The Malaysian Bar's recent resolution to increase the legal fees for conveyancing matters has raised the question as to who will benefit the most from it.

At its annual general meeting last Saturday, the 11,000-member Bar adopted the resolution to increase the scale fees for conveyancing matters and reaffirmed a statutory prohibition against lawyers giving 'discounts'.

The Bar argued that there will only be a nominal hike which will come into effect after the Solicitors' Remuneration Order is amended upon the approval of the Bar's Solicitors Costs Committee chaired by the Chief Justice.

However, a consumer group said the increase would pose a double jeopardy to clients.

ERA Consumer secretary-general T Indrani said any increase would further burden consumers who already have to deal with steep legal fees, mainly in relation to sale and purchase agreements (S&P) for properties.

"The reality is, not everyone is on an equal footing. If the smaller firms can benefit by offering discounts, then the consumers also stand to benefit," she said.

"This is, of course, must be done without compromising the quality of service."

The AGM gave the Bar Council a fresh mandate to strictly enforce the 'no discounts' rule on lawyers. Details of how the rule is going to be enforced will be determined at a Council meeting on April 17

Best deal

Indrani said smaller firms generally offer more personal service compared to large law firms.

"In the big firms, clients are usually met by conveyancing clerks whereas at the smaller ones, the lawyers themselves meet clients, as they are either a sole proprietorship or a partnership of two or three lawyers only," she said.

"At the end of the day, it is all about surviving in the market by offering the best deal to consumers. We must remember that a discounted fee does not always mean a compromised service."

Indrani said that, since the larger law firms handled the bulk of conveyancing matters, not everything should be left to market forces.

"The smaller firms offer a straightforward discount while the larger firms do the same but in a different way.

"They claim to waive the legal fees when it is already actually included in the S&P. In effect, they are giving buyers a false sense of a good bargain, although this could lead to hiking up the house price."

Indrani said some real estate agents and banks were not averse to using persuasive means to get house buyers to use their own panel of lawyers in order to qualify for the legal fee waiver.

A 'fallacy'

Newly-elected Bar Council vice-chairperson, Yeo Yang Poh, explained that the rationale behind the resolution was "to prevent under-cutting".

"Competition should be based on quality and not solely on a price war. It is difficult for the public to discern the quality of service in non-contentious conveyancing matters," he argued.

He justified the increase in the scale fees for conveyancing as "a correct price to pay for the protection of rights and interests".

"The additional cost will be small compared to the stamp duty and value of the property," he said.

To illustrate his point, Yeo said the stamp duty for a property worth RM500,000 would be around RM9,000 while the legal fee would be about RM3,000.

He explained that the cost of providing legal services is much harder to quantify.

"A lot depends on the time spent by the lawyer, his or her knowledge, experience and care that goes into the case. A lower cost would inevitably mean a lower standard of service."

Yeo stressed that it was a fallacy to describe conveyancing work as merely 'filling in the blanks' and that it was a common misconception that conveyancing matters require only minimal work.