Whenever the subject of “online” agents is mentioned there is an outpouring of either dismissiveness or a strong desire for them to go bust so the industry can go back to the way it was before. Unfortunately, the low-price genie is out of the bottle and as some of the online agents have demonstrated, this does not enable them to provide the service needed in today’s market. However, from a consumers’ perspective, these offerings are innovative, modern and let’s face it, when you’re picking an agent, it’s only got to be “good enough”. The challenge we find for agents is that they are having to work harder than ever to get the message across that when it comes to getting deals over the line, service makes the difference and it is worth paying the right price to achieve this.
“Just work harder”
However, why is it, given that agents are only too aware of the implications of low-price services, so many are bamboozled into recommending a lawyer they know is “just good enough” but not necessarily the most able to get to exchange? Firstly, let’s gloss over the fact that recommending a service purely because there is a commercial interest to do so, could result in a jail term of up to 10 years under the Bribery Act 2010. Agency owners sign up with panel managers and lawyer referral websites because, as we have seen, consumers love low-price offerings, and as they mostly hate lawyers anyway, why not make some money through them?
We know it’s easy for us to sound preachy sitting in our ivory tower here in Guildford, while the high referral fees on offer brings the promise of a welcoming rosy glow to the bank statements of a typical agent. However, while we cannot ignore the demands of the business, the experience of the negotiator and client is often poor. Indeed, when we asked a senior director of a large agency about his concerns about the extra time and effort his staff would now need to spend due to the poor quality of lawyers available through such intermediaries, his answer was clear; “They’ll just have to work harder – that’s what they are paid for”.
You get what you pay for
The issue we have is while agents decry low prices amongst their competition, as soon as the deal is put together, those concerns are somewhat inconvenient. Too often negotiators are forced to direct their client or applicant to an online supplier who then hands them over to the dusty clasps of a desperate lawyer working amongst piles of paperwork in a converted post office in Farnborough. While we would all like to believe that service and execution beats price every day, in such a transactional industry as property, there is far less flexibility that many would think and we do question the answers that people give to market researchers.
Indeed, clients told us we were undercharging for the level of service we provided, so, two months ago we increased our pricing for more expensive leasehold purchases by 20%. Despite having an outstanding sales team and the most innovative product offering in the market today, combined with a Trustpilot rating to die for, our win rate fell by nearly 50%. Although this shows that it is not always possible to charge the price that you think is appropriate, it is vital to remember that being “good enough” is not always good enough. Low prices impact caseloads which directly impacts service delivery. Our lawyers are limited to around 55 cases, managed by two full-time members of staff, which delivers the exchange rate and quality of responsiveness our clients and referrers expect. However, interviews with candidates from our competition reveal caseloads as high as 120 with a single person, making it clear that compromises are being made with both quality and service levels.
Times up for “good enough”?
Government figures for transaction timescales show that we are closing in on the ugly benchmark of 20 weeks from instruction to completion and fall-through rates climbing as well. We believe this is due in no small part to a reduction in the quantity and quality of lawyers today.
With no signs of any major improvement in the market and the impending ban on referral fees, it seems to be a good time for agents to review their exchange rates and see how they can be improved. Indeed, we are talking to a number of agents who are analysing the performance of the lawyers they recommend and are working with us to understand what we need to change to improve. We hope this approach will mean that soon, the time will be up for those lawyers that continue to be just “good enough”.