The 2018 CMA Review
Elsewhere on this website (see: How do YOU choose a Lawyer?) we provide an account of a review of the legal industry carried out by the UK’s Competition & Markets Authority (CMA), and ouline what it means for consumers and for legal practitioners.
A key outcome from the report was that law firms must do much better in terms of letting clients – and particularly potential clients – have full and clear costs information before choosing a lawyer.
Costs Matters …or, Costs Matter?
All lawyers have long been professionally obliged to provide a client with costs information (and a likely estimate of the case duration) at the outset of any matter.
You may have already visited the section of our website headed “Get a Quote”, ( Online Conveyancing Quote ) where (in respect of Conveyancing matters), you can provide basic details and we will immediately email to you a firm, itemised listing of the likely costs in your transaction. If you do not use email, or if you prefer not to give out your contact details at an early stage, you may telephone us (01924 601043) and we will complete the quote with you and will post the quote to you in writing, via Royal Mail.
The point we must emphasise is that, in the way that we at DRA Conveyancing operate, you will not be committed to using ourselves unless and until you as a consumer are truly made aware of what the end bill is likely to be.
As well as telling you what our legal fees are, we work very hard to quote to you the exact sum you will need to pay in disbursements. “Disbursements” are monies which we pay out to others, on your behalf, such as Land Registry fees.
If you do go ahead and ask us to open a file for your matter, you will still not actually be committed to using us. What will happen is that you will receive our written fee & cost estimates with our very first letters to you. If you remain content to proceed, having had sight of the entirety of our terms, you would sign certain copies and return them to us by way of formal instruction. Within our T & C, we guarantee that we will not alter our fee without having discussed with you and agreeing the reasons behind any alteration.
In a nutshell – at the end of a job, there will be no surprises on your bill!
If your Estate Agent or other Advisor recommends (possibly quite strongly) that you should select a particular lawyer, then it is highly likely that a referral fee is to be paid by the Solicitor or Conveyancer to the agent.
Making such payments is not outside our rules, providing that we inform you of the arrangment. Estate Agents are not under any obligation to inform you of referral fees, but lawyers are.
We at DRA Conveyancing will set out to you if we will be paying any “referral fee” to another party. Commonly such a payment will be made by your lawyer to an Estate Agent or Mortgage/Financial Adviser.
Conveyancers are obliged to inform you, very clearly, exactly what sum has been paid, and to whom. As a principle, and as a small law firm, DRA Conveyancing does NOT set out to compete with the large local firms which often pay a referral fee well into three figures.
In reality it is of course YOU paying the referral fee. You should always ask your lawyer whether or not a referral fee is being paid, even if the firm’s initial letter is silent on the point. You should take care to establish the positon on referral fees before sigining a law firm’s initial ‘retainer’ letter, or Terms & Conditions, as it may be in those documents that the fees are set out.
The typical fee that DRA Legal will pay to a third party is £50 including VAT, or less than £43 plus vat. The reason that DRA Legal has this policy is that we have to absorb the cost, ourselves, out of what we know is already a highly competitive legal fee. There are occasionally cases where we pay £62.50 plus VAT and very rarely £83 plus VAT. Where a higher referral fee is paid it is because the referrer will perhaps be another professional, such as a firm of WillWriters. The referring firm will have carried out helpful work and (with their own client’s consent) they will have collected relevant information and provided us with important background information.
The reason that another professional such a WillWriter may refer clients to us is that the type of work referred to us is termed “reserved legal services”. This is work classified by the Legal Services Act 2007 as that which can only be carried out by Licensed Conveyancers, Solicitors, Barristers & Legal Executives.
Bigger firms than ours, or “cheap” online providers, will often use referral fees in a way which might be characterised as “buying work”; the worry for consumers in such circumstances is whether the firm will then use unqualified or inexperienced staff or “case-handlers” for much of the Conveyancing work, so as to cut costs. Alternatively, or possibly in addition, a law firm might impose ‘hidden extras’ as a means of recouping referral fees paid out. We stress that referral fees themselves are not at all “wrong”, but a central point of the CMA Report outcome is that consumers must be be given full transparency as to the monies they are paying, to whom, and what for. In this regard, clients are entitled to know that some firms may pay referral fees to agents of around one third of the basic legal fee that you have been quoted. We ourselves, at DRA Conveyancing Ltd simply cannot afford to compete on that basis, if we are to be able to provide to you the dedicated service of our fully qualified and experienced legal professionals.
Finally, and again, we do of course recognise that many clients are extremely costs-focused and are fully comfortable in dealing with more remote or less accessible lawyers, and you may want to “shop around”.
However, we at DRA Conveyancing take the view that clients wish to entrust their legal matter to a firm which is fully open & honest as to costs, and in addition is accessible, with fully qualified and experienced staff.
We sincerely believe that we meet this criteria.
Examples of our Fees
For example, if we act for you in a sale or purchase of a £150,000 house, we will charge you only some £450-£475 as our professional legal fee. Additional fees are always set out in our firm quote, and would cover such matters as dealing with a mortgage, ‘help to buy’, or leasehold property. Note that all fees are subject to VAT at 20%. Our base fee is effectively a fixed price, and regardless of the type of transaction, will ALWAYS involve several or many hours of detailed perusal of papers & correspondences, dealing with enquiries, and in delivering to you accurate advice in writing and verbally.
A typical Sale & Purchase
Timescale – How long does it take?
Firstly, a few lines on ‘case duration’ – i.e. how long does it take to buy or sell a house? The old adage ‘how long is a piece of string?’ applies! However, on a practical and realistic note, it is correct to say that a sale can complete in 2-3 weeks or less; this of course though relies on the Buyer being ‘ready willing & able’ to complete. This means that the Buyer must have got in place the entirety of their funding arrangements. This may involve a mortgage, something which will require survey(s) and enquiries which are outside of your own or your Conveyancer’s control. There may also be a ‘chain’, which means that the person buying from you may himself/herself have a sale of their own to complete.
In practice therefore, a sale typically takes some 6 weeks, or less to complete. It follows that a typical purchase will take the same time, although sometimes a little longer; this is because your conveyancer will be raising enquiries of the sellers. The enquiries will be necessary, and significant, and obtaining satisfactory responses for your own (and your lenders’) benefit is of crucial importance.
Some ‘national average’ figures can be stated, as below, but please always bear in mind that as with any ‘average’ there are often unique circumstances which mean that your own case might not follow the average.
The national average timescale for conveyancing is between 9-10 weeks. Conveyancing for simple purchase transactions can take just 4-6 weeks but a more complicated transaction can take much much longer to complete. A typical Sale or Purchase will take 6-10 weeks. If leasehold the process might need longer, due to dealing with other parties, making the duration 10-12 weeks. Purchases where there is a chain are largely out of your control, as the ‘chain’ is only as strong as its weakest link; so, just one party in a chain can delay – or even stop – your transaction. No conveyancer can accurately give you a firm timescale for a conveyancing transaction, but you should always let your conveyancer know what your own expectations and wishes are, and whether there are any specific periods in which you cannot complete the matter. There are many factors that could delay the process; it is important for you to recognise that, in the England & Wales Conveyancing system, there can be no certainty whatsoever, as to when and whether the transaction will complete, until contracts are ‘exchanged’; only at that point are the parties committed to completing the proposed transaction.
What are the Key Stages in a Transaction
The Key stages of the buying / selling process, and details what is involved at each stage, can be found via the following link to the Council for Licensed Conveyancers (CLC, our professional regulatory body).
Please see here: CLC - Home Buying Process and CLC - Home Selling Process
Fees & Costs
In terms of costs, every case differs in some way, but to try to boil this down for you, we present the costs in a typical case.
The following figures are actual images from what you would receive if you telephoned or were to use our website’s quote generator to build your own personalised quote. You would receive a detailed itemised listing, in writing, via email, immediately. We will post the quote to you if you prefer not to give us your email address at the early stage.
In our examples we will assume the client is a person who owns one property only and is simply moving home. You will note that our itemised quote is accompanined by an outline of the basis of the quote, and we do set out the type of issues (such as the property being leasehold) which will lead to increased work and therefore higher costs.
Sale at £120,000, no Mortgage to redeem (pay off)
Purchase at £240,000, no Mortgage
In our examples, we have assumed that no mortgages are involved. Where mortgages are involved, a firm will have additional work to do and will charge you for the work. We ourselves add £50 plus any banking costs where applicable. You should always ensure that your conveyancer states at the outset what these costs add up to.
How do we at DRALC compete?
Firstly, we are confident that our own fee estimates are given to the consumer with full transpareny – we do not ‘hide’ any ‘extras’. We always provide the fullest possible quote based on the information you give us at the outset.
We are confident that, given the above, we will always be able to quote a fee which is competitve and attractive to any clients who are comparing multiple lawyers’ prices.
That said, we will say that we do not set out to compete purely on price; instead we compete on Service. Subject as above our legal fees are honest, clear, and competitive. But we will never claim to be “cheap” just to receive your instructions. We firmly believe that consumers of legal services – in particular those involved in such major matters as home sales & purchases, do recognize that their cases should not be entrusted to unqualified or inexperienced conveyancers.
We are aware of studies which suggest that only 5% of consumers will choose their lawyer on the basis of price alone. This is why we emphasise again that 'service is king' and we refer potential clients to the well-respected consumer review service Trustpilot.
Please visit our Trustpilot page to see our up to date ratings along with genuine client reviews.
Other Legal Services – Probate , Wills, Power of Attorney
Whilst Conveyancing is an important part of our business offering, we are – in exactly the same way as solicitors – fully regulated and qualified so as to meet your requirements in the area of Wills, Probate, and Powers of Attorney.
Other sections of our website set out further information about these services.
Regarding costs and fees, we set out here our typical fees.
Single Will – £150 plus VAT at 20%
Double, or Mirror Wills – £260 plus VAT
These fees INCLUDE free storage within our own, secure offices (our premises are a former Bank!)
Also included free is our advice as to how the family home or any jointly-owned property can be impacted by the spectre of Care Fee costs and Inheritance Tax.
Note that if Land Registry work is needed, to give effect to any helpful measures, we will quote separately. For example, we commonly meet cases where we discover that the family home may be registered in the sole name of the husband. This leads to a need to transfer the property from one name to two. It may also ‘trigger’ a compulsory First Registration of the Property at HM Land Registry.
Regarding the timescale, we are under an obigation to proceed as rapidly as possible once we have received your instructions for Wills. In practice we would expect to complete your Wills, from initial meeting through to you signing (‘executing’) the Wills. We must work even more quickly than this, if for example we have been made aware of a need for urgency, if for example you have health worries, or are to undego surgery, or if you were separating or divorcing.
Please see our separate section on this topic, on our website. At the simplest level, we would be able to obtain the Grant of Probate for you at a fixed price of between £500 and £750.
This method would involve you yourself providing to us full and complete information regarding the deceased and his or her assets. We would not be “going on record” with any banks, building societies, investment firms, Department for Work & Pensions, etc. Nor would be attending to the calculation or payment of Inheritance Tax (if any).
For a “full administration” case – ie where we take on, on your behalf, all of the above, we would charge an hourly rate. Our hourly rate will typically be £195 per hour, with letters and time billed in “units” of 6 minutes. If our firm’s principal Mr Adkins had conduct of your case then the rate would be between £195 and £225 per hour. All fees are subject to VAT at 20%.
In probate cases there is always a ‘Court Fee’ which is currently (when a lawyer makes the probate application) of £156. The fee is £215 if a non-lawyer makes the application for the Grant.
Note that a relatively recent review has proposed quite significant new fee scales for Probate. However, the new proposals are that fees will be charged in bands, and will range from £250 to £6,000. Additionally, it is believed that the new fee rules will mean that more estates will need a Grant of Probate, via the raising of the current threshold from £5,000 to £50,000. These measures are (as at September 2020) not yet in place. If and when effected, this means that banks etc. will always insist that you obtain a Grant of Probate in order to release a deceased’s monies to the Estate. This is a major change, which will inevitably involve higher costs than at present. The new fees have been attacked as a ‘secret death tax’, but the Courts & Tribunal Service does defend the increases as being necessary to meet the costs of providing the service in a way which reflects the ability to pay.
If you are currently holding off obtaining probate in the estate of any deceased, eg if a property or other significant asset is not yet to be sold, you may wish to contact us for no-obligation advice.
The timescale for Probate work varies enormously. If we are obtaining the Grant of Probate on your behalf, in a relatively simple estate where no Inheritance Tax (IHT) is payable, then 4 weeks or less is required. Where IHT is payable, or if the deceased had extensive assets, such as property, shares, and with multiple bank & investment accounts, then typically 6-12 months will be required. Where Probate does become protracted, it is usually possible to make interim distributions of gifts or bequests to Beneficiaries of the Deceased’s Estate.
POWERS OF ATTORNEY (LPA)
There are two types of Lasting Power of Attorney. One is for ‘Property & Affairs’. & the other ‘Health & ‘Welfare’.
Our fee for a single LPA, for one person is £300 plus VAT at 20%. Two LPAs are £450 plus VAT. If a couple, eg husband & wife, wanted all 4 LPAs, our fee would be £750 plus VAT. Our work would involve meeting with you and where appropriate your family, completing all relevant forms and ultimately submitting the application(s) to the Office of the Public Guardian (OPG). Note that the OPG is part of the Court of Protection (COP), and the Court fee for each LPA is £82.
As for the timescale, LPAs will involve two initial meetings, during whch you and your Attorneys will give us instructions and will sign the various documents. This will take, typically 2-3 weeks (depending on the geographical location of your Attorney/s). After this, we are obliged to apply to the OPG, which being a Court application has it’s own ‘lead-time’, typically some 3-4 months.
As with Conveyancing matters, our fees and any related costs in Wills, LPA and Probate matters will be always be quoted to you at the outset and we will not vary such costs unless we have agreed with you the reasons why.
Please do not hesitate to telephone us (01924 601043) if you wish to discuss your requirements.
Derek Adkins, September 2020