Lenders instructions to solicitors and licensed conveyancers have become more complex and onerous.

Whilst some changes may benefit the profession (eg fraud prevention), in other instances, the pendulum has swung too far.Legal fees in relation to the mortgage work could justifiably be increased to achieve more realistic conveyancing charges.THE LENDERS REQUIREMENTSThe author has recently analysed, on behalf of the Law Society, instructions to solicitors from a sample of 25 different lenders active in the domestic conveyancing market.The challenge in bringing instructions into a uniform format for comparison mirrored, in microcosm, difficulties which busy practitioners experience processing the wide range of requirements from over one hundred lenders.

Lenders use a variety of procedures, instructions are set out in different orders; some are helpfully indexed, others are not, and instructions can range from being minimalist to being copious in detail.In the analysed cases, some instructions are so detailed that time spent by the conscientious practitioner studying and carrying out their requirements in full must be out of all proportion to the level of fees charged (or not charged) for the mortgage work.DDITIONS TO CORE INSTRUCTIONSIn recent years there have been many additions to the core instruction to handle the legal side of the mortgage.

These may be in response to judicial decisions, the development of fraud prevention measures, the lenders experience and a range of other reasons.

Examples are too numerous to be incorporated in an exhaustive list but include:-- checking the identity and bona fides of parties to the transaction and their legal advisers;-- checking mortgage application and mortgage offer details;-- obtaining a waiver of confidentiality;-- checking valuers' assumptions;-- more detailed investigation into the adequacy of planning and building regulation consents;-- advising lenders if borrowers are not raising the balance of the purchase price out of their own funds;-- verifying intentions for occupation of the property and obtaining waivers;-- ensuring consents are 'informed';-- reporting sub-sales and transactions at an undervalue; and-- complying with anti-fraud and anti-money laundering guidelines.The additional requirements mean it is more time consuming to absorb and carry out requirements and that acting on a mortgage places on solicitors more diversity and complexity, greater responsibility and a higher level of risk.

This understandably concerns practitioners.It may exploit the extensive professional indemnity insurance/compensation cover available for solicitors whilst other advisers seek to disclaim or limit responsibility.

It feeds the debate about potential conflicts of interest.It also means a traditionally low charge for the mortgage element is inadequate for the work involved.UNACCEPTABLE RISKConcern has been expressed that solicitors are now being asked to certify matters or perform tasks in such a way that they are pushed beyond acceptable levels of risk for practitioners exercising due care and attention in a normal domestic conveyancing transaction.

This is sometimes a matter of degree.Whilst some lenders word instructions in a reasonable way, others could well have the effect of throwing an unreasonable burden of responsibility for future losses suffered by a borrower.In some cases, requirements are so far reaching that it is difficult to see how the title can be certified on the lenders standard form without exposing the firm to unacceptable levels of risk.

No doubt these instructions have been carefully drafted by lawyers, to provide maximum protection to their clients, but the burden placed in time, level of exposure and specialist expertise may need careful consideration, given that solicitors are not usually free nor do they have time to negotiate terms, on each occasion.A balance needs to be drawn between protecting the lender client and placing an acceptable level of responsibility and risk on the solicitor acting in the transaction itself.CONFLICT OF INTERESTIn the writer's view, it is not a new development that borrowers and lenders are both clients when a solicitor acts in the conveyancing and mortgage.

The potential for conflict has always been present, but lenders' recent requirements may crystalize the issues (eg requesting a waiver to enable solicitors to disclose to lenders information received whilst acting for borrowers, or to forward the file to lenders on request).Equally, it is appropriate that many lenders now insist on solicitors recommending that third parties to the transaction ( eg guarantors or occupiers) receive independent legal advice.

The debate therefore may centre on clarifying:-- categories of information that should or should not be disclosed;-- whether there should be separate files for the respective clients and, if so, the contents that should be in each file;-- if a third party declines to seek independent advice, whether solicitors acting for a borrower should witness a third party signature, write to that party underlining the need for separate advice or take other steps to ensure consent is informed;-- that a solicitor is free to give independent advice, in relation to a mortgage, notwithstanding that advice may encourage a borrower to seek an alternative source of finance.ARE CHARGES TOO LOW?Quite apart from the rigorous requirements of some lenders, the length, complexity and different forms of instruction increase the dangers of corner-cutting that may be tempting to the practitioner operating on a low fee.

Practitioners may find it instrumental to run a time check on conveyancing transactions to see how well a thorough job is reflected in the charges levied if an acceptable level of profit is to be achieved.The Law Society booklet 'The expense of time' gives helpful advice on how to make such a calculation.

If charges do not provide a proper return for a job well done, a response to cut corners is a disservice both to clients and to the profession.

Is it instead time to review conveyancing fees and to make a realistic charge for the mortgage aspect of the transaction?The Woolwich Building Society 1993 survey revealed that legal fees for conveyancing in the UK were then the lowest in Europe.

Since that time, according to the Law Society research and policy planning unit, the trend for falling average conveyancing prices has continued.Solicitors fees are now a small proportion of the cost of buying and selling a house.

They are typically far lower than estate agents fees, and even compare favourably to removal fees, although both estate agents and removal firms also face fierce competition.It is unfortunate that some clients group stamp duty, HM Land Registry fees, search fees and other disbursements in with the legal fees.

The reality is that many firms charge very low fees for a sometimes complex and under-estimated legal service.

However, solicitors still carry an image that their services are expensive (justifiably in some cases) and it is a challenge to find how charges can be raised to a more realistic level, without losing clients and/or good public relations.UNDERCUTTING FOR COMPETITIVE ADVANTAGE?Some firms consider that competitive advantage and increased market share may be gained, or preserved, by undercutting the fees charged by other firms.

This is based on the premise that clients are driven by price, particularly at a time when there are so many outgoings associated with a house purchase.Firms compete for market share and create a downward spiral of fees.

It is, however, difficult to see that cut-priced conveyancing is either commercially viable or sustainable as a long term strategy.

It is an understandable short-term reaction to real pressures, but strategic approach with a better longer term prognosis must surely be to meet clients needs for a quality service, take advantage of technological developments, train staff effectively, and ensure overheads are controlled.DO CLIENTS SELECT SOLICITORS ON PRICE ALONE?Furthermore, recent research by the Law Society's research and policy planning unit (study No 17, 'Client perceptions') reporte d that only about one quarter of clients shop around for price.

The other three quarters claim they return to firms they have used before or that are recommended by friends or relatives.These clients also report it is not only cost that influences their decision.

Telephone manner, for instance, can be seen as a barometer to gauge the service they are (or are not) about to receive.It may be that some clients do not wish to be seen to base decisions only on price and respond accordingly in a survey.

However, the findings are consistent with conventional marketing wisdom.The decision to buy arises from wider considerations of the marketing mix, incorporating all four 'p's -- price, place product and promotion -- the benefits sought (eg quality of service, good personal relations and clear communication) and the overall service in providing the client with a satisfactory outcome.

It may therefore be that firms will lose some clients to lower quotes elsewhere.However, a professional good quality service at a reasonably competitive price will generate business and be a good marketing tool especially as good practice management standards are promoted.

Conversely, the cheapest service will soon be seen to be just that, if it is not underpinned by good working systems and practices that meet the other needs sought by clients.GOOD SYSTEMS AND WORKINGThe need for good, workable systems is emphasised by the Solicitors Indemnity Fund.

According to its last annual report (seventh annual report, 1994) approximately 50% in value of settled negligence claims arose from conveyancing transactions.There may be several reasons for this, eg the number of solicitors handling conveyancing and the generally high value of a conveyancing transactions, but whatever the background, most claims for professional negligence arise from simple and obvious errors which could be prevented by effective working systems and practices, good personal organisation and constructive and informative communication with clients.SUMMARYThe profession is in the midst of major change.

Few firms can be immune to the challenges of increased competition, over supply, client mobility, a readiness to complain, technological advances, changes in the nature of available work and the ways services are delivered.Many respond by reappraising the firm's structure, size, management expertise, positioning in the market, services offered, systems used, internal culture cultivated and relations with clients.

Some of the changes are driven internally, but many arise from changes in the external environment.Whatever the driving forces, survival may depend upon firms becoming more responsive and flexible, whilst providing an efficient, quality service that clients have a right to expect, underpinned by good systems and working practice.In the longer term, such a service can only be provided if:-- demands and expectations placed upon firms by lenders and others are sustainable;-- firms play their part in adapting for the future; and-- they are adequately rewarded for the work they do.The public relations exercise is a delicate one, but unless realistic expectations and profitable pricing levels are achieved the future for domestic conveyancing and for many firms that rely on it, may be bleak indeed.