Biggest threat to small firms is the reduction in lender panels

Biggest threat to small firms is the reduction in lender panels

Today’s Conveyancer were recently able to ask Lisa Draper, Partner at Attwells Solicitors LLP, a few questions about the challenges currently facing the profession.

Attwells, a three Partner practice with offices in Ipswich, Suffolk and St Johns Wood, North London, say that conveyancing accounts for over 50% of the firm’s revenue with the Ipswich undertaking the largest number of transactional conveyancing cases within the region.  Attwells constantly strive to improve their service by undertaking an online survey of every client’s experience, ensuring that client care levels are always monitored.
Lisa became a Partner in Attwells in 2008, after qualifying as a Solicitor, taking the ILEX route of studying whilst working full time and feels that, for her, this was a far better way of becoming a Solicitor. 
Lisa commented:
“It allowed me to further my career and education at the same time and it also shows Attwells’ commitment to further the careers of its staff with no ceiling on personal development. 
I have been managing property departments for the past 7 years which is challenging in a turbulent market but very rewarding."
We asked Lisa how conveyancers have fared, in Ipswich, with the downturn and she had this to say:
“Ipswich is like most market towns which have general Solicitors practices and whilst times have been tough in the property market, with most firms seeing a reduction in the number of conveyancing transaction that they deal with it has not affected the overall solvency of these practices but has seen redundancies and a reduction in the size of their residential departments. This has not been the case for us where, although growth has been difficult, we have maintained our size over the last 2 years.”
Everyone has pet hates with conveyancers and Lisa is no exception, citing hers as conveyancers who wait for everything, searches, replies to enquiries, mortgage offer etc. and then report to their client.  “Reporting as you go is much more client friendly as your client is receiving small amounts of information throughout the transaction and can see some progress being made.  This type of reporting can delay exchange by up to a week.”
When asked If you could influence it, what would you do to change the process? Lisa said “The use of insurance products to be more common place and for it to be accepted practice not to try and resolve legal and title issues but to insure them as far as is practicable and to report as you go.”
We also asked How are you facing the big challenges of ABS/separate PII for financial lenders and what are your views on lenders panels?
“I don’t believe that ABS will have the big impact that everyone is predicting it will have on firms that undertake conveyancing.  It does not work to de-skill people and commoditise the conveyancing process with the use of sophisticated  IT system, there are just too many exceptions to the rule to make this work and over the last year we have seen the large “conveyancing warehouses” go into liquidation.
The margins in this type of work are extremely tight but still require a high level of legal expertise to extract a profit and, in a lean market that is very hard work.  I can not see that this would be an attractive proposition to investors as the investment is in the people and this makes it high risk as you can not move away from it being people orientated.  A firm is as only as good as the people it has sat in it.
I don’t believe that there will be any big new entrants into the market, but rather that big brand names will use their brands as marketing vehicles for legal services which will see a rise in the referral type arrangements that currently exist in our market place.
I think the biggest threat that small firms are currently under is that the lenders are reducing their panels, for no apparent reason other than the level of transaction that you have dealt with and the possibility of this work sitting outside of PII.
I think that we may be moving towards a two tier system whereby a handful of specialist firms are capable of acting for “lender only” with buyers having their own separate representation.  In an already difficult market this would result in transactions taking longer, increased costs to the buyer having to cover two sets of legal fees and will, or could, suppress the already decreasing number of transactions.  The alternative is that smaller firms will just cease to offer conveyancing because if you have to out source your lender work then there just isn’t enough margin to make a profit.”
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