When discussing the common snags in the legal process that result in delays and rising costs, James explained that Newmanor was set up to give clients predictable and clear fees that would not be deviated from.
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“You know exactly where you are, regardless of how long it takes or any other pitfalls that might happen,” he said.
“Unfortunately, most of the legal profession at the moment is still charging by the hour,” he claimed, with quotes usually subjected to various caveats. “Often the price can end up being higher later on.”
While Newmanor mostly acts for lenders, it has seen the fee “edge up” further down the road for borrowers.
James is of the opinion that this is unfair on developers. “If, as lawyers, we can’t anticipate what our costs are going to be, how can the client possibly know?”
“I am hoping that those that are still charging by the hour will come round to the idea that it’s much better to be fixed and accept that we’ve got a bit of risk to take, but can control it because we know what we do.”
He also stressed the importance of understanding what each set of lawyers is mandated to do on a transaction, so that tasks are only covered once.
“That way, you optimise the cost because you don’t have anyone doing the same thing twice,” he shared, adding that this is why the title report from the borrower’s lawyer will often be used by the lender’s solicitor to avoid doubling up on investigations.
Collateral warrantees can also be shared to keep the costs down, he stated. “There’s no need to reinvent the wheel.”
He also emphasised that it’s easier and more cost effective to do the process in one go. “If you think it’s a five-week job, doing that sprint in five weeks is much more efficient than stopping and starting over three or four months as a result of various things [not coming to fruition], and therefore having to put your tools down and wait for a bit. It then gets more expensive because people have to figure out where they were.”
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