The average number of cases handled by conveyancing firms continues to soar to near-record levels despite a slowdown in transactions during recent months, new research has revealed.
According to Search Acumen’s latest Conveyancing Market Tracker (CMT), caseloads increased 9% quarter-on-quarter between Q4 2022 and Q1 2023. This comes despite transactions falling 29% between December and February.
All of this means the average property law firm now handles 84 cases a quarter – more than double the average caseload a decade ago and the second highest average caseload per quarter since records began in 2011.
This is according to Search Acumen, who noted an 8% dip in the number of active property firms during the last decade with the average number of cases per quarter rising 93% in the same period.
These shifting market dynamics, they say, have increased pressure on conveyancing firms, whose average quarterly caseload in Q1 2013 was just 40.
The fact that caseloads remain near historic highs, despite the challenging economic conditions, reflects the ongoing imbalance between total case volumes and the number of active firms available to handle them.
While active firm numbers have now recovered to pre-pandemic levels – increasing by 2% from 3,961 in Q1 2019 to 4,045 in Q1 2023 – this rise falls far short of enabling firms to keep pace with the scale of long-term growth in caseloads, says Search Acumen, who suggest there is an “imbalance” between total case volumes and the number of active firms available to handle them.
“Even though market activity has slowed in the current economic climate, processing backlogs create a compounding effect, meaning caseloads for property lawyers still remain high by historic standards. This brings about a paradox in that law firms remain incredibly busy almost regardless of wider market conditions,” said Andy Sommerville, Director at Search Acumen:
“Law firms, along with Land Registry and the tech sector, have made great strides in adopting and implementing new technologies to tackle historic backlogs and speed up the process for future transactions. This is having an impact, but more is needed given the sheer scale of the task at hand.”
Market consolidation on the up
Search Acumen’s data also revealed Q1 2023 saw the market share of the top 100 firms hit 30%: a level only reached once before, back in 2012.
Since records began in 2011, the top 100 firms have increased their market share of conveyancing work by seven percentage points from 23% in 2011 to 30% in 2023. In contrast, the market share for firms outside of the top 1,000 has fallen by 10 percentage points since 2011 when it stood at 34%, compared with 24% in Q1 2023.
In the last two years alone, the top 100 firms have gradually gained market share with an increase of 27% to 30% since 2021.
Andy Sommerville said:
“The last decade has seen rapid advancement in new technologies and larger firms have the resources to invest earlier, gaining first mover advantage. Particularly over the last few years, early tech adopters have been able to capitalise on their capabilities to bolster market share through the volatile years since the pandemic while these conditions have been more challenging for SMEs. Ultimately though, technology levels the playing field and, as the cost of transformative technology like AI comes down, these tools become more accessible, providing more opportunities for smaller companies to gain a foothold. We are already seeing this happen with large language models like ChatGPT which are being explored by companies of all shapes and sizes.”
