Kickbacks to real estate agents should be illegal for all conveyancers

PASSIONATE property lawyer George Sourris believes that allowing kickbacks in some states is leading to a race to the bottom mentality among practitioners.

“I personally believe that paying for an introduction for a legal service is ethically incorrect to begin with,” he says.

“I’d be happy to see it outlawed.”

George, whose Queensland-based Empire Legal law firm is involved in hundreds of transactions a month, says the whole country should follow the regions where introduction fees are banned.

Currently in Western Australia, South Australia, and Tasmania, legal firms are not allowed to pay referral fees to real estate agents. 

In other states, referral fees are legal if disclosed. In NSW, real estate agents are prohibited from accepting referral fees or gifts that could create a conflict of interest.

“I just think it’s devaluing the incredibly important work we do – and it reflects poorly on the entire conveyancing industry,” he says.

George criticises operators who pay for introductions to acquire clients, adding: “These firms, who are paying the $50 or $100 for the referral to acquire the business, are really devaluing the professional service of residential conveyancing.

“It has a detrimental effect on QLD law firms across the board – and eventually impacts the end consumer.

“It makes it more challenging for honest businesses like ours, who genuinely care about our client’s experience, and have it at the forefront of what we do, to compete. We pay high salaries to our lawyers and senior paralegals – whose expertise is desperately needed in our fast-paced industry.

“That’s why our fees might be slightly more – you are paying for experts, who take pride in the quality of their work and making sure our clients have the best experience in the industry. We have worked hard to hold a 5-star average on Google, with over 2,400+ reviews.

“The problem is these firms who are paying the kickbacks and provide “bargain bin style conveyancing” are really just warping the end consumer’s perceived value of what a conveyancer should cost and what they actually do.

“It’s treated like a commodity on a conveyer belt.

“The quality of service in firms who operate this model is evident.

“The reality is, if you go down this path, you have someone who has no formal training and limited experience, handling 60+ transactions a month – which is a recipe for disaster. These workers are overworked, underpaid, undertrained, and stressed.

“And that then has an impact on the consumers who we know are going through one of the most stressful times of their lives.”

He is frustrated that the industry has found itself in this position.

“It just blows my mind that there’s this culture of, ‘oh, this guy down the road’s doing it $100 cheaper, I’m just going to go with them. Conveyancing is not a commodity – it is a professional service. Get yourself a professional.”

George says the problem lies with the fact that the industry is allowing law firms to pay the referral fees.

“It turns it into a two-horse race where one of them has been given an unfair advantage,” he says.

“There are the non-kickback firms (like us), and then there’s the cheap, conveyor belt-style kickback firms.

“There are agents out there who won’t recommend us, even though they know we do a better job, because they want to get paid the $100 for the introduction.

“Considering how much an agent makes in commission, the $100 is a pittance, and honestly, embarrassing that the agent wants the kickback!”

“That’s the problem. The fact that it’s legal and allowed by the QLD Law Society, who say it’s fine as long as you disclose that you’re getting an introduction fee.

“I genuinely don’t believe that the disclosure is actually being adhered to for a significant portion of transactions where referral fees are paid.”

Transparency is key to George’s vision for the future.

Right now, George says, the decision-making process for many clients is influenced by agents who receive kickbacks.

“The entire decision-making process for a lot of people is being made by a real estate agent who’s receiving $50-$100 in their back pocket per deal.

“My dream and vision is to see a free market where people are encouraged to Google conveyancing firms, and make a fully informed decision on who is the best legal firm to represent them through, what is, such an important milestone in their life.

“Buying or selling a property is almost certainly the most expensive asset transaction happening in someone’s life. DO NOT try to go with a cheaper firm to save a few dollars. “Instead, spend five minutes and Google different firms, and pick a highly rated, trusted conveyancing firm, who will actually care about you as a client!”

George concluded: “I’m ultra passionate about this topic and if we don’t start beating the drum in public via published news articles, and get them on social media, nothing’s going to change!”