Volume business model in Conveyancing, why it is gaining popularity over the high street firms
by Heat Recruitment
It may not be a process that most individuals enjoy, but the purchase and sale of property has been providing high street solicitors with a steady stream of transactional work since the Law of Property Act was enforced in 1925. In the decades that have passed, conveyancing has remained the bread and butter of local legal practices; each of these boasting a simplified transaction and a smooth move for their customers.
However, thanks to the onset of the digital age, regulatory change in the profession and a significant shift in the market, the high street firm’s supreme reign has fallen in favour of what’s commonly known as ‘factory conveyancing’. With the arrival of alternative business structures, which allow non-lawyers to manage law firms, an almighty wave of licenced conveyancers descended on the market to capitalise on the opportunity that the digital world provided and snatch the conveyancing crown from the high street practice.
With money being so tight in the current economy, the fees associated with local law firms have pushed many individuals into the arms of factory or ‘bulk’ conveyancing businesses who are able to offer a reduced cost on property transactions thanks to a lack of overheads. Rock-bottom quotes from these firms naturally draw in the crowds as they undercut their high street counterparts through their ability to process straightforward transactions in a systemised, low-cost manner.
Not so long ago, conveyancing accounted for around half of the legal profession’s income. Today, it is roughly less than 10%, despite the fact that most legal practices in England and Wales register at least one property dealing at the Land Registry each year. In 2017, MyHomeMove and Countrywide Property Lawyers handled more property transactions than any solicitors’ practice: this certainly illustrates the seismic shift that has taken place.
Transparency means business
Of course, cost isn’t the only selling point that these factory conveyancing businesses have on their side. While high street firms offer legal expertise and local knowledge, a lack of transparency in regard to cost has caused a sense of uncertainty and unease among property buyers and sellers.
According to a recent study from the SRA, customers are more likely to make ‘good financial decisions’ when prices are more readily available: a trait which is not very common among high street law firm websites. Some 62% of respondents stated they would select the ’best option’ when prices appeared on a website homepage, compared to 57% when prices had to be sought by filling out an online form.
Services provided by volume conveyancing firms, where prices can be fixed from the outset under ‘fixed fee’ or ‘no-move, no-fee’ agreements have inevitably influenced the decisions of customers who have long yearned for a clear cost before embarking in their property transactions.
That said, factory conveyancers are not free from criticism. In fact, since their arrival on the residential property scene, the Legal Ombudsman has received a shedload of complaints in regard to the poor service that many customers have faced in their experiences with these volume conveyancing businesses. In fact, their recent report on the subject acknowledges that such innovative services can be helpful, but warns they are ‘not without risk’. It expresses concern that by concentrating exclusively on volume, some bulk conveyancing businesses are failing to provide a reasonable service.
In truth, the problem is not with the business model itself, but usually the amount of work being taken on by the conveyancer in question – be they a member of a high street firm or a so-called ‘conveyancing factory’.
With cost being a crucial motivator of any purchasing decision, it’s natural that online services such as MyHomeMove have grown in popularity. However, when selecting which firm to use for their property transactions, clients must be sure to do their research and be wary of the potential risks that lie ahead.
For a career in the Legal industry get in touch with Heat Recruitment today.
by George Chapman