As I enter the blog-o-sphere for the first time, I wonder what the future holds for all in the residential property sector ? In future posts I will look at the threats faced by estate agents but lets start with the much maligned high street law firm who rely on conveyancing for a significant part of their income.
Many would argue that the doom merchants have been around for years predicting the demise of the conveyancer quoting arguments like ” e-conveyancing or factory conveyancers will surely see the end of the High St firm ” but here we are with still thousand of firms relying upon conveyancing.
I believe the threats today add up to an impending disaster for the high street law firm. They come in different guises but in no particular order :-
- Professional Indemnity Insurers – after several years of an open market the insurers are now growing tired of losing money on Solicitors PI insurance and are being more selective. Sole Practitioners are having great difficulty gaining insurance and even 2 and 3 partner firms are seeing premiums increase hugely. Whilst not catastrophic this can only reduce the numbers of law firms with some closing the doors and others merging with larger firms.
- Referral fees – Now this Pandora’s box is open there is no going back. The large corporate agents make millions from selling conveyancing and will continue to do so by sending more and more work to fewer and fewer firms.
- Factory Conveyancers – the likes of My Home Move are certainly making their presence felt and they currently have over a 1 % market share which is amazing for one firm based in Leicester. If this was replicated everywhere we would end up with less than 100 firms doing conveyancing. ( a bit like remortgage conveyancing then !)
- The Internet – More and more people use Google to source anything from Insurance to brick a brack – so why not conveyancing ? Well they do ! – having conveyancing as a google add word can cost the subscriber over £3 per click and many firms are doing this – most notably Fridays Property Lawyers. Whilst this may only currently account for 5 – 10 % of the market it is certainly growing but comes with the added problem that those searching the net invariably want the lowest fees possible – not good news for the conveyancer !
- Last but by no means least, are our friends the Lenders who are beginning to flex their muscle in this arena. Reducing panels, expelling sole practitioners etc. Their motives seem to be, to reduce fraud, reduce the cost of managing the panel and maybe just maybe, to get their share of referral fee income. Some suggest the total number of firms on lender panels will fall to less than 100 in only a few years. So maybe this is the real threat !
So amongst all this doom for the high st conveyancer who can come up with some positives ? How do you survive the cull and indeed what opportunities does it present, as change will always benefit someone.