Too little, too late could be the epitaph on the solicitors' conveyancing gravestone as big firms muscle in on the act, reports Shaun Pye
Hambro Countrywide Estate Agents has not set up a volume conveyancing centre in Bournemouth. But the town's high street firms should not rest easy. One month ago Hambros told its local agents to refer conveyancing work to its centre in Cardiff. In the first four days it is believed 30 sales were referred.
Three weeks ago The Lawyer reported that ten of the UK's largest property firms – including Eversheds, Shoosmiths & Harrison, Dibb Lupton Alsop, Hammond Suddards, Addleshaw Booth & Co, Walker Morris and Marsons – were planning to establish a “trade association”.
Although the firms played down the move, saying the association will be no more than a “technical talking shop”, it is understood it will lobby banks, the Government and the Law Society. One solicitor in the group comments: “I don't think high street firms have a future.”
While the volume conveyancers are getting their act together, the long-awaited response from the high street is continually postponed.
Solicitors Property Centres (SPC) plans to have groups of local solicitors running their own property centres with a national parent company taking on the marketing of the scheme. The first centre was due to open at the end of spring. Then it was the end of summer. Now SPC director of operations Tony Bogan is looking at “the end of autumn”.
He says the problem is not lack of support – over 700 firms are on board – but simply finding premises for the large property display centres. SPC has a shortlist of nine areas in the UK and hopes to announce five definite schemes soon.
In April, the rival Edinburgh Solicitors Property Centre (ESPC) was forced to put plans for a London centre on the back burner after failing to find its declared target of 350 firms. Annie Murray, ESPC's chief executive, says plans to open centres in the North East, based in Newcastle and Darlington, are on track for the end of October with a commitment from nearly 100 firms. She says attitudes in the South East might change when firms see the success of the North East venture and hopes that a London centre “on a reduced scale” might be possible next year.
Other local schemes are also experiencing delay. John Edge, a partner with Bournemouth firm Edge Leyden Ellis, who rose to prominence with a grassroots campaign for fixed conveyancing fees three years ago, is now trying to set up a property centre embracing Bournemouth, Christchurch and Poole. But the plan is hampered by internal division over which of the three towns the centre should be in.
More promising, perhaps, is an initiative from Kent estate agent Ward & Partners, with 42 offices, which has drawn up a panel of five local high street firms to refer virtually all of its conveyancing work to. In return, the firms have been asked to sharpen up their customer service with extended opening hours and a promise of “no sale, no fee”.
David Lench, managing director of Ward & Partners, says the panel is a direct response to Hambros. “We want to keep things local,” he says. “We believe, at this time, the public still want a personal service.”
However encouraging such sentiments might be, the widespread perception is that the high street conveyancers need to act more quickly. One conveyancer says: “They just can't get their heads out of the sand.” Edge says the problem is cultural: “Solicitors have a mental block on working together and seem incapable of waking up to the threat posed by the volume conveyancers.”
Some say the high street is reluctant to part with money. It costs between £12,500 and £25,000 to sign up to the SPC and £5,000 to £20,000 for the ESPC. Leslie Dubow, executive officer of the Solicitors Property Group, says: “These firms are not flush with money and don't want to increase their overdrafts further.”
The burden will increase when conveyancers are hit with a massive hike in contributions to the Solicitors Indemnity Fund (SIF) following the introduction of risk banding, designed to make firms' contributions reflect the risks posed by the work they undertake.
Dubow believes volume conveyancers will be far less affected because of their size even though, he claims, they will expose the profession to more risk.
Meanwhile, negotiations between the Law Society and the Council of Mortgage Lenders over plans to create Standard Mortgage Instructions (SMI) are dragging on with no end in sight. Currently there are over 100 different instructions from various lenders. Not only does this make conveyancing complex and time consuming but solicitors are unsure what specific responsibility they owe the lenders they deal with from case to case. One conveyancer believed SMI would be “a great help” to her practice, but she now feels “totally disillusioned” with the Law Society.
Of the long-term future, the head of legal at one leading building society sounds an ominous warning: “At the moment mortgage lenders haven't really taken a view but it is more likely we will align ourselves with volume conveyancers than an organisation such as the SPC.”
Few are predicting the imminent death of the high street conveyancer, but the next few years will be hard. For now, the responses to the threat from the big firms sound good on paper but whether they will rescue the high street remains to be seen.