The results of an unscientific conveyancing pricing poll!
During a Law Society webinar presented by Scott Simmons and myself on 16 May 2022 called “Win , Price , Do and Repeat”, Scott and I asked a few poll questions- you know the kind of thing to get a bit of interaction and make sure that the delegates were awake.
We asked delegates to confirm what they would be prepared to pay to receive a good service for a conveyancing transaction, when selling a property valued at £650,000.
The survey identified that: -
13.8% of people would pay up to £1000
33.8% up to £2000
35.4% up to £3000
7.7% up to £4000
9.2% more than £4000
The results of the survey got me thinking. Was this a one off? Was the audience skewed by virtue of the fact that they were entirely an audience of lawyers?
I decided to repeat the question using a LinkedIn poll. Now, I do not profess for one moment to be a pollster, and for those of you who know LinkedIn, you will know the polls are limited to four questions.
Therefore, I posed the following question on LinkedIn and asked my contact base to vote, like and share.
The question was: -
“What are you prepared to pay for the sale of a house priced at £650,000. Your requirements are a great service from the lawyer. Cost excludes VAT.”
The results from the 158 people who participated were as follows: -
22% up to £1000
49% up to £2000
18% up to £3000
11%. up to and above £4000
As LinkedIn only allows you to pose four questions in a poll, I couldn’t differentiate between those that would pay up to £4000 and those that would pay above that figure.
When I looked at the profiles of the people who voted in the various categories, there were some interesting observations.
They were based all around the UK. In fact, one Scot even sneaked in!
In the up to £1000 category, some of the votes were cast by heads of conveyancing departments, law firm founders, law firm partners, conveyancing managers, and others working in the conveyancing space.
The same was true in the category of up to £2000. Although this was by far the greatest response to the poll.
In the up to £3000, again Managing Directors of law firms featured as did partners and trainee solicitors.
In the up to and above £4000 sector, they were once again experienced conveyancers, marketers, project management experts, property management director, law firm owners, conveyancers PAs, and HR professionals. There was one head of conveyancing at a large regional law firm.
I thought I would then take a look at what some law firms charge for conveyancing.
I chose decent mid-size law firms. You would undoubtedly recognise the names, and in the main were in the 150-350 employees in size. Again, I was searching for a price for the sale of a £650,000 property.
I duly scoured the internet and had a look at some of the pricing information that was on some law firms’ sites tucked away.
For those firms that offered an automated conveyancing calculator service, I punched my details into their systems and got e mailed quotes returned.
To spare any blushes, I won’t actually name the firms concerned. The prices were revealing/depressing (delete as appropriate)
1. Large Southeast firm with national reach £995
2. Large regional Midlands firm £1350.
3. Large East of England regional law firm £1695
4. Mid-size Buckinghamshire based law firm £1150
5. Large East Midlands law firm £1250
6. Mid-size Merseyside firm £1195
7. Mid-size East Anglia firm £1100
One firm which offered one of the lowest prices invited me to put in my “discount code” as part of the quote process. I therefore was left with the impression I was overpaying as I hadn’t got a code…I also assume their price was even lower.
One Home counties firm rather interestingly offered on their website a “fast turnaround conveyancing service”. I thought this was a great idea. I was invited to use an e mail address created especially for this service. The response to the e mail I sent was “mailbox unavailable”. Maybe I was supposed to send a letter or call in. I did neither.
One of the responders to the poll (who had indicated that they were the head of a conveyancing department) felt the right price was £4000 or above, but actually had a figure displayed on their firm’s website of £1500.
So, what does this completely unscientific poll actually tell us? My takeaways are: -
People will pay different prices for the same service. Perhaps there should be no surprise there.
100% of law firms I contacted using website calculators do not seek to charge more than £2000.
Value was left on the table in that 78% of those who responded would pay up to £2000 and above
The follow-ups from my visit to the law firms’ websites were sporadic. Interestingly enough, one of the most professional follow-ups was from the firm that was charging the least. Perhaps they find that they are very good at following up because they have to win more work. I don’t know. I did receive a few automated emails asking if I wanted to proceed. I did receive one or two calls.
Lawyers don’t value what they do very highly and certainly much lower than some people are prepared to pay.
Hiding behind automated excel calculators may be an efficient way of getting quotes out to people. However, in 78% of cases value is being left on the table. You could charge more.
When most law firms talk about “putting the client at the centre of everything we do “, I don’t quite understand why these calculators even exist? What’s wrong with having a chat with a person, building rapport and then once you’ve done so, increasing your price so that you fall into the up to £3000 or £4000 and above bracket. Your lawyers can make the same amount of money but don’t have to work as hard.
It won’t appear on websites that the firm’s strategy is to “act for high net worth (HNW) individuals”- but it will feature in most firms’ strategy plans. How does this marry up with offering conveyancing at less than £2000…can’t the HNW you are after afford more, or is your positioning totally wrong? Could you be losing work as you are too cheap? I wouldn’t use a firm quoting £995.
One of the other questions that was asked during our Law Society webinar was: -
“Which of these statements is closest to the truth?
1. We have a pricing strategy and policy that is consistently applied
2. Individual matters are priced by individuals on a best-efforts basis”
You may or may not be surprised to know that the results were: -
1. 40%
2. 60%
For “best efforts”, I suspect you could replace it with “make it up as we go along.”
How about this for an action plan: –
1. The management review the charges that the conveyancing department are currently using.
a) Have a full and frank discussion about why these figures exist, how they came to be and whether they are high enough. When someone says (and they will) …” That these are the market rates for conveyancing” ask them where this so-called market is? What are the figures based on? In many cases it will boil down to “this is what we think the competitors charge.”
b) Accept that the price people are prepared to pay is not the same.
c) Our/the client’s perception of what is value is not the same.
d) Value is not rational. Why do people queue up outside shops at midnight to get the latest iPhone?
e) Value is contextual. You will pay more depending on your circumstances. It could be that this is urgent.
f) Stop chasing the lower end of the market. If your competitors want to have a race to the bottom let them.
g) How about your firm adopting a mentality of being a price setter in your area rather than a price follower? I did find one firm (small firm in a large town) that advertised on its website that its charges were £3500 to 3750. Take a bow…. (Sorry said I would not divulge names).
h) Pricing should be taken away from those who aren’t terribly good at it.
i) Incentivise staff to sell at a higher price.
2. Recalculate the price table you have. Regard these figures as bottom-line walkaway charges. The bare minimum that can charged.
3. Abolish low self-esteem. Law firms need to become more confident. There are enough quality customers and opportunities. Do not get in the mentality of selling a commodity. Don’t capitulate when customers say they won’t pay a price given. Be prepared to lose clients. Bad clients drive out good clients.
4. Have conversations with prospects and help them understand the value that you provide. Help your lawyers understand their worth.
5. Train your people to have conversations with prospects. Engaging conversations, about the prospects, reasons for moving, the location they are moving too, schools, pubs and local restaurants. This is where rapport is built and then ask for the business.
6. Do not assume that every prospect is ringing around half a dozen firms. They are not. If the prospect has been recommended by a friend or are an existing client, then they have affectively been pre-sold.
To quote John Chisholm, a Melbourne based friend of mine who works with many Australian law firms... “Before you can charge a premium price you first have to believe, internally, that you are worth it. There is great nobility in being paid what you are worth.”
Amen to that!