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About Sue Spurgeon
Countrywide Conveyancing Services
As Chief Operating Officer at one of the country’s leading Property Services Groups and Estate Agency for the last 11 years, Sue has been instrumental in the development of Countrywide Conveyancing Services (CCS), the largest transactional conveyancer in the UK.
Sue’s role is to ensure that Countrywide continues to grow and improve their offering – whether that’s through investing in increasing service standards, expanding into new growth areas or responding to the latest regulatory changes.
Thanks to Sue’s commitment Countrywide have managed five consecutive years of profit growth and have also recently been appointed as panel managers to one of the UK’s largest lenders.
“Working for 11 years in different roles in the conveyancing division was a good grounding for my current role. Researching and asking questions of various parties in the market is essential to maintaining continuous improvement. Experience working within Financial Services and Outsourcing has given me an excellent background in balancing the customer expectation in an increasingly demanding consumer environment, and the requirements of our business in our regulatory environment”.
About Yvonne Hirons
Yvonne Hirons is the Managing Director of Perfect Portal and has worked in panel management for over 12 years.
Yvonne has first-hand experience of working at a specialist conveyancing firm which has given her the ability to deliver a stronger and more profitable conveyancing solutions within the legal industry.=
Having built long-standing relationships with law firms, search companies, estate agents, and mortgage brokers, Yvonne is committed to making the conveyancing process simpler and a more pleasant experience for everyone involved.
About Chris Harris
Following his graduation from the University of York with a joint Honours degree in Economics and Politics, Chris has passionately searched for ways of improving the legal sector through technology. During his time at Legal Marketing Services, Chris helped to modernize the company through efficient systems like the implementation of a conveyancing panel management solution and defining the original specification of STARS the LMS work management system.
Having founded The Practical Vision Network, Chris has driven his entrepreneurial desire to assist and defend the legal sector through a range of innovative products. Starting with the Today’s publications providing industry relevant news whilst connecting the sector, through to the trusted brand of Lawyer Checker offering vital protection from fraudulent property transactions, Chris is steadfast in ensuring the continued development and dynamic change to the conveyancing sector.
Chris recognises that there are a wide range of opinions in the sector and he wishes to maintain an editorial balance between the extremes of views that are often expressed in this sector. Whether you are a firm traditionalist or you love to embrace the changes that the market offers, your views are welcome.
About Reema Mannah
Reema Mannah is a Senior Underwriter and an English (non practising) and Scottish dual qualified solicitor, who holds an Msc in Investment Analysis and has 10 years’ experience of underwriting complex defective title risks. She is also an accredited member of the Writers of the Signet, a corollary regulatory body for solicitors in Scotland. Reema has close connections with core players in the housebuilding, renewables, banking and volume conveyancing sectors.
Since joining the Titlesolv team in 2013, Reema has been determined to entrench the perception of Titlesolv as the preferred provider of structured and expedient solutions. She has achieved this by engaging with some of the most eminent legal minds in all UK jurisdictions and the Republic of Ireland with whom she regularly consults to ensure that Titlesolv’s market offerings reflect the contemporaneous dynamics of an increasingly sophisticated real estate transaction market. She leads a strong team which is well poised to meet the pressures facing today’s practitioners and as she continues to innovate and develop solutions for the market, she ensures that the team’s knowledge base is refreshed and that standards are consistently applied to every client demographic.
About Stephen Coupland
Advantage Property Lawyers
Advantage Property Lawyers (APL) has just celebrated its fifth birthday. In 2013 its annual turnover increased by over 40% to £2.42M and it completed over 4000 sale and purchase transactions. Jane Common spoke to Head of Sales and Marketing Stephen Coupland about how the company has managed to thrive in a difficult market….
What do you think are the secrets of APL’s success during challenging times?
“When we set up five years ago there were 15 of us with many years of experience in the sector – I’ve been in conveyancing for 25 years. Whilst we were entering a difficult market in 2009 we had a strong management team across the whole of the business, be that operations, finance or from a sales and marketing perspective.
The key thing we’ve done from day one is adopt “best practice’ in all aspects of our business including compliance, risk management and customer service.
We also created a friendly working culture with sensible working hours for our staff. I hear of firms that are taking on too much work too quickly and that’s dangerous. Our emphasis has been on growing organically and steadily and ensuring our foundations remain strong. We started with 15 team members – we’re now approaching 60. And out of the 15 that started 12 are still with us. That’s something we’re proud of.
Another factor in APL’s success is that we’ve learnt lessons from the past and taken account of how things can go wrong. The whole conveyancing industry went helter skelter in a buoyant market – but, when the market tightened, many had problems. You have to be sure that you’re robust. We’ve built the business up with no debt, no borrowings and with a good balance of work sources so we’ve tried to insulate ourselves right from the start.’
That’s the last five years – what about APL’s plans for the coming five years?
“Over the next five years, we’re going to have more automated processes and move towards electronic files and paper-free conveyancing, leaving more time to focus on good customer service and on building strong relationships with introducers.
In December 2013 we achieved our highest place in the Land Registry stats for completions – 24th. Our aim for 2014 is to regularly appear in the top 20. We’re not aiming to be the biggest conveyancer in the country – but we are aiming to be one of the best.
There are potential threats within the next five years too, however – changes in legislation (for example perhaps a ban on referral fees) and an uncertain economic future which could have knock-on effects with the lenders (who have ever increasing power). To this end, it is vitally important we continue to tick all the boxes for the lender requirements.’
What are the three things you would recommend all conveyancers should consider in the current market?
“Firstly, look at the structure of your firm. We are an ABS doing just residential conveyancing which gives us flexibility and enables us to react quickly to outside factors. If you are part of a larger law firm it can sometimes be harder to react quickly because you’ve got other, non-conveyancing, departments to consider. Being a specialist firm and an ABS gives us the flexibility to talk to players outside conveyancing while maintaining the integrity of what we do as conveyancers.
Secondly, be innovative – use technology to work smarter and more effectively. We had a belt and braces review of our IT systems in 2013 and as a result we have put in place an 18-month plan to establish a more intelligent and dynamic system that will deliver an even better level of customer service to the client and connected parties by making the experience quicker, smoother and taking away duplication of work.
Third, manage controlled growth. You must understand your cost space and your margins – that’s something we’ve learnt from experience. There are many conveyancers out there who don’t understand how much they need to earn per case – and knowing that is critical. You should only be doing work that makes a profit and you should ensure that you can manage that level of work. At APL, I’m personally responsible for capacity management – overseeing the amount of work that comes in and checking that no member of staff is overburdened with files. Don’t fall into the trap of taking on too much work too quickly with inexperienced staff. It will result in aggravation for management, high stress levels for staff and extended turnaround times. Ultimately, you’ll have unhappy clients and introducers.’
What are the advantages to you of being a Council for Licensed Conveyancers (CLC) regulated firm?
“The big advantage I guess is that the CLC fully understands the conveyancing business. The impression we get – having been audited by the CLC and having an on-going dialogue with them – is that they want us to succeed and are working in our best interests. If there are things they believe should be changed they’ll help businesses to achieve that. The CLC has a good track record and the majority of lenders acknowledge they have far fewer issues with CLC firms than they do with solicitors’ firms.’
What are the important things you do to manage compliance and risk in the day-to-day operations of your business?
“From day one, we wanted to ensure that we were going to set the strongest possible foundations from a compliance and risk perspective. When CQS came in we decided that, since as a licensed conveyancing firm we’re not eligible for CQS, we would have a full external audit with Legal Eye for the whole of our compliance systems. The result was that last year we were the first conveyancing firm in the country to achieve the Legal Eye Quality Standard. That meant that when we had our CLC audit, we knew we ticked all the boxes – there was no stress and we could enjoy peace of mind.”
Do you think that with conveyancers being stretched from a capacity perspective and there being a shortage of conveyancers we’ll see a rise in prices?
“What we are currently witnessing is that there are fewer firms that we might call “˜serious’ conveyancing firms and that there’s a huge capacity issue as firms struggle to recruit quality staff. Inevitably, in a market with these factors, prices will increase – whether that is through a higher cost to the consumer or a reduction in referral fees to enable conveyancing firms to run successful and profitable businesses remains to be seen.
The margins are currently very tight, putting financial constraints on businesses. The more we increase the margins the more we can invest back into our businesses, in IT and training for example, which will benefit our clients and business partners in the long-term.’
You won a clutch of awards in 2013 – the Silver Award for the Best Large Conveyancer in The Sunday Times’ Estate Agency of the Year Awards as well as Gold for the Best Conveyancer in the North-East and Silver Overall at the LFS Awards. What does this sort of recognition mean to APL as a company?
“Winning these awards has boosted our credibility in the industry and given our management team the confidence to take the business to the next level with the knowledge that we are doing a lot of things right. The judges’ reports contained some very complimentary comments about the firm and this was even more satisfying as the judging panels were made up of some key people in the industry.
“The Sunday Times Awards ceremony was on the day of our Christmas party. I didn’t ring anyone and tip them off that we’d won – instead I caught the train back from London to Leeds and arrived at the party where I ordered champagne and produced the plaque. It was such a good way to announce it because the award isn’t just about management – it’s a tribute to our staff as well. Everyone is part of it.”
On a personal level, how do you find the conveyancing business at the moment?
“Everyone in the industry has had issues over the last five years. It’s been, without doubt, a very difficult period in the property sector. But, out of that environment, a strong bond has developed between some of the key people in conveyancing, whether they be running firms, panel managers, search providers or compliance auditors. We’re all in the same boat, after all.
I’ve become very friendly with a group of a dozen or so people in the industry. We’ve all had different – and sometimes difficult – experiences but we’ve helped and supported each other through adversity. We don’t see each other as competition.
At a meeting five years ago when we were all under pressure and struggling one of us joked: “˜Anyone fancy going golfing in Marbella?’ With the constraints we were under that sort of thing just seemed totally off limits. But, for all of us, things are looking brighter now – and, in April, we are going golfing in Marbella. Maybe that’s where the competition will emerge – on the golf course. Roll on April!’
About Doug Crawford
Doug Crawford, CEO of myhomemove, spoke exclusively to Today’s Conveyancer as the company expands and opens a new Manchester office.
You joined myhomemove in April 2012. What makes conveyancing an interesting sector for you?Conveyancing, for me, is at a crossroads. When I joined myhomemove a couple of years ago after 16 years in financial services, I went to legal service events and talked to people who believed that conveyancing was becoming increasingly commoditised with the focus more on the legal process than on people.
I don’t accept that’s the way forward. So, when I joined, we rewrote our vision and our mission statements to make sure the customer was at the heart of what we do. We talk about completion numbers and we’re justly proud of ours – 38,000 in 2013. But we have to remember that every one of those completions is a real life event for somebody – it’s move day – and we genuinely empathise with the client, appreciating that this is a stressful time for them.
I was in a strange position when I joined myhomemove. I was about to become chief exec of the largest mover conveyancer in the UK but, because I’d only ever lived in Northern Ireland and Scotland, I didn’t actually know how to buy a house in England! So I bought a home in Leicester and, of course, used myhomemove for the conveyancing. That gave me a lot of insight. Like 80% of our clients, I used eWay, our real-time, online case management portal, which, I felt, cut through a lot of the jargon and explained things in a simple and effective manner.
What makes moving to Manchester so exciting?
Traditionally we’ve been in the East Midlands and as a geographic base it has supported our growth so far – but we have extremely ambitious growth plans. Our aspiration is to achieve 100,000 mover completions a year by 2016. To do that, we need to recruit more people and are looking at creating 200 jobs in Manchester, the second largest legal services centre in the UK, over the next two years.
Our approach there, as it is in the East Midlands, will be two-fold – we want to recruit experienced legal property professionals and to train our own. In February 2013 we set up our CLC and SRA accredited Learning & Development Academy in Leicester and by the end of the year 83 conveyancers had graduated from that.
What do you look for in a myhomemove employee?
For me, an ideal recruit is someone with the right attitude – legal skills can be learnt but the right attitude has to be inherent. We listen to calls as a Board and when I hear our conveyancers talking to clients and the client chatting away about their new house as if they’re talking to an old pal, that’s perfect. It’s not formal or stuffy and in that sort of environment, the client feels relaxed and able to ask questions.
What do you think will happen in the housing market over the next year?
There are all sorts of estimates. Our view would be that the market would grow 15% this year and on a similar level next year. But, obviously, our own plans are to grow beyond that, by around 40% year on year. And we believe that, by focusing on the client, that’s achievable.
We’re trialling new services to help clients all the time – for example, in our Northampton office we’re testing a system whereby when people are on-line with us they can rate our service and the result is pinged over to us immediately. So we had a situation last week when one of the team leaders said to me: “˜We’ve had our first ever 1.’ Obviously a “˜1′ is not good.
As soon as the team leader saw it, she phoned the client. And what had happened was that the client didn’t understand what the green ticks were for – the ticks that tell you that a file has been opened. That was explained, the problem sorted out and thereafter all the transactions with that client were rated “˜4′ and “˜5′. It was a relatively simple thing but because we were alerted to the confusion immediately we could clarify it and move forward with the client’s understanding of the process back on track.
You’re in the business of helping people buy houses. What would your dream home be – a country cottage or a private Caribbean island?
For me getting into the countryside at the weekend is the thing. During a typical week I’m whizzing back and forth between Manchester, London, Birmingham and Leicester. But, come Friday night, I’ll drive up to my house in Scotland and the week is left behind. The house is in a quiet village on the edge of the loch and there’s this amazing sense of space and openness, which I really value.
You’ve achieved your boyhood dream of owning a Jaguar? What qualities would you say myhomemove as a company shares with Jaguar as a car?
The Jaguar I’ve got is the F-type, launched last year, so the first comparison I’d make is between the technology at the heart of the Jag and the technology at the heart of myhomemove – eWay, for example.
Of course, the Jaguar is fast and we’re fast at myhomemove too. I’m trying to prove this definitively but we reckon that we’re three weeks faster than other conveyancers on a like-for-like transaction.
Another comparison – Jaguar customer care is phenomenal and the customer’s at the heart of our business too.
And, lastly, there’s that whole British thing. The whole idea – the dream – of buying a house is quintessentially British and the Jaguar is the quintessential British car. That’s another match between us.
About David Thorpe
David is Director of Financial Eye. A partner of Legal Eye, Financial Eye has a product designed to help COFAs deal with the increasing burden of regulatory requirements. David has over 30 years’ experience in the industry having started off in 1983 as a conveyancer handling plot sales for Heron Homes. Before starting up Financial Eye he was previously the CEO of First Title plc for 17 years.
Why did you choose to set up Financial Eye?
“Well I spent 17 years working as the CEO of an insurance company. During that time the FSA started to get firm with insurance companies and banks, the same way that they are with lawyers now. I was on the other side of this for a long time, as the CEO of an insurance company you are a “˜Control Function 1, a CF1′. So when the new regulatory regime came in we had to pretty much transform the entire business to the new set of rules.
“What we’re seeing now from the SRA is exactly what I saw in the insurance industry so I feel really well-positioned to do what Financial Eye is doing and offering solicitors now. Also I’ve spent 30 years in this industry, I know what it’s like for conveyancers to try and get on with running their business whilst also dealing with this new wave of regulation. It seems like using a sledgehammer to crack a nut. You are now forced to dedicate a load of time and resources and money in complying. And what we’re doing with Financial Eye is taking away a lot of the burden of compliance from the firms so they can get on with what they do best, practicing law.”
Can you give us an overview of what firms need to do to comply?
“Well firstly they need to look at the roles of COLPs and COFA. A COLP must take all reasonable steps to ensure compliance with all the regulatory arrangements. A COFA must take all reasonable steps to ensure that the body and its employees and managers comply with any obligations imposed on them under the SRA Accounts Rules. In order to do this, they need the appropriate systems and controls in place, including financial management information. Most importantly, they need a good understanding of accounting policies and an ability to interpret financial management information.
However, what should have been a clear delineation of responsibilities has been confused by references to rule 1.2 of the Solicitors Accounts Rules.
“The suggestion being that this makes the COFA responsible for the systems around sound financial management in the firm and reporting compliance failures about them. The good news for COFA’s is that this is not actually the case. The responsibility for ensuring compliance with Chapter 7 of the Code lies with the firm and its managers. However, when I asked the SRA whether they would expect the COFA to notify them in the event the COFA felt that the firm was in serious financial difficulty even if the managers and COLP disagreed, the answer was they absolutely would expect them to. Be in no doubt, the COFA has a duty to report serious financial difficulty to the SRA.
“It also goes without saying that given the necessary close interaction between the operation within a firm of the client account and other financial systems, for the COFA to undertake their role effectively, they should have involvement over the totality of the financial management of the firm.
What steps would you recommend firms take?
“Firstly I’d say that now is the time to keep a really close eye on your business. Business planning is essential and cash flow forecasting is now even more important than ever. But what happens as things start to improve as they surely will? For example, an increase in house sales activity will logically require an increase in conveyancing resources and other additional expenses.
“But when was the last time you asked yourself this question, “How much longer can our partners afford to keep on drawing the same amounts as the business staffs up to deal with increased volumes?”
“I think the real danger is yet to come. Taking on more costs now can potentially be lethal if your income never catches up with your expenses. You can end up becoming a victim of your own success. Many firms that made it through the downturn can go under as the market improves if they don’t have realistic cash flow projections to sustain their business. Ask yourself “Do we really need those extra premises and if so is it really necessary to sign a new lease for that long”? “What about those new car leases”? Can we really afford them”?
“Mergers and acquisitions may look attractive and can be an effective way to grow a business. But they are costly and time consuming. Believe it or not, one of the biggest single barriers to getting a deal over the line is the sheer number of archived files that each firm has. Nobody knows for sure what potential liabilities they will actually be taking on.”
What do you think the main opportunities are within the market?
“I think lawyers are well-positioned to keep delivering excellent service to their clients. The problem is that a handful will always let the side down. That’s why the regulators are reacted the way they have. In order to defend against the handful they are causing great heartache for the rest of the profession. And so I think they are just raising the bar a little bit. I think the opportunities for lawyers are going to be better when organised law firms can carry on delivering the service they want to deliver. It’s just going to be a bit of pain to go through get to that point. But I think when they get there they will be better organised businesses. People are always going to want legal services. There are going to be new players entering the market. But if firms get organised now they’ll be one step ahead of them.”
What’s next for Financial Eye?
“We’re lining up more and more clients now. When we take on board a client it’s not a one-off tick box exercise. That’s part of our initial review but it’s not just that, we really work with them, we see ourselves as their “Financial Eye”. We come in have a look at what they are doing, have a good look around at some of their processes and systems and more importantly we will make sure they are on track to meet their financial forecasts. It’s not just a one-hit; it’s an on-going relationship.”
What are the aspirations for the future?
“Well our partners Legal Eye work with some 250 clients and that’s what we are aiming for. We very much see the business we provide as complimenting their service and actually sitting side by side. They are signing up more and more law firms every week. So the race is on for us to play a bit of catch up!”
About Paul Bassett
A. P. Bassett Solicitors
Paul Bassett has launched a campaign for mandatory separate representation for buyer/borrowers and lenders. The campaign is called “˜Big Banks Bad for Local Business’ You can follow the campaign on twitter and banksbad4biz.wordpress.com. He set up the campaign as he felt that lenders were not acting in the interest of the consumer, the High Street or indeed his own business.
Paul qualified as a solicitor in 1981, spent his early career in London before moving to Cornwall in 1995, where he was a partner in a West Country firm until he left in 2006 to set up his own firm A P Bassetts Solicitors based in Lostwithiel.
What made you decide you wanted to set up the campaign?
Santander. Back in 2010 we were on all the big lender panels, and then Lloyds took us off their panel which was obviously a fairly heavy blow. The reason they gave for doing so was risk of mortgage fraud. This effectively started this ball rolling as they removed hundreds of small firms from their panels as they weren’t doing their required number of transactions. They said that we wouldn’t be familiar with procedures and wouldn’t know what the process was, that we’d be a mortgage risk because of fraudsters being able to take advantage. I don’t think they were intending to say that we were actually dishonest in dealing with the clients and taking money off the banks by fraud intentionally. I can’t accept that it’s because of mortgage fraud that the panel culls are being done.
This effectively took out the small firms from the market. That’s when seprep became something we dealt with. I spoke to other local firms, who were still on Lloyds panels at that time. They were quite happy to deal with us on the basis that they would deal with mortgage matters and we would deal with the client and the seller. Say I charged £600. I contacted them; they would charge £150 for dealing with the Lloyds mortgagee’s certificate of title. So I would meet the client, deal with the seller, do all the searches and enquiries and send everything over to them by email and post and they are able to do the certificate of title and get the funds through. I charged my client £450 and the other solicitor charged him £150 or the other firm charged me £150 and I charged my client £600.
Up to 2012 this worked fine. After Lloyds took us off their panel the others jumped in after them in 2012. At the beginning of 2012 they reduced panels. First HSBC reduced their panel down to 43 firms. At that point the Law Society got involved. The Law Society in 2011 introduced its CQS scheme and did a deal with HSBC to say if a firm had CQS they could be on their panel.
I thought that’s just disgraceful as that’s just cut out all the small firms as well. Very few were interested in CQS accreditation before then, but it then became the Law Society’s means of expanding the scheme. Santander then took us off their panel in the summer. They gave the same reason as Lloyds: because we were not doing enough volume of work we were a mortgage risk.
I had appealed in the case of Lloyds by pointing out that we were the only firm in this town of 3,000 people and we’d grown and developed and that we served the community well, we didn’t have public transport in the same way that other towns had, all the rural stuff, messages of support from people etc. but to no effect. When I appealed to Santander they replied with a generic email message saying no.
So I then went to the press to say what was happening. What Santander also did was tell the firms who had been doing work for us that they couldn’t continue to do so. This meant the firms we were doing seprep with said “sorry Paul, we can’t help you anymore because we’ll lose our panel accreditation.”
When I went to the press, Santander claimed I hadn’t appealed and they were still concerned about the rural communities and all the rest of it. I think they intended to make sure our campaign didn’t get off the ground as far as I’m concerned. That’s where the anger came from. I thought either I lie down and let them do this or I do something about it.
My clients and I have used seprep without any problems. The Law Society approach is solicitors cannot promote seprep that we’ll find the SRA won’t sanction it. The Law Society says it’s not in the interests of the consumer. They claim licensed conveyancers will just take a march on us all.
I believe seprep is the future. Mandatory separate representation will come about. The Law Society is saying that seeking seprep should only be a last resort, but that isn’t an argument that’s going to work. That just looks like self-interest. I don’t think it costs more nor causes delay. I’ve done it on the basis of no more cost to the client to do so and no delay. It can work. If I am not doing the mortgage work, why should I charge my client the same sum as if I was doing it? The fact that the lenders want their costs paid for by the borrower is an issue that should be challenged.
When seprep is in the lender’s interest they insist upon it. Equity Release schemes, where people take out a mortgage and do not pay monthly to borrow on their homes, can only be done with the borrower being given legal advice from their own solicitor. The lenders don’t want any challenge from family members, who have lost their inheritance saying their parent wasn’t properly advised.
In the long term it will be mandatory separate representation, because the lenders cannot change their culture. They will have set up their conveyancing sheds to sell their products and will become embroiled in mis-selling of insurance and there will be a public outcry.
Where is the campaign now and what’s next?
We initially got the local community behind us and have got great support from within the town for what we’ve been doing. We tried to get to the local Law Society interested and they initially had a fairly neutral stance. Then the Law Society nationally became quite aggressive in saying – no we don’t want separate representation, it is going to be against the interests of conveyancing solicitors to do so. I’ve not got a lot of support from within the profession. But I do know lots of lawyers who are angry about what’s happened. But they’re not necessarily up for separate representation.
What we have done is go to local MP’s. We were lucky to get Dan Rogerson, the North Cornwall MP to raise a question at PMQ’s. The PM said he would investigate the matter. We’ve got an online petition and postcards that we’ve given out to people to petition Vince Cable to look at this from protection of the High Street point of view.
There’s a risk of losing the local touch. If we went, there is no firm for my clients between Fowey and Bodmin. We’re in an area with hardly any public transport. That leaves many stranded without a solicitor to go to. That’s not just for conveyancing, it’s all the other work. Local communities will fight for it once they are aware of what’s happening.
What do you see the situation being in a years’ time?
Until the Scottish Law Society decision last Friday, I was not expecting quick change. Their decision has given a boost to change south of the border. Our campaign has sought to get the issue out there. It’s time will come. It will become an issue when lots of law firms have been removed from panels. With CQS you’re now down to maybe a couple of thousand law firms who are dealing with conveyancing in the country. When the lenders control of the market becomes clear, at that stage there will be calls for change. The CML reaction to the Scottish decision has been extreme and watching the Twitter conversation between the CML and the Law Society shows that there is now a chance for separate representation here.
Firms are suffering and hoping the market will pick up and they get back to some volume business. I’d like it to be that lenders didn’t veto seprep. There’s no reason why they have effectively done so and they clearly do not want it. It’s not a free market. That’s what we’re up against. Look at the way the lenders are working. They are offering free conveyancing if you buy their product, or saying that you won’t have their loan unless you use their conveyancer.
What I would like to see in a year’s time would be for clients to be able to use firms they choose, if they want to use their local firm to buy, but not do mortgage side, that they can. That at least will be a level playing field.
Have you assessed what impact this has had on business?
Yes. Until now we’ve grown each year. It’s too early to tell, but I’ve had to allow for a 20% reduction in fee-earning income for this year. We’re fortunate that we still get the downsizing work and people who are buying properties without mortgages. We are still doing conveyancing, but we have lost out significantly since the removal from the panels happened.
Do you feel supported by the Law Society?
No. They say that “small firms being removed from panels is going to destroy firms’. ‘This is a blunt instrument.’ They also know that it’s nonsense to say that small firms are a mortgage fraud risk. It’s not true. They don’t and won’t say that this is part and parcel of the lenders wanting to increase their market share. I don’t believe for a second it’s to do with mortgage fraud. I don’t believe it’s because they’ve been told by the FSA that they had to do something about their panels and this was the only way they could do it.
But that’s because I don’t come across solicitors who do mortgage fraud. My experience of my fellow solicitors is that we’re honest and get things done right for our clients. I think the banks wanted to get rid of competition from law firms and exploited the conveyancing panel issue to make some money out of it. I’ve got no evidence of this, but when you look at those lenders who are selling legal services, they need to have customers for their product.
About Claire Barker
Claire is the managing partner of Equilaw Ltd and Chair of the Equity Release Solicitors Alliance. She took a traditional path into law, working in a residential property team in a mid-size corporate firm. This is where, 13 years ago, she started working with one of her current business partners. She set up the equity release arm of their business in 2001. In 2007 this was rebranded to Equilaw and in 2008 it became a Limited Liability Partnership.
The two of them then decided to break off on their own. They met their third business partner and bought out the residential property arm of their old business and the entirety of Equilaw in May 2010.
Between the three of them they now own Thomas Law Group and Equilaw.
Claire set up the Equity Release Solicitors Alliance back in 2008, in order to help consumers, IFAs and product providers who were looking for law firms who were specialists in Equity Release. The Alliance was launched formally at the Law Society in January 2009.
How would you explain equity release?
It’s a mechanism that allows people to utilise the wealth that they have tied up in their homes. They might be cash poor but asset rich. They could have paid off their mortgage, or have a very small mortgage remaining. Essentially their wealth is tied up in bricks and mortar.
What they can do is get a loan against the house, which is usually secured as a lifetime mortgage (I won’t go into home reversion plans, as these only account for 2% of the market currently). A lifetime mortgage means the client can take money out as a lump sum. They might choose to retain a draw down facility as well, on which they don’t pay interest. No repayments are required during the life of the loan and the client can basically stay in their home for as long as they want to or need to.
All of the lenders belonging to the Equity Release Council have agreed that if the loan exceeds the value of the house when the last person is no longer living there, then they won’t seek to recover any shortfall. So it’s a no negative equity guarantee.
It’s a win win situation for the client. They don’t make repayments (or pay ground rent on a home reversion scheme), they get a chunk of cash that they can use as they want and they can stay in their house. Innovation is coming into the sector and some providers have introduced products where homeowners can pay the interest if they want to.
So do you see the shape of your business changing?
We are excited about the future. We have been in this business for a long time and it’s really positive to see the market growing again. Like everybody else, we had to make redundancies in 2008 so it’s great to be recruiting again, as well as expanding into new premises.
Do you see any big changes on the horizon?
I think the Equity Release Council is going to continue to grow. Membership has already bypassed 250. Standards should be enhanced. We’ve waiting to see whether new providers will enter the market, or whether mainstream lenders will either enter or re-enter the market. Technology will play a huge part of the future. We’re in the age where clients are moving to email; I can see a point where we start having Skype appointments etc. The future looks bright for those who are serious about this market!
About Ian Fletcher
Move With Us
Ian is Director of Conveyancing at Move with Us, one of the UK’s leading residential property experts. He has been responsible for conveyancing at the firm since he joined just over 11 years ago, just a month after the firm introduced conveyancing to the business.
He recently became Managing Director of the partner network side of the business which covers membership and some areas of the firm’s agency business.
Ian said of the business: “When we started I was the one ringing the agents and consumers, picking up conveyancing leads and giving quotes. Now we have about 55 staff involved in conveyancing and hundred people on the partner network side of the business.
“We’ve set ourselves the ambitious target of doubling the business in 18 months. We were one of the first firms to come into the market and offer a panel managed service. At the time we had just four solicitors’ firms on the panel. Now we are processing in the region of 3,500 conveyancing cases a month. October will be the biggest month for instructions in our history.”
About Roger Wilson
Roger is the Conveyancing Services Director at Connells Group, one of the largest providers of Estate Agency and related property services in the country. He is responsible for all the Conveyancing propositions offered throughout the Group and also has responsibility for a range of other legal services the group provides.
He has been at the firm for six years. Connells Group has just under 500 estate agents branches and their Home Conveyancing division handles around 30,000 completions a year.
Roger describes himself as “poacher turned gamekeeper” having spent many years as a partner at Shoosmiths Solicitors prior to eight years as Legal Services Director at Countrywide and a year at Rightmove working on Home Information Packs.
When he’s not working Roger has a penchant for travelling to obscure places including a recent three week trip round all of the ’stans. He’s currently deciding whether a tour of Chernobyl will be next on his holiday list.
When asked if the conveyancing market will change over the next few years and become more influenced by players like the Co-op and Tesco, Roger answered:
“Those with significant financial muscle and access to customers have been able to tap into the Conveyancing market for over 15 years now, as Licensed Conveyancers, and indeed, I was one of the founding partners of Hambro Countrywide Conveyancing in 1997. Getting access to customers at the critical decisions points on house purchase is key in Conveyancing, and Tescos would struggle with that. In addition, I know from personal experience how challenging it is to build a significant conveyancing operation in house – it takes a lot of very hard work, so I’m not convinced that Tescos and the like will have a big impact.”
About Martin Macduff
Founded in 2001, Redbrick Solutions have enjoyed a consistent level of high growth, increasing turnover by 400% over the last 5 years. Best known for their intuitive conveyancing case management solution, they now also offer full practice management and legal accounts. We speak to Redbrick’s Managing Director, Martin MacDuff.
What changes have you observed in the legal technology market over the last 5 years?
“Lawyers are often reluctant to increase the price of their work, so understandably they consistently seek cost savings through efficiencies which is great for us as the use of our technology is all about delivering demonstrable time savings to deliver the same or a greater output with less manual handling and intervention.
“The profession have faced significant changes to their obligations in terms of regulatory requirements with AML / KYC checks and COLP & COFA requirements as well as increased obligations to lenders and Land Registry changes. All of which place additional responsibility on the firm and with that comes the extra time investment and in some cases risk. It concerns me that firms feel unable to pass on these extra costs to clients and there is a race to the bottom when it comes to price.
“In terms of technology more firms are looking for delivery via alternative platforms, such as web based delivery, which does bring operational benefit in terms of availability and accessibility, as well as for reasons of disaster recovery and business continuity. Our product is deliverable via either an installed route or via a hosted platform so we are agnostic in terms of the firms technical preferences.
“More reliance and dependency on technology continues to be the theme in discussions with existing and prospective clients as firms look to cover off their obligations as robustly as they can through the use of good technology.”
What is the secret to Redbrick’s success during challenging times?
“We have continued to deliver our technology over the last 8 years with only one price increase to existing customers, acknowledging firstly the challenging times we have been living in and taking into account our clients ability to leverage price increases, but secondly we also deliver functional increases to our product in terms of quarterly updates and service giving our clients a greater competitive edge for the same cost. As our model is largely transactional, i.e. we charge each of our clients for the number of active cases they list in a calendar month, we are very much invested in each and every client we have. This ‘in it with you and for you’ attitude and commercial approach is core to us retaining our existing client base as well as attracting new firms who are fed up being left with old, redundant and out of date technology.”
How do you think Redbrick differ from other providers in the sector?
“We have a proud history of being first to market with a whole range of new initiatives and by being entrepreneurial in spirit and our approach, we always strive to give our clients the best we have both in terms of product and service.
“Our business model sets us aside from the plethora of established suppliers, and interestingly new entrants since our launch have attempted to copy our business model, which is of course flattering! The very fact that we charge transactionally means that we not only help our clients run a more efficient business, but we also help them grow their business whether it be converting more of the business they quote for than previously was the case, or help them open up new channels of work – after all it’s in our interest to help firms do so.”
You’ve achieved a great deal in the last 5 years, what are Redbrick’s plans for the future?
“We’ve some really exciting plans for the future, such as online data capture coming to market shortly, which will allow client firms to ask their clients to submit data about themselves or their transaction electronically via, for example, a tablet or mobile device which will then return the data directly into the case management system. These sorts of timesaving initiatives are beneficial in reducing the effort and time involved in the law firm servicing the client and in moving the transaction along in a more expeditious way.
“At Redbrick we also take a pretty balanced view with regards to new functionality, so in some cases we partner with existing or new to market organisations who can facilitate integration, making our clients’ life more efficient – we don’t reinvent the wheel for the sake of it.
“For us the future is about bringing the best technology to the legal market and making it affordable – whilst we are focused on winning new clients we take a surprisingly passive approach to new business as we know that having the best product available means we will naturally attract the right sort of firm. It takes time to build that market position and confidence to see it through but we are there now.”
You are obviously very close to the conveyancing market, what are the main issues you see conveyancers facing at the moment and what action do you recommend they take?
“Transaction fraud is probably the biggest hot topic at the moment and we will shortly be announcing a new partnership which will tightly integrate in to our case management product to help eliminate this. Additionally, I think insurance costs for firms remain at levels which make it very expensive for our clients to have too great a dependency on conveyancing work, and you won’t be surprised to learn that we hope to soon be bringing to market a cost per case insurance product which will see overall PII costs reduce significantly for firms.”
Where do you think the biggest opportunities lie within the legal market?
“We’ve seen some proactive and ambitious client firms grow significantly over the recent past as M&A activity has really picked up. The number of firms operating in the legal sector has fallen significantly and I think it is widely accepted that this trend will continue for some time. Consequently, those firms that don’t have a solid succession plan in place should either build one quickly or start to align themselves with larger firms that might have an appetite to merge them in to their existing operations.
“The days of Firms being sold and Equity Partners leaving with a sensible retirement pot have long since passed and while the landscape has changed, both those exiting and those remaining can get what they want from such circumstances, but both need to think carefully about their strategy to ensure the outcome they planned on is achievable.”
For more information on Redbrick Solutions products and services please see www.redbricksolutions.co.uk or call 0845 166 2629
About Tracy Burtwell
Tracy Burtwell provides her views on what she considers to be the main challenges and opportunities for property lawyers and licenced conveyancers as we move through the year:
How can I not mention Brexit when looking at 2019; the outcome may have a huge impact on the market, yet at present there are more questions than there are answers. Will it have an impact on compliance, legislation, will the market become depressed, will new opportunities appear? At this stage it remains to be seen; so let’s watch this space post March.
In uncertain times, and to mitigate risk resulting from fall-throughs, we have an Aborted Transaction Insurance, which provides assurances to buyers by providing cover for a range of incidents, should a property transaction fail to complete in the property chain.
- Increased transparency
The SRA’s transparency rules are now in place and with this, solicitors providing conveyancing services must publish their services and pricing information on their websites. In my view, I don’t believe consumers will be driven to compare conveyancing services purely on price, but instead it’s an opportunity for legal services firms to demonstrate exactly what is involved in the conveyancing process, and instead use the transparency rules as a chance to demonstrate the value – and complexity – of the services being provided.
I believe this will be a year where technology will play an even greater role in supporting conveyancing professionals – particularly in reducing administrative tasks for fee-earners, and in greater collaboration between third parties to reduce duplication of effort.
As just one example, the new order platform that we our customers provides a more integrated experience so key client information is automatically populated into the search ordering system, saving conveyancing professionals vital time and removes duplication of effort.
- Advances in property searches
When it comes to managing risk in a property transaction, liability typically falls at the feet of the property lawyer if an issue later arises. As such, the depth of data provided in property searches, such as environmental risk information, is clearer than ever before – providing greater intelligence to the homebuyer and providing property professionals with everything they need in order to provide clients with full and property due diligence, which is backed by appropriate indemnities.
- Speeding up transaction timescales
The need to improve transaction timescales remains a constant focus for the sector. In 2008, transactions were typically taking between 11-12 weeks to complete. Ten years later and this has increased to 16-18 weeks. In the last quarter of 2018, fall-through rates were also up to almost 50% for a variety of reasons, although at least 1 in 10 was due to slow progress.
A faster process could mitigate much of the risk, and while the speed of searches is increasing – with 80% of local authorities completing and returning search data within a 10-working day timeframe – I believe we will see greater emphasis on working on searches earlier in the chain (as offer accepted stage) to help further reduce average transaction timescales.
- Third Party Relationships
With many property transactions, conveyancing professionals also liaise with other third parties in order to bring transactions to the rightful conclusion – from estate agents, mortgage brokers to lenders – and this can prove to be disjointed and inconsistent practice, as every firm works in a different way. Will 2019 bring greater consistency of approaches in terms of how workflows are managed between the different parties?
I think technology will start playing a greater role here in making that happen. We also know from our customers that the subject of referral fees between estate agents and solicitors is a sensitive one and, as such, whether any rules may be put in place to ensure greater transparency of referral fees paid – particularly given the SRA’s focus on pricing transparency for conveyancers.
This is something we are hearing our customers discuss, so let’s see what the year will bring.
About Tom Backhouse
As Managing Director of mining data specialist, Terrafirma, Tom’s personal values of hard-work, education and subject passion are at the forefront of his vision for the long-term future of the company and its role in changing the shape of UK environmental risk assessment. He is committed to raising awareness of ground stability risks that can impact upon property sales and land development, and innovating the way risk is assessed, making the information and format in which they are delivered easy to understand.
Tom first became intrigued with the approach to mine search reports when he moved to Cornwall soon after his graduation from University, and began working in the localised mining search and ground investigation industry at Cornwall Consultants Ltd. This prompted him to undertake nationwide market and product research which resulted in the founding of Terrafirma in 2013. The first goal was to design its robust and streamlined risk assessment process, underpinning a suite of user-friendly search reports available to the conveyancing and property sectors.
Terrafirma is now lauded for its service and its innovation in the provision of mining and ground risk assessments. Tom has been proactively involved in raising awareness of many mineral extraction risks other than Coal, Tin and Clay, and has provided over 150 hours of CPD training to property professionals across the UK in the last 12 months.
“My goal is for Terrafirma to provide a professional and accessible face to ground stability risk in the UK, ensuring accurate information is available to all property and land transactions, reducing or eliminating potential liabilities, while keeping the property market transacting.”
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