To say that the last few months have been ‘interesting times’ in the legal sector would be something of an understatement. As we approached the end of 2013 the big issue facing legal eagles were the problems encountered by many firms in securing their professional indemnity insurance (PII). This had reached crisis point and, with the former safety nets no longer in place, firms were having to face up to the fact they could no longer practice and would have to wind down.
This is clearly not a great state of affairs for the legal profession and it was seemingly exacerbated by the fact those firms who would have to close were not known publicly. The Solicitors Regulation Authority (SRA) finally moved to change this when, in the middle of January, it finally published the names of all 136 firms that were being forced to close because of their lack of PII.
This was unprecedented from the regulator given that it is up to firms themselves to inform their clients of the situation however the SRA, one suspects, felt that the sheer number of firms and therefore the potential negative consequences for consumers and others would be too much, and therefore a list of firms is now available from the SRA website. A quick glance will show you that firms right across England and Wales have been affected.
Of course, whilst you have to feel for the owners and staff, it is perhaps the clients who are placed in the most difficult of positions and I suspect there will be many open cases which will need to be moved and restarted again with different firms. Delays are inevitable. Certainly, in our field of conveyancing I suspect there will be a large number of cases which will need to be transferred or picked up by other firms in order to take them through to completion.
For many months, I have banged the drum about the changing face of the conveyancing sector and this PII situation appears to solidify my belief that our market is continually moving to a ‘big is beautiful’ approach. Looking down that list of 136 firms it will be obvious to all that many of these practices were small operators, and in a conveyancing sense, this type of operation is looking increasingly unsuited to the demands of today’s conveyancing marketplace.
The first point to make is that conveyancing is now a specialist service. Where many moons ago, high-street operators could have muddled their way through a case and not needed dedicated individuals, nowadays this is no longer the situation. In order to be speedy and effective, you need resource and you need an operation that is equipped to take high volumes of cases in order to make the necessary margin.
Large conveyancing specialists have evolved out of the marketplace and their growth has meant that the work of the smaller firms comes under greater pressure and scrutiny. No adviser in their right mind would recommend a firm with a reputation for slowness and a lack of resource and expertise to get the job done, which is why the so-called ‘warehouse’ operations have prospered.
Certainly, as the mortgage and housing market continues to grow the need to use the bigger operators will become even more necessary because it will only be those firms who are able to meet and complete within the timescales anticipated by clients. Again, one would wonder about the mentality of a broker who would allow a client to go with a high-street operator who has no history (or chance) of meeting the exchange date that the client is banking on? It would not be good for the client or the broker.
Therefore, there is a real need for advisers to make those types of interjections with clients to stop them making conveyancing mistakes. Advisers should not be leaving clients to their own legal devices, instead take control of the situation, make the recommendation yourself and give you and your client a much better fighting chance of meeting the required timescale. In order to do that my belief is that you will need to use a distributor like ourselves who can help manage our panel’s resources and ensure the business goes to those that have the experience and can cope with both the market and the case.
In this market small I’m afraid is no good – it is time to go big or go home.
Harpal Singh is managing director of BrokerConveyancing.co.uk
