Fee sharing

A week ago conveyancers heaved a collective sigh of relief when an attempt by non-conveyancers to, legally, do reserved conveyancing work, was given short shrift by our High Court.

Our profession’s retention of reserved work and our prohibition on fee sharing by attorneys with non-attorneys, go hand-in-hand. The latter is designed to ensure legal independence and prevent touting/buying work and the former to prevent those, who do not share our ethics and expertise, from gaining entry into such work. The ultimate goal is the protection of the public by the maintenance of standards within our profession.

The irony of watching our profession fight tooth and nail for the retention of reserved work when its members busily undermine that very retention, cannot be ignored. The fact is that there are many of our number who would happily flout ethics if, by so doing, a commercial advantage over competitors may be had.

There are many examples of this; some more sophisticated than others, but the intent of all is to gain an (unfair) advantage that others, who practise by the rules, do not have. 

An example of allowed expertise sharing is the employment of non-practising attorneys within, for instance, accountancy practices as mere employees and so on.

Non-allowed sharing is common but very slick. Spotting them is not always that easy: some attorneys do partially reserved work, such as estates, via (delightfully termed) special purpose vehicles, often run from within their practices and utilising practice staff. The question must arise why it is necessary to do partially reserved work outside of practice that can be done by attorneys in their own name: the only possible reason for this is to gain an advantage that the controlling professional body would not otherwise allow, i.e. fee sharing with others who have access to clients that the practitioner cannot attract otherwise, or, advertising that is not allowed or the like.

Less classy but common, is underhand payments to providers of work such as estate agents, bond originators and the like, dressed up as entertainment, advertising and so on. This practice is rife as it is cheap, easy and doesn’t require much thought and long-term commitment. This is what one sees most often and occasionally our law societies make a half-hearted attempt to fight this: I once sought conveyancing work from a national franchise which was then a client of mine for other purposes. I was invited to a meeting and found there the chairman of that province’s ethics committee to assuage my concerns. The cost of five instructions per month was a capital payment (assisting the promotion of a new branch) plus a payment of a part of the conveyancing fee for every transfer on an ongoing basis. A great arrangement; everyone wins and the patina of blessing from the local Law Society on top. When your, using the above example, estate agency, in contravention of its own ethics, insists that you use conveyancers that it recommends, you may well find that such an arrangement underlies its recommendation.

Attorneys love the sheen of probity; many would never dream of stealing trust money; but when it comes to business, few holds are barred.

Yes, nice guys do finish last.

Contributed by:
Daan Steenkamp Attorneys