Previous CLC roundtables came at times of frenetic activity but this year the market has slowed and that is presenting new difficulties for conveyancers.
Mark Montgomery, chief strategy office at Simplify, explained how the challenge “is always around managing capacity in the market”. While we saw expansion during the stamp duty holiday – with solicitors’ firms in some instances returning to conveyancing to help the market cope – now the concern is overcapacity.
Rob Gurney, a former licensed conveyancer and current managing director of Ochresoft, said caseloads have fallen by 20-30%. “This can be terrifying, but some law firm customers are saying that, while not necessarily welcome, it is enabling them to feel a bit more in control again. The problem, of course, is that, with such tight margins in residential conveyancing, how sustainable it is at a depressed level is up for debate.”
The upside, suggests Mark Montgomery, is that with fewer files to juggle, conveyancers should be able to progress transactions more quickly.
But this has to be set against declining numbers of lawyers doing conveyancing. Paul Bennett, a partner at Bennett Briegal, a law firm that specialises in advising other law firms, said: “One of the trends in the market that I have seen in the last 12 months is that partners have been retiring and have not been replaced. Fee-earners have been leaving through natural attrition and have not been replaced. Though the volume of matters is down, the number of people actively undertaking the work has also dropped in some firms.
Capacity is not just about the number of people, noted Rob Gurney. “It is about their experience and their ability. If you replace someone who can handle 60 matters with someone who can only handle 30, obviously you have half the capacity but the same number of people.”
Another operation with capacity challenges is HM Land Registry, where delays have become a significant concern for the market. Mike Harlow, its director of customer and strategy, and deputy chief executive, acknowledged the problem, which he said occurred whenever there has been a housing market bubble.
“The problem is that you do not have people sitting around waiting for the demand to peak once every 10 years,” he said. “And we’re not an organisation that can say, ‘That is enough work’. We have a target now of no case older than 12 months by spring next year. That is not simply reliant on technology, but through having the right number of people with the right skills doing the right sort of work. More than a third of our current caseworkers have been recruited within the last 18 months. Developing those people to the level needed to keep property ownership secure is hard work and inevitably takes time. We are progressing to the size that we need to be as quickly as possible, while also safeguarding the quality.”
Mr Harlow said that, by around Christmas, some 800 people will have come out of training to move up from simpler to more complex casework, providing additional capacity to bring down the backlog further. “Thereafter, the answer to being resilient is to automate as much of the simpler applications as is possible. You will hear more about that alongside real backlog reduction.”
Andrew Lloyd, chief customer officer at PEXA UK, agreed that automation in conveyancing “has to be the answer to the volatility – there cannot be a scenario where you ramp up the number of bums on seats and then reduce them again as that volatility recedes”.
CLC chief executive Sheila Kumar suggested that “the very fact that there are peaks and troughs in the market may be a disincentive to people trying to join the profession, because they do not know whether it is a long-term career”. A major challenge is ensuring conveyancing looks like an attractive career.
This remains important, said Henry Hadlow, co-founder of CLC-regulated firm Juno, because “holding an anxious client’s hand” is not something that automation can achieve. And, of course, by removing the routine work, the job should become more rewarding. For Andrew Lloyd, the question was how we get from where we are today, when the role is, say, 20% advisory and 80% administrative, to the other way round.
At the same time, cautioned Mark Montgomery, “an awful lot of clients are very happy to self-serve on more of their case than they do at the moment, and technology can really help with that communication burden”.
Mike Harlow agreed. “You need to unpack anxiety into two parts: ‘anxious because I do not know’ and ‘anxious about something specific’. The most common call to our customer support centre is from people who are represented by a conveyancer but feel they do not know what is going on. That is all most of them need – to be in the picture.”
A key problem, participants recognised, was that clients do not really understand the conveyancing process, which, as Peter Rodd – the residential conveyancing representative on the Law Society council – put it, has become “incredibly complex and detailed, and far more so than it ever was 40 years ago”.
“I did a calculation on the basis of what we used to charge when I started, then index-linked it forward and applied it to the average‑value property in this country. We should be charging a minimum of £2,500 per transaction,” he said. “There are firms out there charging a few hundred pounds and then paying a referral fee out of that. You cannot do the job properly and deliver the correct level of service by charging a pittance and paying your staff a pittance.”
The process is becoming worse, and prices even more distorted, as more responsibilities are loaded onto conveyancers, he went on. “We now have the question of climate. To what extent is the conveyancer going to be responsible to their clients for advising on those issues and the possibility of flooding? There was a suggestion a few years ago that we should tell people about the cleanliness of the air in their area. None of that is legal, but it is all getting pushed towards the conveyancer, because, at the end of the day, the conveyancer is the one who is insured and takes responsibility.”
This in turn extends transactions, because the case law is clear that conveyancers cannot just supply the information to the client – they have to explain its significance too.
Rob Gurney said Landmark estimated that conveyancers’ responsibilities have doubled in the last 15 to 20 years, while at the same time modern consumers expect far greater speed. “The expectation of the consumer is impossible to meet, whereas, 15 to 20 years ago, we could meet it.”
Teresa Perchard, who chairs the CLC’s consumer reference group, suggested there were opportunities for “more differentiation in your service offer between the consumers who are very happy to self-serve and those who need more support”. Firms need also to set expectations very clearly from the outset.
Many conveyancers are itching to increase their prices but remain worried about the impact. Again, they need to explain what they do and ensure the communication is clear. “Be brave and charge for the work that you do,” said Paul Bennett. “My clients who have been brave enough afterwards to raise their fees by relatively modest amounts initially have gone on to raise those fees again and again over the coming years. They are being paid for what they do and are delivering a service.”
CLC strategy director Stephen Ward said it is “the value proposition that has been underpriced”. He explained: “Lawyers have found it very difficult to describe to their clients the value of what they do. You can list out the prices, but what is the value? It is the confidence that you understand everything about it that is relevant to you so that you can use and enjoy that property as intended.”
There will always be some consumers who are driven solely by price and Paul Bennett said those are the ones you don’t want to act for. “They are going to complain and have unrealistic expectations. You want to be acting for those consumers who are going to engage with you, understand the value that you are going to add, and want to pay for the service and the communication.” At the same time, Sheila Kumar stressed, increased costs do not necessarily mean increased quality.
Beth Rudolf, director of delivery at the Conveyancing Association, recalled working with a firm that had a ‘busy’ fee scale alongside its regular pricing. “After two weeks, they were all quoting the busy fee scale, because they were feeling busy, which they always do. They were converting them at the same rate as they were previously and, overall, we were able to put the fees up by £150 in a couple of months, because they were confident in what they were quoting.
“They were able to do that because they could offer the customer service and had enough money to be able to resource the transaction properly, to be available on the phone and to make sure that they had support cover if somebody went on holiday.”
The CLC’s involvement in pricing matters is limited – it is not an economic regulator, after all. Bargain-bucket pricing may raise questions about how a firm is handling matters, said Sheila Kumar, while airline-style pricing – where the final costs are far more than the initial quote after various add-ons – is of particular interest. “There should be reasonable certainty about the costs that you are going to pay.”
Much of this led back to perhaps the hottest topic in conveyancing right now – upfront information. The more that can be provided to buyers at the start of the process, the quicker it can be completed.
Beth Rudolf, who is a participant in the upfront information working group of the cross-industry Home Buying and Selling Group, said that, combined with digital logbooks for properties, qualified buyers, digital ID and AML checks, and binding offers, the process would be quicker still – but one thing at a time.
Konrad Rotthege, co-founder of proptech company Conveyo, which is looking to support upfront information, described it as “key to faster transactions but also to buyers making more informed decisions, which, naturally, will reduce the level of fall-throughs that we see”. Transactions he has been involved in with upfront information went to exchange in about four weeks.
“All the bits are there, but the problem is that we have no mandation – yet,” said Beth Rudolf. But isn’t upfront information the rational thing to do, reducing timescales and risk, and improving cashflow and customer satisfaction? “The problem is competition,” she explained, with some estate agents undermining those trying to push upfront information – which also comes with an upfront cost – by telling consumers they won’t require it (even though Trading Standards is issuing guidance on what is required on this in November).
She despaired at the short termism of such agents, who do not realise the benefits to themselves of getting transactions over the line much more quickly on top of winning and retaining more business.
For Mike Harlow, the core challenge is digitising the data and ensuring it can flow through into everybody’s systems. “If it is suddenly really easy to get at least most of the information that you want, we do not have to think about massive incentive problems.”
What would also help in a comprehensive view of the chain which all parties can see. Why do we not have that, he asked?
“It is in the nuance,” replied Mark Montgomery. “ViewMyChain has been working on this for a while and is making good progress. The base milestones are doable, but maximising participation so that there is more complete chain information is what makes the information more valuable. There is still a job to do to convince some lawyers, who believe it may not be in the client’s best interests to share detailed milestone information with the rest of the chain, that the benefits outweigh the risks.”
Such technology does not work without everyone participating, hence why the Law Society Conveyancing Protocol, required under the Conveyancing Quality Scheme, sets out that the solicitors should share information on the progress being made on related transactions.
There are a lot of initiatives and reforms out there being discussed, so the roundtable concluded by asking what one thing participants would want to focus on and where regulators could help. For Sally Holdway, director of legal compliance and tech company Teal Legal, it was more guidance for practitioners around upfront information. “Lawyers ask, ‘Where has the data come from? Can I trust it? Do I need to repeat it? Do I need to have carried that out?’
“Ultimately, we will get to the point where we have digital information for property transactions which will be instant. We are talking about upfront now only because it is not instant. More education mitigates the risk exposure for practitioners, but providing guidance and signposting would be incredibly helpful.”
Or as Peter Rodd put it: “In a word, ‘liability’.”
Beth Rudolf countered with the need to separate risk and liability. “The risk goes down because the buyer knows what they are buying. The buyer’s conveyancer still has a duty of care to do the due diligence around the buyer’s intended use and enjoyment. That does not change, but the risk reduces, as does the loss.”
For Sam Ruback, general counsel of digital ID and AML business Thirdfort, more consumer education about the checks they are subjected to would help, but “closer working between estate agents, conveyancers, brokers and lenders” so that clients do not have to go through the same checks multiple times was a key priority.
Simon Law, chair of the Society of Licensed Conveyancers, agreed that the digital identity framework and clients owning their ID, and being able to share it with multiple parties at the same time, “will make everyone’s lives a lot easier. It also makes source of wealth checks much easier, as well as the wider adoption of open banking.”
But participants came back to frontloading the sale process. “It is talking about a change in mindset. It is about getting the vendor’s lawyer instructed at property listing,” said Rob Gurney. Henry Hadlow agreed: “I prefer that to the idea of upfront information, because you know who is obtaining that information. They have associated liability.”
The good news, responded Beth Rudolf, is that the Home Buying and Selling Group’s pledges are both for instruction on the day the property goes on the market for the conveyancer and upfront information.
Speaking after the event, Sheila Kumar said: “We have been on the precipice of significant change in the property market for a long time now and some are frustrated that we are still only looking over the edge. But we are getting closer and it was striking how most of those round the table now largely agree on what needs to be done.
“The CLC is part of the Digital Property Market Steering Group, which brings together regulators and representative bodies of conveyancers, estate agents, lenders and valuers to drive the transformation of home buying and selling. We are committed to playing our part and ensuring that conveyancers can deliver simpler, faster, more secure and more certain property transactions that maintain the high standards of consumer protection that we are known for.”