Conveyancing 2025 & Beyond
Our recent Conference was titled, ‘Conveyancing 2025 & Beyond’, and one of the principal reasons for this is our belief that the next five or 10 years are going to bring a large amount of change to the conveyancing sector.
So much so, that the ways in which many conveyancing firms work now may be simply unsustainable beyond a very short-term horizon.
Let’s take a look at where we currently are – approximately 4,000 firms each year conduct conveyancing business however a large number of those are just a handful of cases. Indeed, as Eddie Goldsmith pointed out in his presentation to the Conference, there are many within the industry who think that number will fall dramatically over the next decade. Rob Hailstone of the Bold Group recently suggested that number might be cut by as many as 3,000 which led Eddie to ask whether members who attended Conference would be part of the 25% left or the 75% who might be gone?
Of course, there is an element of speculation about this, but the underlying fundamentals of conveyancing are changing and with the onset of digitisation, the Land Registry in its ‘Digital Street’ project identifying what data needs to be made available to support digital delivery of services, the technological disruption, the use of BlockChain, perhaps the introduction of one source of truth about a property, stored in a Property Log Book, etc, we are heading down a much more automated process.
And if you do consider 75% of most conveyancing cases to be admin-driven, then if we can automate those administrative tasks, it will not take a genius to work out that some firms will be better at this than others, some firms will have the scale and the wherewithal to embrace the technology, some will provide niche, highly personalised, service and some firms will have to find a new role in order to survive.
The good news is that – and I certainly include our membership amongst this number – there will still be a role for the provision of specialist advice by conveyancers. Customers will still want and need this, however those who are still surviving by their ability to move paper around, will probably have to reconsider their future in the sector. The consumer demand and profitability that they’re currently able to generate by doing this, simply won’t exist in the same way.
So, what can be done? Well, as we think any trade association should be doing, we wanted to use the Conference to present some of the potential options available. Eddie has looked at this issue in some depth and was able to determine nine potential models for conveyancing firms in the future – they are (in no particular order: do nothing; take over or be taken over; become an aggregator; outsource; sell equity to a third-party investor; concentrate on work from panel managers; become a niche/specialist player; only carry out lender work; or become a model that Eddie doesn’t believe exists yet – an ‘iConveyancer’ where clients control all the admin element and the conveyancer deals with the provision of advice.
This is a very simple breakdown of the models, and there may well be more, however at the Conference we had sessions on three of the models which might appear to be most popular for existing firms; namely the outsource model, the aggregator model and the business investor model. We had panel participants who either work via an outsource model or offer outsource services; we had aggregators who offer up conveyancing alongside a range of other services namely agency, mortgage brokering, searches, etc; and then we had those who invest/take over conveyancing firms, or facilitate such transactions.
Of those sessions, I suspect the latter – the business investor model – might have been the most intriguing because the discussion (at times) seemed very close to the bone. Questions were raised by the panel when it comes to the meetings they’ve taken with some conveyancing firms: Did they understand their own profitability? How were they making money? Was it an accident? Did they want to make more money? Did they understand the loss of control that was likely to be involved? Were they willing, or indeed, able to change?
It was suggested that a large number of firms not only didn’t know their own profits or their EBITDA (earnings before interest, tax, depreciation and amortisation), but had no inclination to make any more profit. That they were merely playing at seeking an investment, and that the best option might actually be to hang on to the coat-tails of a larger business, benefit from their economies of scale and their ability to secure services cheaper, and not change anything else.
This might have made uncomfortable viewing and listening for some however I suspect that no-one left that room without thinking about their own current model, whether it was right for them, their clients and their future, and (if not) how the firm should continue and change in order to secure their survival and profitability.
In that sense, we hope those sessions (and the rest of the Conference), gave all our members food for thought because, to our minds, it’s clear that the ‘do nothing’ option is only really a choice if you have no plans to be around in five to 10 years’ time. And while there will be some for whom this is the ‘plan’, for most it’s about ensuring their future and the only way to achieve that is by taking positive action now.
Beth Rudolf is Director of Delivery at the Conveyancing Association (CA)