Reflection on the Residential Conveyancing Market in England and Wales
As any residential conveyancing lawyer will tell you, the past couple of years have been full on. The residential conveyancing market in England and Wales has experienced significant fluctuations over the recent past , with notable peaks and troughs that have reshaped the industry landscape. A key factor in this dynamic has been the stamp duty holiday which led to a surge in demand for conveyancing services, creating unprecedented volumes of work for legal professionals. However, the latter half of 2023 has witnessed a downturn in residential conveyancing transactions with some firms talking about lay-offs. However, the job only seems to get harder and more complicated with Building Safety and Leasehold reform being only two current examples. The result, so it seems, is that conveyancer’s heads are down, and many have left, or are contemplating leaving the profession altogether.
I openly admit, I was not a conveyancing lawyer when I was practising. I, for my sins, was a litigation lawyer and litigation is far less stressful than conveyancing. So, when it comes to understanding the conveyancing process, I have the skill level slightly above that of a typical client. However, as a former equity partner and law firm CEO, one aspect of the conveyancing market that I do have an interest in is pricing, and looking at the pricing strategies law firms adopt. You may not be surprised to learn there is a huge disparity.
What I call “conveyancing add-ons” are common place when it comes to pricing. These add-ons come into play, theoretically, when additional work is identified partway through a transaction, leading to additional fees. I say theoretically, as not all firms charge for add-ons, even if they reserve the right to do so. Other firms have a business model which appears to be bill as many add-ons as you can, as that is where the real profit margin is located.
What I have seen in many cases over the past 24 months is, I am sorry to say, a lack of confidence when it comes to pricing and a lack of consistency of price management even within the same teams . I have conducted numerous surveys of law firms (answers are always anonymous) and have asked lawyers to price matters with the same facts. In some cases, fixed price quotations have varied by as much as 200%.
This lack of consistency and pricing confidence poses a challenge for clients seeking clarity and fairness when it comes to pricing. It’s also hugely confusing for lawyers who can see their colleagues charging different sums.
One of my favourite pricing quotes is from Mark Ritson, a former Professor at the London Business School who said,
“Pricing is the worst managed of all marketing areas.
How prices are decided is often a mixture of voodoo and bingo.”
The trouble for the legal profession is, we were not taught voodoo at Law School, and I suspect the Law Society has not got a bingo society!
Research conducted by my business, Big Yellow Penguin, sheds perhaps a little light on the current state of the market. I have identified over 120 different types of conveyancing add-on charges. That is, for the avoidance of doubt, one hundred and twenty! It’s too many!
There is not one firm that I have come across that lists all 120 plus as add-ons, but it would be fair to say many firms adopt a ‘pic n mix’ mentality. The list below shows the extent of the problem, not to facilitate conveyancers adding to their existing lists!
If I were a customer of a law firm, I would rather have a conversation at the outset of a transaction and understand what I am likely to be billed for having the work undertaken rather than waiting for an unwelcome surprise at the end.
I think it’s important for conveyancing firms in 2024 to consider how they can enhance pricing transparency, streamline service options, and maximize both profitability and client satisfaction. The evolving landscape demands a strategic approach to pricing that not only reflects the current market conditions, but also ensures that firms are adequately compensated for the work undertaken.
As we enter the new year, maybe a New Year’s resolution for conveyancers and/or management teams, should be that all legal teams (not just conveyancing) should undertake a thorough analysis of their pricing models which includes creating service options which give clients choice (think Gold, Silver and Bronze). Look at internal pricing training, and how lawyers engage with customers at the outset. By doing so, I think legal teams can position themselves to navigate the complexities of the market and provide clients with transparent and competitive pricing while optimizing their own profitability.
Shaun Jardine, Director, Big Yellow Penguin is the author of Ditch The Billable Hour! Implementing Value-Based Pricing in a Law Firm, which is due to be published on 22nd January 2024
Add Ons 2023
- Legal fees
- File set up fee (non-refundable)
- File opening charge
- Additional AML Check for Limited Companies
- Electronic Identification Verification
- Review of electronic verification
- Office copies
- Searches
- Additional searches
- Environmental issues (including Japanese knotweed)
- Bank transfer fee
- Transfer of Funds – Cheque
- Transfer of Funds – Same Day
- Electronic transfer of money outside the UK
- Bankruptcy entry
- Companies House Registrations
- Buy to Let Mortgage
- Concessionary purchase
- Corresponding with third-party Lawyers (Lender)
- Lawyer Checker
- Corresponding with third party lawyers (non-Lender) or complying with Court Order
- Providing an undertaking required by buyer’s lender’s independent solicitors (if any)
- Providing an Undertaking to a lender, management company, solicitors
- Deed of Covenant
- Deed of Easement
- Preparing and negotiating a Deed of Easement
- Deed of Gift
- Gift of a deposit
- Deed of Postponement
- Deed of Trust
- Deed of Variation
- Early file closure
- Exclusivity or Lock-out Agreement
- Expedited exchange/completion process
- Completing simultaneously with exchange of contracts
- Buyer to pay sellers expedited completion fee.
- General Power of Attorney
- Grant of a new Lease
- Help to Buy ISA / Lifetime ISA
- Help to Buy (Newbuild)
- High Rise Property Purchase
- High Rise Property Sale
- Non-compliance with planning, listed building and building regulations
- Obtaining a Building Regulations Regularisation Certificate
- Houses in Multiple Occupation (HMO)
- Indemnity Insurance policy review
- Independent Legal Advice (Mortgage Application)
- Insurance indemnity policies
- Key Access undertaking
- Lease Extension
- Leasehold Fee
- Leaseholder’s Certificate of Compliance
- Licence to Occupy
- License to Assign
- Management Pack (Additional) – ordering and expediting
- Management enquiries on a freehold property
- Managing Agent / Lease (additional)
- Merger of titles
- Mortgage (Private)
- Mortgage – panel member fee
- Mortgage Fee
- Mortgage Redemption Fee – sale
- Redemption of Additional Secured Legal Charges
- Mortgage Redemption Fee – sale (First Home Scheme)
- Multiple Titles
- New Build
- Properties less than 10 years old
- Occupiers consent form
- Overseas (non-UK resident) client
- Printing and Posting Welcome Pack
- Receipt of requested funds in multiple transfers
- Removal of a registered Caution
- Restriction on title
- Retentions
- Right to Buy
- Share of Freehold
- Shared Ownership
- Source of Funds – gifts
- Special conditions on mortgage offer
- Statutory Declaration
- Title rectification
- Unregistered Title (as part of a sale or purchase)
- Unregistered title (standalone)
- Voluntary First Registration of a sale property
- Dealing with a listed property
- Deed of Guarantee
- Drafting/Approving Assured Tenancy Agreement
- Mutual Deed of Covenant for Flying Freehold
- Transfer of Business Loan Facility/Overdraft
- Transfer of Legal Aid Charge or other current loan
- Drafting additional contract packages in a Contract Race
- Deed of Assignment of Life Policy
- Service of Notices of Assignment to Life Company
- Cheque returned unpaid
- Cheque stopped at client’s request
- File retrieval after Completion from Archive storage
- Data Protection Act 1998 – access to personal records
- Purchase of Freehold reversion for a leasehold property
- Change of Name Deed
- Approval Non-Lender Buildings Insurance
- LMS Panel Fee
- ULS Panel Fee
- Dealing with separate mortgagee’s Solicitors
- Solar Panel Leases
- Digital archive of client’s file
- Seller’s solicitor’s fees for providing certification.
- Dealing with completion excess service charges or other payments due post completion
- Preparation, service and assignment of a statutory notice for lease extension in a sale contract.
- Drafting and negotiating additional contract provisions Hourly rate
- Advising on your stamp duty land tax liability (if matter not straightforward)
- ATED Return
- Undertaking additional investigations on matters at your request
- Digital Panel Manager Fee
- Completion of stamp duty land tax transaction form
- E lodgement fee.
- Freehold Estate Charge
- Letter to outside agency confirming your sale/purchase, e.g., School
- Membership and Share cert for management company
- Multiple Sale Contracts
- Any party failing to complete
- Completion date postponed
- Overage
- Confirmation of title change fee” on a sale. Firms
- No sale No Fee Protection
- Charge for photocopying in accordance with our Terms and Conditions
