A conveyancing quote is just that - a simple legal fee reflecting the cost of the work. Everyone in the chain earns a fair amount and what the client sees is what they get? Right?
Well, not quite.
We’ve presented at plenty of events over the years, but the reaction we got from brokers at a recent Financial Reporter roadshow was one of the most interesting we’ve witnessed.
It was about what’s happening behind the scenes of a conveyancing quote. Specifically, what’s being pocketed by some panel providers, particularly in terms of what their adding to panel fees and search costs, and the fact most brokers had absolutely no idea it was happening.
What we showed was simple: a comparison of quotes for the same law firm across several different distribution routes, including conveybuddy. As you can imagine, the fees varied, and often greatly, by well over £200, and it was news to many brokers what made up that difference, and the size of the cut being taken by some of the providers highlighted.
Brokers always expect us to come and talk about cost, so they assume all presentations are going to be about ‘cheaper’. But when we put up the figures showing the referral fees, panel fees, and search margins – real numbers taken from real examples – the mood shifts. I’m not exaggerating when I say jaws dropped.
Here’s what they saw: one provider (us) might be taking £75 on a case, another - for the same work by the same law firm - was taking £215. One was charging £175 for the search pack; another was charging over £315 for the same searches. As these fees are subject to VAT this meant the most expensive panel was marking up their quote by £336 more than the cheapest. And in nearly every case, the law firm was being paid less by the provider charging the client more. Brokers weren’t shocked that our platform was lower cost - they were shocked that someone else had been making nearly £500 from their client’s conveyancing bill, and they hadn’t known.
It’s easy to underestimate how damaging this kind of revelation can be. Brokers trust providers to play fair. They trust the quotes they generate as a reasonable reflection of the service their client will get. So when they realise the only reason one quote is more expensive than another is because the provider is extracting maximum profit across multiple pay points – and worse, that they’ve probably been recommending that route for years – the sense of frustration, and dare I say it, betrayal is real.
The irony is this isn’t about law firm pricing. Most firms charge similar base fees. The difference is how much is being taken for panel management, how inflated the search packs are, and whether the platform sees the broker as a partner or a captive audience.
We’ve never pretended to be saints. We take a referral fee. We make a margin on searches. But what we don’t do is gouge the client or the law firm to extract every last penny from the process. And because of that, our law firms actually earn more than they do on other panels.
Clients pay less, law firms get paid fairly, brokers get transparency, and everyone walks away with their integrity intact.
When we asked a few brokers after the session what they thought, there was a feeling of being ‘mugged off’ by other providers. And that’s just from a quick view of what’s been going on under the bonnet of a conveyancing panel provider setup.
And look, we’re not claiming the market is totally broken, but not all panel providers are equal, we entered the market because we felt there was a better way to be doing things, and that brokers shouldn’t have to tolerate the long tail of greed and opacity that’s been around for a long time. Is this now even sustainable for others to pursue this type of strategy? Brokers are waking up to it, clients are starting to question it, and under Consumer Duty, it’s going to get a lot harder to justify.
This is a real opportunity for change. Brokers are now asking better questions – not just about cost, but about who earns what, and why. That kind of scrutiny is long overdue. And if we’re being honest, the only reason this kind of greed exists is because it’s been allowed to hide in plain sight for too long.
Sunlight, as they say, is the best disinfectant. And right now, there’s a lot of sunlight starting to hit those fees and just where the huge amounts of client cost is actually going to.
