Why free legals can end up being a horror show

Every few months I find myself concerned with one such issue – and I believe most mortgage advisers have to deal with the same thing – and that is ‘free legals’. Let’s begin by acknowledging that not all lenders treat ‘free legals’ the same way and there are a number of conveyancing firms who do manage to marry up the resource/service with the ‘cheaper’ cost, but it’s a marriage of convenience rather than one based on love, and too often it ends in acrimony.

I read recently of some anecdotal evidence from advisers where the ‘free legal’ offering had been taken only to find that the remortgage deadline was missed, on not just one but two separate occasions. Try telling that to the client – a tricky conversation if ever I’ve come across one, and might well precipitate a conversation between both which involved the question, “Why did you allow me to go down this conveyancing route?” or words to that effect.

The problem of course is sometimes out of the adviser’s hands – mention the word ‘free’ to a client and you are effectively placing yourself as a hostage to fortune. Even if there is a cashback option and you push the case vociferously for using this and them choosing their own conveyancer, the client can sometimes be way beyond this advice, fixated on the ‘free’ rather than the service element.

Advisers can often be caught between two stools here – you can’t not mention the free option, and you know that there will be some cases which go through the process very nicely indeed, with no problems, delivering on time and producing a very happy client. However, you also know that some ‘free legal’ cases – particularly those that we might deem non-standard – can get away from all concerned and end up being a horror show, particularly for the client who might well never darken your door again.

I’m reminded of a survey announced by AMI earlier in the year which surveyed the broker profession with eight out of 10 saying that the ‘free legal’ service their clients received was worse than that which they’d get from their own conveyancer. That appears to me to be a deal breaker when it comes to giving your clients the right advice in this area, but we know that ‘free legals’ can work for lenders, occasionally for the client, potentially for the conveyancer, but perhaps never really for the adviser.

Does this mean all advisers are going to recommend their clients choose their own firm? Probably not. Does this mean that ‘free legals’ are suddenly not going to be an option from lenders? Undoubtedly not, unless the bad publicity starts to impact on the lender, as happened with Nationwide last year. Will the client still be overwhelmed by the ‘free’ option rather than ‘service? Of course.

But, where possible, what advisers can do is make the options clear as crystal for the client? Spell out the potential issues that can arise. Give examples of where ‘free legals’ were far more trouble than they were worth? And, if it’s available, show that taking the cashback, spending it on their own firm, and gaining more control, is much more likely to give them the result they want, within the timescale they need. Not all will opt for it, but you can sleep easy at night knowing you’ve done all you can, and where your advice is taken, you’ll not only earn income, but give everyone the chance of a much less stressful experience.