Last week my partner’s brother offered up some fair commentary; if we specialize in too many practice areas, our firm will be less attractive to potential clients seeking a law firm to assist them with a specific service.  The example I was given was that if he were looking to buy or sell a home, he would do some Google searches and look for a law firm that focuses specifically on residential real estate.  Under his example, our firm’s website would turn him off because we offer other services besides residential real estate.  At the same time, I was dealing with one of these “boutique” real estate law firms on behalf of a client and was reminded of how wrong my partner’s brother had been.

When I learned the practice of real estate law at Norton Rose Fulbright Canada LLP’s Toronto office I worked with two senior real estate lawyers who were as expert in the practice as I am striving to become.  Together, the three of us worked with two real estate law clerks that were incredibly gifted as well.  Our team handled complex commercial real estate projects as well as niche items such as renewable energy leases and mining tenure.  Though as a rule, our firm did not engage in residential real estate matters, occasionally we would handle some files for valued clients (or partners).  As the junior lawyer on the team, I was asked to take care of these residential real estate transactions and learned how they ought to be conducted, and the level of service and lawyer involvement required.

Back to the “boutique” real estate law firm I found myself dealing with last week.  This is a fairly well-known law firm which handles only residential real estate.  For their clients’ convenience, they have somewhere between 5 and 10 offices scattered around the Greater Toronto Area and offer services in a multitude of languages.  There is one lawyer overseeing these offices which are presumably staffed by real estate law clerks and assistants.  Ironically, within the real estate law bar, we have a nickname for firms such as this one – a sweatshop.  This is meant to convey the fact that the offices work on the principle that profit is made only by volume of deals processed, and as such clerks staffing these offices are expected to churn out deal after deal as quickly as possible.

I had been asked by a client to take over for this firm on a condominium closing which was coming up in a few days.  I had a discussion with my client about what would be involved and asked them to instruct the firm to send my office copies of all of their files so that I might continue the work that they had done to that point.  This was six days prior to the scheduled closing.  It took four days before there was a response and at that point a clerk emailed me a copy of one letter, received from the other party’s lawyers.  I asked whether their office had sent a Letter of Requisitions (a letter from the purchaser’s lawyers to the vendor’s setting out everything which they require prior to closing the transaction) because the deadline had passed.  I was shocked to learn that they had not.  This is something very important for any real estate lawyer to do.  I emailed the clerk back (the sole lawyer responsible for this office is careful not to have his own email address listed anywhere) and asked her to provide me with a copy of the Agreement of Purchase and Sale so that I could review certain provisions and explained that the closing was scheduled for the following day and that it was important. Nothing.  Several hours later I sent another email stressing the importance of the matter and the clerk shot back a one line email instructing me to get the agreement from my client. Thanks.

Besides being incredibly prejudicial to former clients of her firm, the clerk’s conduct was incredibly rude in what is normally a very cordial bar of lawyers.  Residential real estate lawyers know each other.  We deal with the same people time and time again.  I could never imagine behaving so disgustingly to a colleague of the bar.  I had already heard of this firm’s reputation and this short-sighted clerk confirmed it.

All of this left me thinking about the great gap in what the public perceives as specialty and what insiders know to be the case.  These residential real estate law firms provide sub-par service to their clients.  Imagine one lawyer who oversees close to ten offices.  Assume that each of these offices (to be profitable) are dealing with 30-60 transactions a month (sometimes more).  How can one lawyer possibly review all of the work being conducted.  It is physically impossible for that lawyer to have the level of involvement necessary to properly serve their client (or the level required by the Law Society of Upper Canada).  This is solicitor negligence and it happens on a daily basis throughout the GTA by irresponsible lawyers hopeful that nothing serious ever comes up that would expose their practices.

Part of the blame may rest with clients who continue to demand lower fees for the same basic services.  Since the 1980s the cost of the average home in Toronto has more than doubled while the average price real estate lawyers charge for closings has dropped almost by half.  For the prices that have become the norm, it is becoming ever-more difficult for lawyers to provide the level of service necessary to properly carry their files.  I wonder how it is that the general public have in the last few years come down with scathing rebukes of lawyers and the law society for all manner of conduct perceived to be unjust but no one ever discusses a level of legal service that is accessed by at least half of the population.  I believe that the law society should find an effective way of dealing with these real estate law sweatshops, ensuring they put more emphasis on client service than profit.  The public at large should demand that they do so.