The residential conveyancing sector has been under intense scrutiny over the issue of mortgage fraud and negligence. With mortgage lenders’ assertively reducing the size of their panels as a means to curtail their risk, coupled with the downward trend predicted for mortgage transaction volumes following the end of stamp duty concessions on 24 March this year, residential conveyancing is a challenging area to be in.
In addition, there are sweeping changes taking place across the legal sector – new entrants using Alternative Business Structures (ABS), the SRA’s new Code of Conduct, The Law Society’s Conveyancing Quality Scheme and the Council of Mortgage Lenders’ separate representation conveyancing instructions.
Despite the challenges, the opening up of the legal market presents many opportunities. Serious conveyancers must drive up standards and adopt best practices to compete, flourish and steer a much needed image change for the sector — underpinned by substantive improvements in the way business is conducted. Technology can facilitate this. Case management systems (CMS) in particular help conveyancing firms reduce the cost of manufacturing legal services, take advantage of the legal outsourcing trend to increase profitability, ensure compliance with professional regulation and substantially reduce business risk.
Adoption of workflow technology looked at favourably by mortgage lenders
myhomemove, a leading conveyancing services provider and owner of Premier Property Lawyers, the first ABS to be licensed under the Legal Services Act 2007, is a case in point. The firm’s conveyancing business is underpinned by a CMS, which is the central resource for the organisation’s data. All the firm’s business processes are set up in the CMS too. With myhomemove dealing with 1000’s of transactions every month, the CMS ensures that all business processes are executed speedily, efficiently and cost-effectively to deliver the best service to customers.
CMSs are based on workflow technology, and provide pre-defined series of connected tasks and processes that map and manage the inter-dependencies required to complete assignments. They automate routine, but necessary administrative processes, ensuring that redundant tasks are eliminated and incomplete activities are followed up / completed to the desired conclusion.
Given today’s evolving regulatory landscape, having the right technology in place gives conveyancing firms the speed and agility to react to industry changes and gain competitive advantage. As an example, regular changes to the Council of Mortgage Lenders handbook can typically create significant work for conveyancing firms. For the most recent set of changes, myhomemove was able to build in new workflows into its CMS within a matter of days.
This kind of technological capability is looked upon favourably by mortgage lenders, especially as the disaggregation of legal services gathers pace. Already, many mortgage lenders today see the use of workflow technology for processing legal work as a non-negotiable capability that their panel conveyancing firms must have.
Further, in recent years, the smaller firms have struggled to get on to the panel of mortgage lenders due to their inability to manage a high volume of transactions, and incapability to deliver certain types of services. By adopting CMSs, these issues no longer hold. The system gives conveyancing firms the ability to scale the business in response to demand while minimising their own risk and that of the lenders.
Firms that are able to integrate their CMSs with third party platforms such as lenders’ systems, land registry, HMRC for Stamp Duty Land Tax, etc.; are likely to be even more appealing to lenders as technology systems ensure a speedy and low risk expedition of services. myhomemove undertakes 100’s of conveyancing-related searches and processes on a daily basis. By connecting its CMS to third party platforms and bespoke in-house solutions, the firm has greatly reduced time spent by staff on these repetitive activities. myhomemove is able to re-invest efficiency cost savings into other elements of service to ensure that the firm provides the right combination of service and value. With customers becoming increasingly demanding and having the option to shop around for conveyancing services, conveyancers must find ways to be competitive.
Case managements systems enhance quality
Raising quality standards is a major issue in the conveynacing sector and many mortgage lenders in the recent past reduced their panel sizes in an effort to protect their own reputation and customers. But things are slowly changing. Recently HSBC announced that from August this year, all Conveyancing Quality Scheme accredited firms will be able to act for HSBC and the borrowers. Other lenders are likely to follow this trend too, which presents an opportunity for conveyancers of all sizes and strategic adoption of CMSs must be a serious consideration. CMSs help firms adhere to quality standards as a matter of course by automating the relevant business processes. Longer term, CMSs will also help conveyancers maintain their CQS accreditation — they will have demonstrable evidence of the quality procedures followed. The CQS scheme requires conveyancers to undergo strict assessment, self-reporting, random audits and annual reviews in order to maintain CQS status. Relying on manual checks and processes to maintain the CQS status is not possible.
Multi sourcing, a term used to describe the different ways in which legal processes can be sourced or manufactured such as outsourcing, subcontracting and offshoring, is on an upward curve today. Workflow-based CMSs enable convyeancers to critically manage the various legal processes to ensure that the overall service delivered to clients is seamless and jointed.
Regulators encouraging technology adoption
And this is not all. The firms that are well equipped with technology are better placed to benefit from technology initiatives of industry regulators too. Recently the Council of Mortgage Lenders announced that it is looking to develop a system for sharing data on members of mortgage lenders’ conveyancing panels, to ease the administrative burden on solicitors and minimise the risk for conveyancers.
Technology is the way forward. In this volume legal business area, technology facilitates compliance and improvement in quality standards; and helps reduce the cost of legal service manufacture. All these tangible business benefits help boost profitability and build a credible reputation in the industry. This will go a long way in facilitating an image change for the conveyancing sector.