer and why their price is justified because of their experience will result in an inevitable race to the bottom by focusing their attention on the competitive price they can offer. Managing online reputations and reviews will be a crucial part of a firm’s marketing considerations.

www.tmgroup.co.uk

February 28, 2019

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