Brian D. Kwan 
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Customer Service is Declining - Law Firm edition

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This entry was posted on 8/24/2007 6:26 PM and is filed under Real Estate,General.

So it's been a while since I've written here. It's been a really busy summer with many closings around town, so I haven't had the chance to write here. I've had many things that I've wanted to write about, but between work and summer events, I haven't had the chance to write here. Maybe I need a UMPC so I can write things while out. Over the next few weeks, I'll write about all the things that I wanted to write about, except for the things that have been resolved or have expired in relevance.

The first thing that I want to write about is the cause of most of my time away from the blog: Closings and other firms. In my last article, I had written about how customer service was declining. It appears that this effect is carrying over to many other law firms.

As a lawyer, there will inevitably be disputes on any transaction. Some are minor (timing of delivery of closing packages) and some are major (issues related to undischarged mortgages). But some are just a waste of time.

A recent example of a "waste of time dispute" occurred a little while ago this summer when I was attempting to close a transaction in which I only had 5 business days to complete (note: If you care about your transaction, do not attempt this on your own or with your real estate lawyer and yes, there was an extra charge for it). The home was a new one being purchased directly from the developer. As is ordinary course, I requested a closing package from the developer's solicitor so that I could have my clients sign all the documentation and deliver the correct sum of money to them.

Later that day, I received a letter from the other solicitor advising that they had already provided it to another lawyer and that it was apparently my client's responsibility to obtain it from the other solicitor. I wrote a fax to the other solicitor asking him to fax us the documents, but didn't receive a timely reply. I spoke the other solicitor, who, through less than eloquent means, demanded that I send him another fax requesting the package and pay him over $1,000 for the release of the file. My client advised me that the other solicitor had never been retained by him but had been appointed by another mortgage broker he had gone to before that wasn't looking out for his interests. After the broker refused to follow through on a mortgage for him (because he did not want to take the second mortgage offered), the other solicitor decided to attempt to cash in. My client told me that no work was actually done on the file, so he didn't feel that the outstanding amount was justified.

My client felt that going to the developer directly was his best chance at getting another package. He traveled to developer's sales office where they instructed their solicitors to issue a new package to me. The solicitors then sent me a fax, in what may be considered an unprofessional tone and manner, that they would not be forwarding me a new package and that my client was to obtain it from his previous solicitor. Eventually, after my client made a scene at the developer's solicitors' offices, they agreed to provide me with a new package for a fee, which my client was happy to pay. The transaction then proceeded to close.

What really got me upset with this deal wasn't so much the other solicitor demanding that his final bill be paid out (although I felt he could have made his point in a better way), but by the borderline unethical behaviour of the developer's solicitors. My client wanted to close and the developer wanted to close, and all I needed were their form of documents to sign. They assembled the package in less than 20 minutes. Frankly, I believe that they may have breached professional ethics since the Rules of Professional Conduct that lawyers are required to abide by require some level of reasonableness. I don't consider what they've done very reasonable. My client was prepared to put more money in their client's pocket, but they would rather fight and not close the deal.

It still perplexes me as to why these developers insist on using these firms. When I was in my final year of law school, I did interview for an entry level position with the developer's solicitors' office, but felt that we had a difference in philosophy. I believed that if everybody wanted the deal to close, it's the lawyer's job to help facilitate that while at the same time ensuring that the client is getting what s/he had bargained for. They didn't seem to believe that: The impression I was left with was that they didn't care if the deal closed; as long as they made their money, they were happy.

Some of the best lawyers I've known are sole practioners who would love to have the opportunity to work for a developer doing development and land use. Why developers choose firms that don't want to close, lead them into potential litigation and have lawyers that talk well but don't really share their underlying beliefs is beyond me.

I think that my client said it best when thanking me for my work on the closing: "The old lawyer (his first) just cared about money. The developer's lawyers are too big and don't care about you. But you really care and are working hard to help me. The other two guys remind me of how things were done in the old country (one in Eastern Europe)."

Developers are used to taking risks. Why not try something different and go with a sole practioner? Although I'd like it to be me, there are many out there who can do great work for them.

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