Real estate lawyers raise red flag on soaring transaction fees

0

TORONTO, Feb. 1, 2021 – Real estate lawyers are facing the prospect of soaring costs that will be passed onto their customers amid a consolidation trend that is disrupting the legal software industry.

Real estate lawyers and their consumer clients can expect transaction costs to rise as the number of software providers in Canada declines. The recent acquisition by Dye and Durham of DoProcess, one of Canada’s leading providers of real-estate practice software, is a case in point, says veteran real-estate lawyer Maurizio Romanin, president of Toronto-based software company LawyerDoneDeal (LDD).

“We have been inundated with inquiries and new subscription requests by unhappy lawyers who are alarmed by the fact that they will face a significant jump in their per-transaction software costs and the impact this will have on fees in an increasingly competitive marketplace,” says Romanin. “What we are hearing personally and witnessing online in reaction reflects an unmistakable level of dismay and anger.”

The recent D&D acquisition will see transaction fees ultimately borne by the consumer jump to $129 from $25 – a 500% increase. The rising cost of software services amid consolidation, however, will also have a significant impact on what consumers ultimately pay when buying or selling real estate.

Romanin warns that legal firms should tread carefully in choosing their software service providers as costs rise. They should also ensure that they can take confidential client data with them if they choose to switch providers, a significant issue many lawyers are now facing. Consumers, he adds, should be vigilant and query their legal professionals to justify disbursements being passed through to them.

“Costs to legal firms and their clients will continue to rise as consolidation among big players continues and our advice is to be very clear on what you are paying for and why. Don’t hesitate to push back on rising costs and fees,” Romanin says.

“We process among the highest volume of residential real-estate closings in Ontario and we are dedicated to providing value in the services we deliver,” says Toronto real estate lawyer Stephen Shub, “but consolidation will continue to have an impact on the industry’s options and costs – and the value we can bring to clients as their transaction fees rise. We use LawyerDoneDeal’s web-based application RealtiWEB and believe it is a superior product to what is offered by D&D.”

“Hiking up software costs and fees charged to consumers is completely unwarranted in today’s marketplace,” says Toronto lawyer Bob Aaron of law firm Aaron and Aaron. “Independent players, such as LawyerDoneDeal, tend to be more in tune with the needs of our profession, offering what I believe to be the gold standard in real estate conveyancing software. That’s opposed to consolidators such as D&D who pursue monopolistic agendas without any impetus for innovation in their software.”

(SOURCE Lawyer Done Deal)