Approximately five years ago I met with an area director of one of the largest estate agency corporates in the UK, if not Europe. I was asked to approach him because of a certain predicament. He was exceptionally honest and said to me:
“Simon, I have a problem, Head Office want me to find a firm of conveyancers that are going to be able to cope with a high volume, be cheap and provide a great level of service to our client”.
I looked him straight in the eye and pointed out that I felt that he was looking for the impossible to find that holy trinity . I explained that something has to give. Normally it is service. At Fridaysmove we simply were not prepared to go down the cheap as chips road. Incidentally, Fridaysmove still works with the corporate ( and the director who eventually set up his own agency ).
Directors of other law firms, as I can see a couple of responses to my previous article in the Negotiator, may promise that all three can be achieved but I beg to differ.
Since my last article entitled "The death of No Completion, No Fee conveyancing is crucial and nigh" was published in January 09 in the Negotiator three of the largest conveyancing practices in the UK have disappeared. It is not that I know those businesses inside out but I do know that one very astute businessman once advised me that if a business fails it rarely fails due to external factors, but rather due to internal factors.
As far as I am aware all three of those firms offered No Completion, No Fee conveyancing. Whilst I agree that the argument that the market dictates what conveyancing firms should offer and indeed the prices that conveyancing firms should charge, I believe that No Completion, No Fee conveyancing has taken it one step too far. In my opinion “No Completion, No Fee” conveyancing was a marketing gimmick rather than a public demand. In the words of Alan Sugar " Anyone can sell £10 notes for £5 "
I believe that a conveyancing firm should be innovative and indeed some conveyancing firms over the last few years have created very active initiatives both to the public and the estate agents. One only needs to look at the conveyancing firms that have offered free Home Information Packs, Abortive Protection Schemes for estate agents' fee, No Completion, No Fee Home Information Packs. Such conveyancing initiatives have to be based on strong commercial decisions otherwise one will become a casualty in the current recession.
It is worth bearing in mind there is going to be an increased backlash by the banks and professional indemnity insurers with a bringing back into focus the importance of secure management within property law. Over one third of all lawyers negligence claims are in the filed of conveyancing. A significant number of law firms found it very difficult to obtain indemnity insurance prior to the October 08 deadline and there is every reason to believe insurance for some conveyancing firms will be hard to come by this year . Those firms that have taken a pile it up high, do it cheap approach to conveyancing are inevitably to be faced with claims directly as a result of the wave of repossessions that are going to occur over the next 12 months. I believe that it is inevitable that high volume-based conveyancers dominated by unqualified staff or as some call them “case handlers” or “fee earners” may be highly exposed.
Those who have a vested interest in promoting the volume conveyancers will often run out the same old stories about innovation of on line case tracking and referral fees. Incidentally, I have not found many agents who prefer case tracking as opposed to actually speaking to a solicitor to find out what is happening on a case.
As to procurement fees, let’s be real . Take away the procurement fees and those bulk conveyancing firms simply do not exist. Furthermore, the way that procurement fees work is such that such conveyancing firms require huge volumes of work. In the absence of volume, financially it just simply does not stack up. Whilst the banks are falling over themselves to loan money and issue mortgages and with estate agents had such a significant strangle hold on buyers or sellers it was almost inevitable that these conveyancing companies make money. It would have been more difficult not to . My view is that the directors of such companies may well believe their success was manufactured by them but look how the mighty have fallen.
As to the question of whether or not I am wrong in seeing No Completion, No Fee conveyancing disappear, only time will tell. I will take a look back in five years time and see how many more of the so-called top conveyancing firms have gone.