Why are practitioners devaluing the industry with cheap fees?

MELISSA Barlas is on a mission to help Australia’s under-fire conveyancers.

The multi award-winning conveyancing lawyer is using her social media and podcasting presence to campaign on behalf of the small business conveyancing community as it comes under pressure from all sides.

Top of the list of issues facing the sector is the race-to-the-bottom charging culture, according to Melbourne-based Conveyed founder and director Melissa.

But there is a long list of insidious problems facing an industry looking down the barrel of significant costly compliance reforms.  

“I’ve had plenty of great discussions with conveyancing practitioners about reform for our industry,” Melissa says.

“One place to start is for practitioners to start charging their worth.

“There’s a culture of cheapness and under-pricing for work that is so valuable, so integral, to the successful completion of a property transaction.

“Without conveyancers, there is no property transfer. No personal property goals are realised without the help of a conveyancer.”

So why do practitioners devalue the industry with cheap fees, asks Melissa?

It is a question often raised by conveyancers across Australia, who rail against the immense pressure they are under to oversee the crucial, fast-paced work needed to deliver a smooth transaction.

As Melissa points out, they must fulfil multiple roles, including being “coordinator, mediator, guidance coach, financial advisor and all the other hats that come with completing a property transaction.”

And they pay one of the highest insurance premiums, for the privilege, she adds.

“Cheap fees only feed the narrative that conveyancers are the bottom feeders of the property industry. The ones not worth much. When that is simply not true,” says Melissa urging colleagues to “band together to support our industry and charge our worth once and for all.”

One reason for the pressure on pricing is the problem of referral fees, according to Melissa.    

Using the example of a fellow conveyancer whose packaged $1,800 fee was turned down at the suggestion of a buyer’s agent – despite the client being happy with that original fee – Melissa suggests referral fees had a hand in the way the conveyancer was undercut.

“The partners of agency told him to recommend another conveyancer charging $1,250…despite the fact that the client was not picky, was paying the advocate anywhere between $10-20k for their service AND was buying a $2 million dollar property,” she says.

“I’d genuinely like to know – as would many other conveyancers and lawyers – what drives this downward pricing competition in the face of these facts?

“Maybe it’s referral fees. Maybe its lack of education about our true value.”

Melissa believes the country should follow South Australia, Western Australia and Tasmania with an outright ban on the practice of legal firms paying referral fees to real estate agents.

“Referral fees are not illegal in other states, which compromises the integrity of the conveyancing profession,” she says.

“The only requirement in those states is to be transparent… which is hardly taking place.

“There are players prioritising their financial interests over their clients’ best interests, resulting in a conflict of interest.

“Most importantly, consumers are impacted as those who participate in the bidding war have their lips sealed so consumers can’t distinguish a high-quality experienced conveyancer that engages in ethical and safe practices from the ones bidding for business.”

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