Canadian Lawyer

One lawyer planning to phase out small claims matters said: "Clients are advised to handle the matter directly and to use us as a resource. The files are assigned to the most junior available if the client insists on having us act." But residential real estate was by far the area firms were most likely to say they were phasing out or had already eliminated. One respondent blamed time-consuming regulatory burdens for "making it increasingly undesirable to practise residential real estate," calling new certification requirements "insulting." The most common reasons for phasing out residential real estate included low profit margins and the high volumes required. Tim Kennedy, vice chairman of the Canadian Bar Association's real property section, says residential real estate fees have seen little change since the late 1970s. "It would appear that the rates charged for residential transactions with mortgages seem to be, from coast-to-coast, consistent at around $950. That's been the rate for a considerable period of time, so the fees being charged haven't necessarily increased in line with the cost of living." In the industry there's widely felt to be a "ceiling" in clients' minds as to what they're willing to pay for residential real estate services, he says. However, he suggests many clients may in fact be willing to pay higher fees, given the amount of cash they are already investing in a property and the personal, intensive nature of the legal work. "It's not just preparing papers," he says. "There's a lot of handholding and advice given." But the Legal Fees Survey suggests, if anything, fees are head- ing in the opposite direction. Firms with up to four lawyers last year charged $927 on average for residential real estate purchase, but $836 this year. Residential real estate sale fees have sunk to $669, from $743, while residential real estate sale and purchase fees are $1,360 on average, compared with last year's $1,505. Low margins and the relatively paltry revenue generated by most individual clients may make real estate a particularly unattractive area for larger firms paring down the range of services they offer, says Kennedy. "If you're a very big firm, you're not interested in opening files that will bring in $1,000, you'd rather do the $40,000 transactions." Some smaller firms, on the other hand, are choosing to specialize in real estate, taking advantage of technological developments that are helping to bring overheads down, such as electronic registration. Is the high volume, low cost nature of these practices suppressing fees? Alibhai says: "Certain law firms are very factory-like and just churn out real estate. That's their practice area." This is driving competition, keeping fees low, and could be behind the decision of some smaller, generalist firms to exit the market, she adds. But several respondents commented that residential real estate was still a way of bringing in other work. One said: "Property law margin of profit is decreasing but it still makes up a considerable portion of our earnings so we do not plan to phase it out. We consider it a service to our clients in general, who will then use other services that are more profitable." AVERAGE 2013 NATIONAL FEE RANGES (sample = 179) MINIMUM MAXIMUM civil action up to trial (2 days) Civil civil action up to trial (5 days) Litigation civil action up to trial (7 days) civil action appeal only 18,420 31,145 42,271 17,446 13,561 23,083 38,296 12,333 37,229 79,750 124,574 36,750 secured financing agreement 6,677 949 3,446 3,772 715 1,867 13,291 1,324 6,200 3,264 923 3,693 2,361 577 2,957 5,674 1,710 6,773 1,043 9,989 1,984 2,221 801 5,743 1,180 1,359 1,608 33,881 5,591 6,211 1,680 2,179 2,750 1,036 2,091 2,795 2,818 3,818 5,292 3,085 1,718 3,250 2,793 1,410 1,333 5,857 4,369 8,750 841 675 1,383 2,250 1,901 703 580 1,133 1,491 951 1,494 1,144 2,040 7,830 3,329 361 782 1,066 165 253 2,452 295 535 764 123 2,464 1,393 513 1,308 1,786 243 324 6,187 Corporate simple, small business incorporation simple prospectus summary criminal offence (one day trial) Criminal Bail hearing criminal offence (one day trial) uncontested divorce contested divorce Family separation agreement child custody and support agreement Work permit Immigration spousal sponsorship skilled worker application simple patent application Intellectual simple trademark registration Property Patent audit residential real estate purchase residential real estate sale Real residential real estate sale and purchase Estate commercial property purchase commercial lease agreement simple will complex will (individual) Wills and complex will (couple) Estates Power of attorney (individual) Power of attorney (couple) Probate 36 June 2013 www.CANADIAN L a w ye r m a g . c o m

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