An independent study undertaken on behalf of the Legal Services Board showed that the average conveyancing fee when a referral fee is paid is £543, whilst the price when no referral fee is paid is £687.
Customer satisfaction amongst fee paying firms was 90% and 57% of estate agents said that firms which pay fees provide a faster service than those that don’t.
The research also suggested that firms which pay referral fees invest in technology to increase efficiency and these efficiency gains are then passed on to consumers.
Eddie Goldsmith, senior partner at solicitors Goldsmith Williams, said: “I have always resisted the use of the term ‘referral fees’ because it implied that intermediaries are paid simply for referring a client and doing little else, which isn’t true.
“Goldsmith Williams has always worked closely with introducers, who play an important role in helping a case move from offer through to completion.
“We believe, therefore, that it’s only right that intermediaries are properly rewarded for the considerable amount of work they do.
“After, all they are remunerated by lenders and should also have the right to be remunerated by conveyancers.
“Interestingly, the Solicitors Regulatory Authority prefers to use the term ‘financial arrangement’, which makes far more sense to me.
“The important point is that any financial arrangement between an intermediary and a solicitor must be properly disclosed to the client and as long as it is, clients have nothing to fear.
“On the contrary, the research published by the Legal Services Board shows that clients usually have much to gain.
Gemma Harle, managing director of network TenetLime, said referring work to conveyancers that pay referral fees can work well for brokers, particularly if volumes are such that it’s worth referring to the bigger bulk conveyancing firms.
She said for many smaller brokers across the country though, referring business to the local solicitor can be as good an option because of the reciprocal business opportunities.
And she added: “There’s no doubt it works for some brokers and the service is good, but I’d say it’s swings and roundabouts. Smaller brokers may find it makes more sense to use the conveyancer on the high street.”
Introducers can refer business online to Goldsmith Williams using its dedicated portal, GW live.
