I was going to write about the effects of snow on house moves, but as the snow has now disappeared, I will follow on from last week’s Ten Commandments.
My first commandment to the client was “thou shalt not select your conveyancer on price alone”. Well, if I were to write Ten Commandments to conveyancing firms, my first commandment would be “thou shall not undercut neighbouring firms and slash your fees when the market drops”.
I tweeted this week about a potential client who asked me to send her some figures. She had already instructed a firm but when they sent her the terms and conditions, she noted that the fees were substantially more than in the original quote they had sent to her.
She was disappointed. Via a recommendation from a family member, she had called me. I sent her my fees. They were a little bit more than the firm she had initially instructed.
She then found out which firm her seller was using and , after googling that firm, she told me that she was just going to use an on line cheap firm as there was no point in her wasting her money on a “good, expensive” conveyancer if her seller was not prepared to do the same.
It was obvious from what she told me that the seller was having – yes, having – to use the firm recommended by the agents. I had considerable sympathy for her and appreciated her position. I understood why she made the decision she made, although I know that even if it was going to take ages, there is still something to be said for having a conveyancer who will hold your hand and look after you and reassure you.
I want to emphasise the Commandment I set out above: thou shall not undercut neighbouring firms and slash your fees when the market drops. Clients don’t really understand what they are paying for and what the differences are between a high street firm like mine or a call centre, factory firm. All they see is the price.
I heard this week that a firm local to me with a handful of offices were slashing their prices. Why? Why? Why? Firms have put up their prices over the last few years to cope with the increase in workload. Many conveyancers are leaving the profession and it is hard to recruit experienced conveyancers.
Why, then, reduce your fees? Yes, the market may be dipping, but keep fees high, pay the staff a good wage, and invest – whether that be in training staff, technology, or both.
Why reduce your fees so that you get more work? All you need to do is think about the economics of this. I am a solicitor, not an economist, but to me, the maths is clear. If I charge x and another firm charges half of x, then the other firm needs double the number of transactions to make the same amount of money.
Think about that – for one transaction, the other firm needs two transactions; for five transactions, the other firm needs 10; for 50 transactions, the other firm needs 100 transactions, and so on…
Why do that to staff who have had the busiest two-and-a-half years ever? Those staff won’t want to stay. Invest in a four-day working week if that is what appeals to you; invest in the wellbeing of your staff; invest in technology. But please don’t undercut the rest of us who don’t want to be taking on volume work for little reward.
We were able to put up our fees during the SDLT holiday and the recent boom – let’s all be good to one another and keep those prices high, and show the clients that we are worth it.
This is written by a real high street conveyancer who wishes to remain anonymous. Read more in Today’s Conveyancer every week.
One Response
In principle I agree that now is not the time to cut fees. However this probably ignores some basic principles of economics. ie supply and demand .
How do you think Ryan Air, Easy Jet etc keep their planes full and profitable ? Of course pricing is an important tool in the armoury of any service provider. Offering an excellent sservice is a must but you should not be oblivious to the price sensitivty of consumers. In general people dont see conveyancing as something that may vary in quality of service. They quite rightly expect a solicitor or conveyancer to be able to do the job to at least a minimum standard. So price does becomes a differentiator.
From years and years of mystery shopping I can tell you now the vast majority of firms spend no time at all monitoring the people who give quotes and even less time building any raport with clients asking for a quote.
My advice is for firms to have professional quote software and have a sales team winning new business. Only then can owners and managers determine what is the correct price to offer when the market is so variable.