Outlook for 2013:Conveyancing
2012 started with controversy in the sector as HSBC launched its own conveyancing panel in January, effectively ditching most of the firms it had previously worked with.
The backlash was forceful from the legal industry with weeks of complaints eventually persuading the lender to make a U-turn, and it agreed to open up its panel to CQS accredited solicitors.
Of course, HSBC wasn’t the only lender this year to have actively managed its panels – it just got the most publicity. Many of the major lenders closely monitored, and trimmed, their conveyancing panels, After all, regulatory pressures mean they must look more carefully at their business partners.
In this context, and with business volumes still only around half the pre-crunch levels, it’s little wonder that a large number of smaller high street law firms have closed down in 2012, citing a drop in conveyancing as a major reason.
There’s actually still plenty of business out there – it doesn’t just walk through your door like it did five years ago. Like brokers, we need to be more proactive about getting it.
Of course, launching our dedicated broker service, Blacks Connect, was the highlight of my working year and we are going from strength to strength. We saw there was a gap in the intermediary market for a quality firm of solicitors and had confidence that our long experience working with lenders and estate agents would stand us in good stead. Six months in and we have been proved right.
2012 also marked the beginning of the Alternative Business Structure system, and over 100 firms have now been granted ABS status, some very small, others very large indeed.
There hasn’t been time to assess the impact of the new system, and in 2012 the way consumers buy legal services hasn’t yet changed. But watch this space…
What about 2013?
It’s not going to be an easy year for conveyancers because the housing market is still stagnated and volumes will remain low.
The sector is consolidating, which means that the bigger firms will start to control a larger proportion of the whole market and the smaller firms will continue to fall off the map, so brokers need to choose their partners carefully.
At the moment the conveyancing sector is still incredibly disparate – a cottage industry. This will certainly change as the large and medium sized players start to dominate over the next few years.
This will occur in tandem, and partly as a result of, the continued panel management from lenders, as they choose to deal with fewer, larger firms.
At the same time there is a lot of hard work being done by solicitors and conveyancers to reassure lenders of quality standards. The Law Society’s Conveyancing Quality Scheme and the recently launched Pledges from the Conveyancing Association are two examples.
However, I don’t think either will stop the slow and steady trimming of panel sizes. It’s an ongoing process, despite the (often valid) protestations of the legal sector. Fraud and quality control are just too big an issue for regulated lenders who must show they have carried out due diligence on the firms they do business with.
The future of conveyancing is bright for the few, but I suspect it will be tough for the many smaller firms.