A Marriage Of Inconvenience – Estate Agents & Property Lawyers
You can’t live with them and you can’t live without them – property lawyers. Clients instruct estate agents to ‘sell’ their property and yet the closest that any estate agent is able to get to fulfilling their client’s need is to ‘offer accepted’. You will never see an estate agent advertising ‘We can get an offer on your property for X% commission (or £2.50 as we’ve seen more recently) but it’s true, because the sale is only made at the end of the conveyancing process.
So what do you do? Do you actively encourage your clients to instruct your preferred lawyer in the hope they will continue to look after your client and deliver the same level of attention and customer service that you have up to the point of the offer being accepted? Or do you do nothing and just hope that the client will end up instructing a lawyer that shares the same enthusiasm and commitment as you both to get the deal done?
For me, doing nothing and hoping for the best should never be an option. Notwithstanding the fact that your commission (and therefore livelihood) is dependent upon these sales actually completing, the performance of your client’s lawyer will directly influence their overall selling experience and could therefore inadvertently affect your brand / client retention / goodwill etc.
Imagine if you took on a property and sold it for the full asking price within one week, good agency right? But then imagine if that same client went on to instruct a poor lawyer (you know the type) and for the next four months the client was fraught with stress and frustration. Sure, at the time you may well be able to separate your customer service from that of the lawyer but nevertheless your client’s overall selling experience will have turned from a positive one to a negative one and overtime this will become their enduring memory.
That said, recommending a lawyer who then goes on to deliver a poor service will have an equally damaging impact upon your business, if not worse. So what are your options?
Local Solicitors
Generally, these are the guys that are still delivering the best service and are the ones with the experience to be able to resolve legal issues as and when they arise. The better ones will also encourage a personal relationship with the agency staff which can make the whole conveyancing process much more tolerable and occasionally even fun from an agency perspective.
One challenge with dealing with local solicitors is that they always seem to eventually let themselves down with capacity management. Rarely will a solicitor ever refuse to take on a new referral, through fear of losing the relationship altogether. So there will always be times throughout the year when their usual service will drop significantly due to sheer workload but the referring agents usually only find this out when it’s too late.
The other challenge with local solicitors is that they will all work independent from one another. Clearly there are regulations that must be adhered to with regard to independence and undue influence but this shouldn’t prevent solicitors from having a conversation to jointly resolve legal issues as and when they arise.
I once had a friend that was buying a house for c.£500k and for weeks he became more and more stressed with the conveyancing process because his solicitor was reporting to him that there were outstanding legal issues which he was struggling to resolve with the seller’s solicitor. As time went on he was contemplating pulling out altogether because they couldn’t seem to get past these legal issues. Luckily he didn’t pull out because it turns out that the issues weren’t as much legal as they were personal between the two solicitors involved. A small issue had in fact arisen which both solicitors had agreed could be resolved by way of an indemnity policy costing £125 however, for the next three weeks both solicitors then took it upon themselves to argue which of their clients should pay for it. When this was eventually brought to the attention of the seller and my friend, the buyer, both parties immediately offered to pay and in the end they agreed to pay half each. Sometimes common sense isn’t always so common when lawyers are involved!
National Conveyancing Law Firms
It all started with Countrywide Property Lawyers and the idea was good; to build larger, specialized conveyancing super firms that could realise economies of scale and so reduce conveyancing costs whilst at the same time build enough capacity and centralised support to rid of the above-mentioned capacity issues that always seemed to let the local solicitors down. There are now around a dozen or so of these conveyancing factories dotted around the country and collectively they account for c50% of all transactions every year. Most agents will at least agree that the level of service received from these firms is consistent but many have suggested that the bar which is set in terms of customer service has been somewhat lowered since their involvement within the conveyancing market.
The systems and processes that these firms have developed are truly mind-blowing. Should you so choose, you can sit through hour-long demonstrations of their latest online tracking websites and some will proudly give you a tour of their offices, including their semi-automated post room, but you must ask yourself for whom are these developments intended to benefit most? Do automated systems and customer service teams really add value to the client journey or are they intended to get as many cases through as cheaply as possible with the lowest number of complaints?
The other challenge these firms have is with recruitment and staff retention. On a personal level these can be extremely difficult places to work as a ‘conveyancer’ due to the sheer volume of clients. Consequently, many conveyancers that are able to attain a recognized qualification and proper experience will end up leaving to join smaller more personable law firms.
Many of these national conveyancing firms are now multi-million pound powerhouses with an insatiable thirst to increase market share and profitability for their investors / shareholders. When you are processing 50,000 transactions per year it can be difficult to tailor your approach for every client but conversely that’s exactly what is required from your clients, and rightly so. As much as technology evolves and these firms get richer you can’t ever negate the fact that property is a people business. For most clients, moving house is one of the biggest and most stressful things that they will ever do and so technology will never be a substitute for having a good lawyer by your side and on your side throughout.
Panel Managers
Panel managers have been around now since the turn of the century and they can offer a good alternative to the above two options. A good panel manager will act as an aggregator of work to their panel of law firms which means they can generally dictate better commercial terms and demand higher service level agreements than any individual estate agent. They are also able to work on either side of the transaction which can provide you with far greater assurances over your pipeline, if done correctly.
Unfortunately, like the larger law firms many of these businesses have become big corporations answerable to their shareholders first and foremost. Ironically, this has lead to a lot of panel managers sending their work to the above-mentioned national law firms which rather unsurprisingly then leads to the same service issues.
At the opposite end of the spectrum you will find panel managers with hundreds of law firms on their panel which can be great for giving the client choice but brings into question the amount of actual ‘management’ the panel law firms receive and does very little to protect against the above challenges of dealing with local solicitors again.
Lots of the larger estate agency groups have been sold on the benefits of panel management, with a little help from corporate hospitality, but you’ll also find that those on the front line will very often hold a different view to their head office having experienced the service first hand.
No doubt you will all have been inundated by calls and promises from BDMs of these panel managers but my advice would be to look behind the scenes to find out exactly who it is that will actually be looking after your pipeline and then as an absolute minimum read their online reviews. It would also be prudent to ask the panel manager to explain exactly what they do to improve the process.
There are some panel managers out there that will add real value to your estate agency but in the interests of impartiality I’m not allowed to tell you which ones they are. Look hard enough and you’ll find them but please don’t leave this area of your business just to chance.
Shared by: Carl Brignell carl@elite-conveyancing.com
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