Panel selection is greatest threat to conveyancing
Almost one in three solicitors (28%) expect the main threat to the conveyancing industry in the next year to come from lenders’ panel selection decisions.
A national survey of conveyancing firms by property search provider SearchFlow found that more than half of conveyancing firms (51%) believe the recent controversy over panel management has caused lenders to worry more about fraud, and this will have a potential impact on business levels.
However, at the same time solicitors report that despite initial fears alternative business structures (ABSs) have not made an impact yet, with the threat of competition from ABSs (14%) ranked behind a weak property market (22%) and the increasing cost of insurance (15%).
When questioned as to how they plan to adapt to the arrival of ABSs 48 per cent of conveyancers said they would be making no changes to their business, with 15% saying they would be increasing their marketing spend. Only 12% said they would change their practice areas and just 10% said they would begin to offer fixed fees.
Just 21% of conveyancing firms say they would possibly or are definitely considering becoming an ABS in the next 12 months. Most firms say they will not consider becoming an ABS, although more than a third (36%) say they still don’t know.
The lacklustre housing market and fears over the impact of the Legal Services Act have polarised the industry, with 47% of firms reporting an increase in business in the last year but 18% reporting a fall. At the top end of the scale, 21% of the most successful firms say volumes have increased by more than 10%.
Richard Hinton, business development director at SearchFlow, said: “Despite initial concerns as to the impact of the Legal Services Act, in terms of the licensing of new forms of legal practice to deliver legal services it appears to have made little difference so far.
“Fears that it would undermine the quality of advice appear to be unfounded, and while it is still early days the more immediate issues are panel management and the weak property market.”