There is a groundswell of opinion now damning the practice of solicitors paying estate agents up to £300 in order to secure the conveyancing work. Despite homebuyers being free to appoint a solicitor of their choice, or a conveyancer, over 56% of sellers select their solicitor on the advice of their estate agent, while 45% of buyers do the same. According to guidelines, consumers involved in a property transaction should be informed of any referral fees but in reality many are not.
Over the past three months, the Law Society Gazette has been inundated with letters complaining about referral fees. Banning referral fees will harm the legal profession and have no effect on reducing law firms' marketing costs, according to Darren Werth, the Claims Standards Council's chair - see Referral fees ban will drive business underground.
While the Referral ban will not reduce costs because: "In any economy where solicitors run businesses for profit, they need referrals. Solicitors don't market their businesses very well. If a solicitor spends half of his marketing budget with an advertising company and the other half with a claims management company, which is the bigger evil?"
However the Law Society does not have the power to regulate the profession. That is the role of Government and the Legal Services Board.
Article on yourmortgage.co.uk