2022 a conveyancing pivot point?
Are you sitting comfortably?
Once upon a time, when I was an articled clerk, yes, I am that old, many conveyancers harked back to the wonderful era of scale fees and an era prior to licensed conveyancers when solicitors had a monopoly.
I suspect back then there was a cartel in the town that I trained in where the great and the good of the local community agreed to do the “right” thing and keep prices at certain levels. It was the land of milk and honey, email was a novelty, no real internet, fraud happened rarely. The biggest issue was missing a right of way. Clients paid a lot and got an excellent service; well, they did from me. I thought I had a career in the law planned out.
Fast forward to more recent times when many firms take on less qualified staff to run files, referral fees are paid at ridiculous levels, lists of add on prices are charged for things that should be in the normal course of work, the era of online trolls, reviews and general disrespect by the public to anyone providing any service and general competition.
Fraud, insurance, identity, source of funds, poor quality of staff on the other side, I could go on and on. For many practitioners it’s like a dystopian nightmare and many fear a race to the bottom.
Will anything change?
What are the big themes that make me think maybe, just maybe, there is some hope that it might improve
The way conveyancers want to work is changing
I have thousands of conveyancer connections on Linkedin. Every day I see people retiring, changing their role and movement like never before. More and more of you are jacking it in or changing firm. Those that change are then moving firms or leaving the sector when they see the grass isn’t greener.
A trend that seems to be sticking is that people seem to be leaving traditional firms for newer models that are more open to flexible hours, working from home and in many cases improved remuneration. Some then set up their own firms.
The rise of the consultant self employed model is significant. Conveyancers are finding ways of working the ways they want not; not in traditional 9-5 roles. They also want to be able to turn away clients or titles they don’t want.
Equally the job has got harder in the last few years. Clients and other professionals seem to have lost common decency for all service providers of all types. Conveyancer are facing daily abuse and want to walk away from rude clients. That is easier to do if you are a self employed consultant.
There are additional burdens we see reported on regularly of high professional indemnity costs, delays in mortgages, searches, and the other side not having enough conveyancing knowledge to even ask the right questions never mind be supportive of the common goal to move.
This probably means less low-priced, high-volume work and more high priced, low volume work as conveyancers refuse to operate in unkind environments. Less work via referral panels as people want to feel valued.
Conveyancers want to be rewarded better and demanding fewer cases, and higher salaries. Many flexible models are giving them a route to do that.
Link that social trend to the recent cyber attack that has crippled a well known firm and many are reconsidering their views on referral fees. Whilst I believe a fee for outsourced marketing and client acquisition is perfectly fine at a certain level, referral fees have risen over time and forced more conveyancers to do high volume, stressful low paid work. The price hasn’t moved much but the effort in completing a case has. The larger the referral fee the lower the payment to the conveyancing firm. Staff are leaving larger firms in droves in the hunt for less stress.
For me, this model now appears to be broken with referrers to some volume conveyancers finding it hard to find firms to take up the volumes of the firms that can’t cope at the moment. Whilst this might be short lived the winners appear to be the self employed firms, smaller law firms and new start ups.
The trend for consolidation has for now paused.
This social change and a desire to work from home, work flexibly, be respected etc is a global trend in all markets. In our market this means much higher prices for conveyancing firms as staff want more recognition and pay for harder work.
In the last two years we have seen huge volume volatility. Feast or famine. This doesn’t help conveyancers mental health or employment certainty. The big economic picture points to less volatility and lower volumes.
With a supply side shortage of properties on the market and an excess of buyers seeking to move linked to the changes in the mortgage affordability rules. The market volumes appear constrained, but house prices will continue to rise.
Interest rates rising, inflation, low economic growth and rising unemployment may temper demand.
If a normal market is 1.2 million purchases a year, 2022 might be 1.1M or lower. We might find that 2022 is lower with more normal patterns of home moving.
A bit of return to normal seasonal patterns and limited spikes and troughs would do no end of good for a conveyancer at their desk.
The loss of conveyancers leaving the market appears larger than what I guess the decline in transactions will be in 2022. I might be wrong but it looks like a busy year for those that remain in this market doing the work.
New Dawn of Technology
Technology is good and helpful but marginal. For the short term it might make conveyancers a few percentage point more efficient but it isn’t going to replace the brain drain and the knowledge of what to do in complex situations and as conveyancing is generally more exception heavy than simple actual knowledge and experience remains more challenging than the tech. The tech is relatively easy.
What I don’t think will change is the lack of understanding of homemovers of what conveyancers do, or why we do it. We are perceived to be an obstacle and clients are now and will continue to be unreasonable. Moving home is stressful and that type of stress can sadly in many bring out the worst.
From my view of the market clients will be clients, the process isn’t getting easier, but the pandemic has changed the way people are prepared to work. This isn’t just about millennials wanting a new way of life compared to my generation. This is all generations reassessing their lives and values in a new normality.
If the 60’s brought sexual freedom to many, today brings a greater focus on why we work and what we want from work and the people we work with.
Conveyancers in 2022 won’t put up with bad managers, bad clients, cheap work and stupidly high file load expectation. They are going to move to the firms that respect them and expect them to do, do a reasonable amount of work, with reasonable hours at a higher level of pay. This and other costs are going to flow through to home movers. Both salaries and the cost of conveyancing will increase.
I think its pretty clear that prices are going up across the conveyancing market. The question isn’t whether they are and have to, to support a changing workforce, the question is by how much.