David Gilman is partner in charge of Blacks Connect
Scanning the latest conveyancing news, it was brought home to me the difference between, what we might call, the ‘haves’ and ‘have nots’ in the sector at present. One of the first stories I came across was the news that a ‘conveyancing company’ had moved into large city centre headquarters and was planning to create 200 new jobs, while at the other end of the scale was the news that a ‘leading volume conveyancing firm’ had gone into administration.
Of course there is plenty of detail missing from both these stories and the reality may be somewhat different to the headlines, however it will probably strike many as odd that two firms, working in the same sector, could seemingly be having such polar opposite experiences when it comes to business. Indeed, there may be some people looking at the positive news emanating from the property and mortgage markets at present and wondering how some firms appear to be getting it right, and others are not able to make the same impact.
There are undoubtedly many reasons behind such a chain of events but, to my mind, the die does appear to be cast when it comes to the conveyancing sector and the improving property/mortgage market is likely to make the discrepancies between those ‘haves’ and ‘have nots’ even more acute.
So, what is the message for advisers in all of this? Well it is an obvious statement but one that might be overlooked – in this market hitching your ride to the wrong conveyancing horse will spell trouble for all concerned. This administration comes at the same time as 136 firms, recently listed by the SRA, are having to close down as a result of being unable to secure professional indemnity insurance (PII).
One must ask the question, what amount of conveyancing capacity has been taken out of the market by those firms having to close down? We are yet to find out but I can guarantee that while the bigger conveyancing operators, like ourselves, will be able to take on a considerable share of any lost capacity, it may not be the case that the industry can cover it all in a short space of time. While it is obviously a positive that firms are recruiting and ‘resourcing up’ it does take time to get skilled and experienced new joiners to a point where they can take on cases.
The good news for advisers is that those firms who take conveyancing seriously had the foresight to see this coming from the middle of 2013 and many firms, ourselves included, worked on bringing in the necessary resource during the second half of the year in order to meet this challenge. The big unknown back then of course was how many firms would be unable to secure PII but now that we have firmer information on this, we can begin to assess what further resources we need to bring on board in order to cope with rising business levels not just this year, but in all likelihood for the medium-term.
Therefore advisers are going to be able to offer their clients conveyancing options but we need to stress that they should not go blind into a recommendation. Advisers need to work closely with the conveyancers and understand clearly who has the resource and capacity to deal with their cases. Get the recommendation wrong and you are likely to raise the ire of your client, and at the same time not do your own business (or income) any favours. This is an ever-changing marketplace and, while advisers are in a particularly strong position at present, they need to make educated choices and ensure all their relationships are up to scratch and their partners are able to deliver what they say they can.