How Can Local Conveyancers Compete With Large Law Firms?
In the world of conveyancing, there are minnows and sharks, and according to recent data from the Land Registry, the former are falling victim to market capitalisation by the latter.
While the overall picture for the conveyancing industry is positive, with demand for services at their highest levels since the UK voted to leave the EU, the number of firms in the sector is at its lowest levels since records began. Data for December 2018 shows there were 306,302 applications for transfers of title, charges, and notices submitted to the Land Registry by 5,354 registered entities. Of these, 971 registered entities made fewer than 2 applications, and 2,557 made 10 or less. In contrast, the top ten registered entities made 78,307 applications, approximately the same as the bottom 4,830 providers.
This illustrates a heavily skewed distribution in the number of conveyancing transactions in favour of the big players, leaving relatively little for the overwhelming majority. At the top end, especially in the top 100, Land Registry applications are being made by the main banks, large law firms, and those businesses focusing on conveyancing transactions.
Search firm, Search Acumen, believe that in the last seven years, 700 firms providing conveyancing services are no longer in operation, either due to “mergers, acquisitions, periods of dormancy or exiting the market altogether”, leading to the lowest number of active firms since 2011. But while on average 100 conveyancing providers drop out of the market each year, the number of property transactions has only fallen 3% in the 12 months, hence the widening of market share by those at the top.
Why are the large firms taking more market share?
Andrew Lloyd, Managing Director of Search Acumen states on the organisation’s website that the use of technology has allowed some firms to squeeze out the smaller players. These businesses have invested heavily in new systems designed to streamline the conveyancing process, while improving the way in which they communicate with clients. The latest case management software does much to control, automate, and drive efficiency into the conveyancing process. Software by IT firms such as Hoowla, can save time by automatically filling in forms (e.g. for the Land Registry), integrating with search providers (e.g. Lawyer Checker, Searches UK, and Search Flow), automating the drafting, sending, and filing of documents and correspondence, and creating bespoke workflows.
As firms refine their processes and embrace technology to streamline the end-to-end system of conveyancing, they are able to take on greater volumes of work without increasing resources, safe in the knowledge that each transaction will incur lower human overhead. And at the same time, home buyers have naturally been switching towards lower cost online services, in preference to local conveyancing service providers. This begs the question, what can the smaller organisations do to reverse this trend? If the residential property market contracts due to a weakening global economy and Brexit, the only way to grow a property department is to steal market share. And this requires entrepreneurial thinking and an ability to communicate the value of your business to potential clients and estate agents.
Embrace the imminent digital mortgage revolution
The adage, ‘if you can’t beat ‘em, join ‘em’ applies well in the conveyancing market. Smaller businesses can lower their costs by seeking to implement online / cloud-based case management software. By driving economies of scale, it is possible to take on a higher-volume of instructions at a lower cost to the client. By providing this offering on a regional basis and retaining an emphasis on personal quality service, a shift away from reliance on a highly localised and referred client based may be achieved. To make this a reality, take advantage of social media and search engine optimisation (SEO) expertise to reach across and beyond your regional market.
Smaller players should also take advantage of the imminent shift towards the digital mortgages process. The aim of the digital mortgage is that conveyancers will be able to create a digital mortgage deed which will dispense with the traditional and time-consuming witnessing process, in favour of secure online verification.
Shieldpay’s digital escrow technology has further demonstrated the future of secure conveyancing by completing the UK’s first digital property transaction. The technology streamlines how house purchase funds are handled by identifying all parties to the transaction and holding money in a ‘vault’ until both sides are happy for the transfer of money to proceed. The service will also manage any disputes which could occur.
Digital technology is set to transform the conveyancing industry and will instil greater levels of confidence in consumers and lead to reduced levels of conveyancing fraud, which could damage a small conveyancing business reputation irreparably. However, it must be emphasised, this technology will not just benefit the big names in the conveyancing sector, smaller operators can and should leverage the advantages too.
Accentuating the benefits of being a smaller player
While some clients seek low cost conveyancers, this arguably comes at the price of receiving one-on-one care from a Solicitor or conveyancer who knows each case intimately. To this end, lower volume conveyancing firms who have embraced the efficiency and security benefits of digital technology can also emphasise their ability to provide a superior level of communication and individual service, which is still desired by a portion of the market, including those with more complex transactions and the older generations. After all, while technology and efficiency of process is great for the conveyancing business, is this truly the change that end consumers wish to see? Ultimately, customers want honesty, reliability, transparency, service, thoroughness, and robust communication, and this is precisely what prospective clients will receive with local conveyancers – hence small firms must emphasise their value proposition, or risk being seen as simply more expensive, for no additional benefit.
One way to convey the true benefits of engaging a smaller conveyancer is to partner with lenders to host first home buyers’ evenings. During such sessions, you will have the opportunity to speak to buyers in person, imparting how your service offers them superior levels of assurance and protection. Emphasise the quality of experience the client can expect to receive. They will experience a personalised and more informed house buying journey, during which every conceivable safeguard will be made to protect their interests and their funds. It is vital to explain to clients that by having a one-to-one relationship with a conveyancing specialist who takes the time to know them and their circumstances, the service they receive will be tailored to their needs. And beyond this, because smaller conveyancing Solicitors get to know their clients personally, any potential for conveyancing fraud is mitigated.
With the increasing domination of the large players in the conveyancing market, isn’t it about time local conveyancers start to be recognised for the quality of personal service they provide, and the difference this makes to clients? Let’s start shouting this from the roof-tops; there is room in this market for all types of conveyancing service – one size does not always fit all.