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Supporting the local economy

I have long been an advocate of supporting local business where possible. This is often easier to say than to put into practice. We can all be guilty of paying lip service to the idea; browsing in John Lewis or Waterstones and then ordering something on line (Amazon!) to save a few pounds.

If as I do you both live and work in a small town, in my case Great Yarmouth, then keeping your business local has a greater importance than if you lived in say London or even Norwich. You don’t need a degree in economics to recognise than towns such as ours struggle in the present economic climate. Not only have we to put up with the general recessionary headwinds, but the drop in the price of oil coupled with the north sea oil and gas resources running down has lead to numbers of off-shore companies both laying-off staff and switching their operations elsewhere, often to Aberdeen. These prospects for a revival look bleak, with the cost of oil extraction now being more than it costs to extract shale oil in the US.

As a lawyer you might expect that I would be particularly concerned at the impact on legal firms, and you would be right. Like many professions, there are huge challenges to be met, such as competition on price from on-line conveyancer and probate companies. These of course are fairly common across the whole profession and not unique to the east coast. Small firms of solicitors (or accountants for that matter) cannot necessarily compete directly on price with some of these new providers. Where they do attempt to compete is on the quality of their service; being local is itself a selling point. Many clients like to meet their solicitor or accountant, to look them in the eye and to be able to drop in when needed. People in general, but academics and politicians in particular talk often about access to justice without really defining what that means on the ground. For many, it means what I have described, namely physical accessibility of the professionals’ offices and the professionals themselves.

How disappointing it is therefore to find businesses that, when it suits them, talk about supporting other local businesses and the community whilst at the same time farming their professional work out to Norwich or indeed beyond. The hypocrisy here is really quite nauseating.

On the legal front, some of the worst offenders are certain of the estate agents. I really don’t apologise for singling out this profession, as their approach has probably the most direct impact on those solicitors firms which provide conveyancing service. Straight away I should say that there are some very notable firms that ensure that they recommend local solicitors. Others however, lured by the prospect of referral fees, do their best to divert buyers and sellers from their own solicitors and from the town, sending the business to Norwich or even further afield.

This has nothing to do with the quality of the work or the interest of buyer or seller. It has everything to do with money. The arrangement is that each time an agent manages to send a client to say a Norwich firm they receive a “referral fee” (when I qualified they were called “back-handers”!). This fee can be several £100s. This gravy train has of course to be funded somehow, by some means. There are only two possibilities: either the solicitor pays and therefore has to provide a cut price service using cut price staff or alternatively and equally commonly the fees the client pays to the solicitor end up being more than they would have paid their local firm. The difference makes its way back to the agent.

Next time you buy or sell, think carefully when the agent recommends you to a firm of solicitors miles away who you may never have heard of and who you will never meet in person. Ask yourself whether this recommendation is being made out of concern for your interests or those of the agent. Then decide whether you should be contributing to the economy of your home town or someone else’s!

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