As trust and estate practitioners reconsider traditional business models and charging structures, leading providers reveal their approaches to providing clients with value for money
Ian Bond, Head of Wills, Trusts and Probate, The Co-operative Legal Services
Co-operative way of working
The Co-operative Legal Services is considered by many to be one of the front-runners in the drive to broaden the supply base for legal services. It is part of a £10 billion Co-operative family of businesses, with funeral, food retail, travel and pharmacy as well as financial services including insurance and banking. There are 20 million customers of The Co-operative all of whom are potential customers for our related legal services.
We recognise that solicitors are the experts when it comes to probate services and have already recruited a dozen specialist probate solicitors with more to come.
Our view is that the law firms that will thrive will be those that identify their market and revolutionise the way they manage customer relationships. They will have to adapt to the demands of the changing market and become customer-service orientated.
Our own research into what the public wants in terms of legal service providers when dealing with the administration of an estate tells us that customers don’t want to wait five days for a letter or be charged for it. They expect communication by e-mail, text message, or mobile phone.
We are dedicated to widening and easing public access to legal provision and offer a welcome alternative to that traditional view of law firms and solicitors. For example, we avoid using legal jargon, providing straightforward expert advice for all our customers’ legal needs, with dedicated personal advisors who are responsible for individual cases.
Most importantly, we offer fixed fees for the work we do. We adhere to the principle of openness, honesty and transparency, which is why we always clarify our costs for the work involved, based upon the complexity of the estate, before any work commences. This way the customer knows upfront how much everything will cost.
We don’t charge by the hour nor do we take a fixed percentage of the value of the estate. Charges based on the value of the estate are inherently unfair, penalising wealthy estates. Charging by the hour and for correspondence by letter, email or telephone also runs the risk of uncapped costs escalating out of control and the customer not knowing what they will pay until the end of the matter.
We recognise that on rare occasions an estate can have a nasty surprise up its sleeve. The classic example is to trace a missing beneficiary. Without the help of expert genealogists such as Title Research, the administration of an estate can grind to a halt. In such cases, we take advice from the experts and seek a pricing mechanism to reflect the work involved in concluding matter.
This area requires investigation into the unknown so that it can be difficult to provide a fixed fee. In such circumstances, an agreed working budget based on expert third party advice is sought. We put that budget and recommendations to our customers, which they agree before the commencement of any work. All expert third party providers that we work with have to comply with The Co-operative’s core principles and values to ensure that the customer gets the best possible service at all times.
That is why a charge based on a detailed analysis of the work that is to be carried out on each individual case either as a fixed fee, or within an agreed capped budget for complex cases, has to be best practice for our customers.
Melinda Newbery , The Stokes Partnership
Moving to fixed price
My firm has recently launched a fixed price probate service – but not a fixed price based on a percentage value of the estate, rather a set price based on the work that we expect to do. It is not a "bucket shop" service; we are quoting realistically, and the purpose of it is to retain our share of probate work in a changing market.
Last year, Devon and Somerset Law Society undertook a survey of wills and probate lawyers in the area to form a view of the level of and basis for fees for estate administration. There was a wide range of charging methods, from fixed fees, based on charging a percentage of the value of estate, to hourly rates, to a combination of the two.
Overall 35% of firms who responded were charging an additional value element. There were very few offering fixed fees.
Our experience is that clients are far more likely to shop around nowadays and it is very difficult to justify a value uplift. We find that executors don't necessarily want low-cost, but they do want to know how much they will be charged. We have won work from other law firms where executors have been quoted an hourly rate, with no guidance at all as to how many hours may be involved!
As solicitors, we cannot be complacent and assume that clients will automatically turn to us to deal with these matters. We are no longer simply competing with other solicitors and the banks (where we have had the comfort of being able to tell clients that we are bound to be cheaper!) We are already competing against will-writers and online probate service providers. Most of these appear to charge on a fixed price percentage of value basis, so are not necessarily cheaper than solicitors.
Competition from others is on the way. We face the prospect of big providers gearing up to provide legal services, including the Co-op and RAC. At least one firm of accountants in the West Country is also preparing to offer probate services; they have a big advantage over law firms in that they tend to be in more regular contact with their clients – usually once a year at least.
Perhaps the biggest competition comes from DIY executors. Even where we have spent many years building a relationship with our client, once they die their executors are in charge. They are unlikely to have any loyalty to us, and very often will simply be interested in convenience and cost. A will lodged in the strongroom is no longer a guarantee of probate work.
Our fixed price service is an attempt to overcome that, and is targeted primarily at those DIY executors, who would otherwise just be calling in to our office to collect the will. We not only give them certainty about costs, but also a choice about how much of the work they pay us to do. For example, they might be happy to do the legwork, notifying death and obtaining asset values etc, but simply want help with the more technical paperwork.
Although still early days, we are seeing a good take-up rate. This is work that we would otherwise have lost and it is therefore additional fee income. Our experience enables us to pitch the fixed price fairly accurately, so there is no compromise against what we might have achieved via an hourly rate. It also gives us an opportunity to sell other services, such as property sales, and wills for beneficiaries.
Christine Houghton, Head of Business Development and Marketing, Title Research
Genealogical research charges uncovered
Our practitioner clients tell us time and again that the trend among PRs is to expect value for money when administering estates. This is a concept that fits well with Title Research’s charging structure; we undertake genealogical research only when instructed by practitioners who, in turn, are acting for the PR and in the interests of the estate as a whole.
It works like this. For each telephone and written enquiry we receive from a practitioner, we provide, after speaking with the practitioner, a written assessment of the case based on our understanding of the facts, and an estimated working budget required to complete the research. We explain clearly and transparently our hourly research rates so that the practitioner and PR can judge whether, in their view, value for money has been demonstrated. This practice is not merely to enable PRs and practitioners to differentiate between the different approaches and business models of competing research firms but, additionally, it extols Title Research’s passion for entitlement and fairness.
We have evolved over the years a progressive business model in line with consumer expectations for commercial transparency and value for money. For example, we quote fixed fees for our trust & estate accounting and probate valuation services. Of course, however, we are always honest with our clients when we know, by virtue of our 40+ years’ experience, that a time and disbursements price will be cheaper in any particular situation.
We don’t chase ambulances and to understand why reveals our company’s ethos for fairness and commitment to public responsibility. This is because at the heart of Title Research is a story about entitlement - a story about entitlement resulting from inheritance where every person should receive what he or she is entitled to. We run our business in a way to help to deliver responsible entitlement for families and individuals who find themselves in the inheritance process. Responsible entitlement is about leveraging commercial, moral and social maxims to deliver the correct entitlement outcome for the PR and for the beneficiary, whilst always protecting and maximising an estate's value through:
- responsible and transparent charging for services needed to determine the entitlement
- accountability in delivering value for money
- fulfilling the wishes of the deceased by bringing together assets and people
- counting the human cost of entitlement
- using genealogy to identify beneficiaries
- re-connecting the estate to lost assets to maximise its value
All stakeholders involved in estate administration – practitioners, charities, government departments and agencies, professional and regulatory bodies – have, we believe, a social responsibility to deliver fairness in how estate administration services are charged for. Title Research fulfils this obligation by operating a fair and open fee structure, therefore protecting the most vulnerable in society at a time of family distress. Unfortunately, the probate research industry is currently split in this regard into those companies like Title Research, and those that operate a contingency fee business model (this is where a genealogist charges a significant percentage of a beneficiary’s share rather than charging for time spent -“windfall charging” if you like). We would like to see regulation in probate research to eradicate this two-tier system, so that every person benefits equally and fairly from this country’s inheritance laws. Consumers expect – and have a right to -- fair charging for services as a modern way of doing business. All involved in estate administration have a moral and social obligation to help to deliver it. We think it’s time for change.
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