A Penguin’s Eye View on Pricing 2023

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

1. Legal fees
2. File set up fee (non-refundable)
3. File opening charge
4. Additional AML Check for Limited Companies
5. Electronic Identification Verification
6. Review of electronic verification
7. Office copies
8. Searches
9. Additional searches
10. Environmental issues (including Japanese knotweed)
11. Bank transfer fee
12. Transfer of Funds – Cheque
13. Transfer of Funds – Same Day
14. Electronic transfer of money outside the UK
15. Bankruptcy entry
16. Companies House Registrations
17. Buy to Let Mortgage
18. Concessionary purchase
19. Corresponding with third-party Lawyers (Lender)
20. Lawyer Checker
21. Corresponding with third party lawyers (non-Lender) or complying with Court Order
22. Providing an undertaking required by buyer’s lender’s independent solicitors (if any)
23. Providing an Undertaking to a lender, management company, solicitors
24. Deed of Covenant
25. Deed of Easement
26. Preparing and negotiating a Deed of Easement
27. Deed of Gift
28. Gift of a deposit
29. Deed of Postponement
30. Deed of Trust
31. Deed of Variation
32. Early file closure
33. Exclusivity or Lock-out Agreement
34. Expedited exchange/completion process
35. Completing simultaneously with exchange of contracts
36. Buyer to pay sellers expedited completion fee.
37. General Power of Attorney
38. Grant of a new Lease
39. Help to Buy ISA / Lifetime ISA
40. Help to Buy (Newbuild)
41. High Rise Property Purchase
42. High Rise Property Sale
43. Non-compliance with planning, listed building and building regulations
44. Obtaining a Building Regulations Regularisation Certificate
45. Houses in Multiple Occupation (HMO)
46. Indemnity Insurance policy review
47. Independent Legal Advice (Mortgage Application)
48. Insurance indemnity policies
49. Key Access undertaking
50. Lease Extension
51. Leasehold Fee
52. Leaseholder’s Certificate of Compliance
53. Licence to Occupy
54. License to Assign
55. Management Pack (Additional) – ordering and expediting
56. Management enquiries on a freehold property
57. Managing Agent / Lease (additional)
58. Merger of titles
59. Mortgage (Private)
60. Mortgage – panel member fee
61. Mortgage Fee
62. Mortgage Redemption Fee – sale
63. Redemption of Additional Secured Legal Charges
64. Mortgage Redemption Fee – sale (First Home Scheme)
65. Multiple Titles
66. New Build
67. Properties less than 10 years old
68. Occupiers consent form
69. Overseas (non-UK resident) client
70. Printing and Posting Welcome Pack
71. Receipt of requested funds in multiple transfers
72. Removal of a registered Caution
73. Restriction on title
74. Retentions
75. Right to Buy
76. Share of Freehold
77. Shared Ownership
78. Source of Funds – gifts
79. Special conditions on mortgage offer
80. Statutory Declaration
81. Title rectification
82. Unregistered Title (as part of a sale or purchase)
83. Unregistered title (standalone)
84. Voluntary First Registration of a sale property
85. Dealing with a listed property
86. Deed of Guarantee
87. Drafting/Approving Assured Tenancy Agreement
88. Mutual Deed of Covenant for Flying Freehold
89. Transfer of Business Loan Facility/Overdraft
90. Transfer of Legal Aid Charge or other current loan
91. Drafting additional contract packages in a Contract Race
92. Deed of Assignment of Life Policy
93. Service of Notices of Assignment to Life Company
94. Cheque returned unpaid
95. Cheque stopped at client’s request
96. File retrieval after Completion from Archive storage
97. Data Protection Act 1998 – access to personal records
98. Purchase of Freehold reversion for a leasehold property
99. Change of Name Deed
100. Approval Non-Lender Buildings Insurance
101. LMS Panel Fee
102. ULS Panel Fee
103. Dealing with separate mortgagee’s Solicitors
104. Solar Panel Leases
105. Digital archive of client’s file
106. Seller’s solicitor’s fees for providing certification.
107. Dealing with completion excess service charges or other payments due post completion
108. Preparation, service and assignment of a statutory notice for lease extension in a sale contract.
109. Drafting and negotiating additional contract provisions Hourly rate
110. Advising on your stamp duty land tax liability (if matter not straightforward)
111. ATED Return
112. Undertaking additional investigations on matters at your request
113. Digital Panel Manager Fee
114. Completion of stamp duty land tax transaction form
115. E lodgement fee.
116. Freehold Estate Charge
117. Letter to outside agency confirming your sale/purchase, e.g., School
118. Membership and Share cert for management company
119. Multiple Sale Contracts
120. Any party failing to complete
121. Completion date postponed
122. Overage
123. Confirmation of title change fee” on a sale. Firms
124. No sale No Fee Protection
125. Charge for photocopying in accordance with our Terms and Conditions