Jardine: Sector lacking confidence
Most conveyancers think they should be charging clients more but only a third say they and their colleagues know how to “confidently deal” with objections to fees from clients, a report has found.
Along with low confidence, it found low morale, with a majority of conveyancers (52%) saying that, if they could “wave a magic wand”, they would leave the profession.
Pricing Confidence, Profit Awareness, Strategy and Values was based on a survey of 80 conveyancing firms carried out by Shaun Jardine, director of the Big Yellow Penguin consultancy, ahead of June’s Bold Legal Group conference, which heard that estate agents would “absolutely, categorically” accept conveyancers increasing their fees if it meant speeding up the process.
More than four in five (83%) of conveyancers said they believed their firm should increase their fees, with 15% suggesting a rise of 10% and almost a quarter 20%, while 7.5% argued that they should go up by 50% or more.
This suggested “value is being left on the table and prices can be increased”, the report said.
Mr Jardine and Bold Legal founder Rob Hailstone observed that, if only 32% of conveyancers said they and their colleagues knew how to “confidently deal” with fee objections, training on the issue could deliver a “quick win”.
They said creating “a list of FAQs and dealing with objection handling” would give conveyancers confidence, especially if wording was approved by management.
Only a relatively small proportion of firms (15%) provided service level options for clients – such as a gold, silver and bronze service at different prices.
“Again, this seems like a quick win area, as some firms do,” said the report. “Those that do are exploiting a competitive advantage and their offering will be different to most. Why not offer choice? We don’t all drive the same cars, wear the same clothes, and drink the same wine.”
But there was resistance to this approach, with nearly half of respondents saying they would not like to see their firms adopting it. Around 43% were willing to at least give it a go, however.
A large minority of lawyers (43%) said their firm tended to some extent to “reduce prices based on what our competitors may charge”, compared to the 38% whose firms never did this.
Just a third said their law firm’s current pricing policy reflected “the way I like to do things”.
Two-thirds of conveyancers said they “always” understood the profitability of the firms they worked for, and a further quarter “to some extent”. However, only 22% said the people at their firm understood how decisions impacted profitability.
Other research has shown over the years that law firms are poor at following up with clients after providing a quote or initial information, and this survey backed that up – only 32% said they always followed up the quotes they gave, while 23% “usually” did this.
The report said: “This seems to suggest that new systems need to be introduced for quotes to be followed up.”
A narrow majority (51%) said their firms “never” paid introduction fees to estate agents and other referrers. Only 15% said they “usually” paid referral fees, while 28% paid them “sometimes”.
Just over half of lawyers said their firms allowed them to turn work away, while 76% believed some clients should be sacked because they were “too painful and/or unprofitable to act for”.
The three issues most commonly cited by conveyancers as relevant to their firm were “work-life balance challenges”, “lack of confidence when asking for an increased fee when a matter is progressing” and “risk of burn-out for some individuals”.
Meanwhile, over two-thirds of conveyancers (68%) thought their numbers would decrease over the next 12 months, with a further 11% predicting that the number of conveyancers would fall “dramatically”.
Mr Jardine and Mr Hailstone wrote that the survey “paints a picture of a practice area which is a little demotivated, under pressure and lacks some confidence.
“This perhaps should not be surprising, when many lawyers who have left conveyancing are either feeling burned out or unappreciated, and they have been unable to be replaced.”
They went on: “We hope the results will draw attention to how people are feeling in the sector and hopefully encourage those in leadership positions to do something about it.
“One thing is sure, action does need to be taken as there seems to be more people leaving the conveyancing profession than intend joining it in the future. This means the workloads will only increase.”
But they said a reluctance to change was also concerning, “simply because if you do what you’ve always done, you will get what you’ve always got”.
Change has to happen, they argued. “Are leaders up to the task of leading that change? Proactive organisations are re-engineering their business models and there are some disruptors not only on the horizon, but well and truly embedded in the profession.”
Conveyancing suffers from the classic case of the pursuit of turnover as opposed to the pursuit of profit.
I doubt many involved in conveyancing know what the proper to charge is ie what the cost of running the file is and what profit is obtainable on top of that. Fixed fees has forced this love of turnover. Of course you can fix the fees higher than others and provide de a better service so that your clients tell their friends.
Relying on turnover is a fools’ game.