What does the future hold for conveyancing
What does the future hold for conveyancing How will changes in the conveyancing sector help (or hinder) estate agents These questions and many more were debated at a recent roundtable discussion sponsored by myhomemove at the Modern Law Conference, which was attended by representatives from estate agencies, lenders, conveyancing providers and myself.
One of the most lively discussion points focused on whether improvements in technology would lead to consolidation in the sector, or whether it would instead empower more solo practices of the profession and lead to an even more fractured industry. Currently a large proportion of the conveyancing market operates as a cottage industry. For example, a fifth of the firms active in conveyancing last year worked on less than one completion per month. Over three quarters of firms that offer conveyancing employ the equivalent of less than one person to do conveyancing.
Estate agents have a significant interest in how the industry develops because of the importance of fast and accurate conveyancing that speeds up their pipeline of completions.
Those who thought the industry might fracture broadly agreed that better use of technology could empower smaller practitioners and boost their capacity to work for a number of clients across wide geographical areas. The experience in Australia was referred to several times, where the number of sole practitioners has increased substantially as a large cottage industry has developed. Many of these sole practitioners are younger conveyancers who rely heavily on case-management systems and other technology to operate efficiently.
The alternative view, which is one that myhomemove subscribes to, is that the market is set to see greater consolidation among providers. One of the key reasons for this is that conveyancing is an expensive service to offer, with the cost per transaction particularly difficult to shoulder for smaller operators or part-time conveyancers who can't benefit from economies of scale. Costs like professional indemnity cover mean that fewer firms will want to offer conveyancing unless it will be a core part of their service. Consolidation is likely to accelerate as smaller firms look to share overheads.
My personal view is that the industry is at a turning point and we could see the number of firms that offer conveyancing fall by as much as half over the next ten years.
Recent market trends seem to confirm that consolidation is the way in which the industry is heading. A recent conveyancing market tracker from Search Acumen found that since the financial crisis larger firms have taken a growing share of the work. The top 200 firms increased their market share from 26% at the peak of market in 2007, to 36% now. A lot of this will be down to some conveyancers deciding to call it a day, but consolidation is a factor too.
Whichever direction the market does end up taking, the challenge for firms offering conveyancing is to meet the demand from customers for a rapid service, driven by the kind of technology that is leading the way in other sectors whilst maintaining the personal touch that modern consumers continue to value highly.
Ultimately, estate agents will continue to need reliable partners - whether large or small - who they can work with effectively to make sure that transactions go through quickly and smoothly.
*Mark Montgomery is Customer Strategy & Marketing Director at myhomemove
Comments