What impact has the Law Society's Conveyancing Quality Scheme (CQS) had on Local Conveyancing Solicitors?
Aimed at driving up standards in the profession and providing the public with an guaranteed standard of service, CQS take-up seems slower than anticipated. With lenders becoming ever more picky about which law firms they will accept, will high street Conveyancing Solicitors without CQS accreditation soon be unable to offer Conveyancing services?
Reportedly, around 1, 300 firms have applied for accreditation as at the end of September, of which some 650 had already been approved. But this seems to be a very low proportion of the law firms which currently handle Conveyancing work.
Land Registry data highlights the issue
Land Registry figures confirm that they received applications for property transfers or other transactions from some 6, 200 firms during September. Many were from non-Solicitor companies and Licensed Conveyancers who would not be eligible to join the scheme. But even taking that into account does leave a large number of Conveyancing Solicitors who have apparently not yet even applied to join the CQS scheme.
Does that mean that these firms do not consider it worth the expense and effort? Or do they believe that it won't make any difference to them, and that membership isn't a prerequisite for long-term survival?
Mortgage Lender Crackdown
Being able to act for mortgage lenders is essential for most Conveyancing Solicitors, so firms need to be accepted on many lenders' solicitor panels. But mortgage providers have drastically pruned their panels over the last year or so, leading to many Conveyancing Solicitors to find that major players will no longer instruct them on mortgage work. That leads to difficulties in retaining clients, who sensibly prefer to instruct firms which can act both for them and and their lender.
The Council of Mortgage Lenders has also sent a very strong message to the Conveyancing profession saying that it must get its house in order. Increasing levels of fraud and incompetence have lead to many mortgage lenders suffering substantial losses. Michael Coogan, the outgoing Director General of the Council, said earlier this year that “CQS is the last chance saloon for the profession. ”
The indications are that firms who are not accredited are going to find it difficult and perhaps impossible to remain on lenders' solicitor panels.
Are small-scale Conveyancing Solcitors facing a 'perfect storm'?
In 2012, high street Conveyancers will also start to encounter increased competition from companies operating as 'alternative business structures' (ABSs). Such companies are likely to be canny and market-oriented, and being commercially backed, they will have funds to mount substantial advertising campaigns to attract customers.
As the housing market shrinks, competition for Conveyancing work increases, and slow, more traditional, or simply small firms will find it difficult to compete. There is a strong likelihood that those Conveyancing Solicitors who choose not to apply for CQS will find themselves squeezed out of the market altogether.
UPDATE: see our article on the impact of the new HSBC Conveyancing Panel established in January 2012.