A big battle is going on in the conveyancing market, as commercial firms use their technological might to wrestle market share away from smaller, local firms. But the game is not yet up for the high street firms: technology is giving them the means to combat their large rivals.
Electronic delivery of services is a major aim for many law firms. Conveyancing has led the field, in part because of the Government’s drive to streamline the housebuying process. The most significant aspect of this has been the National Information Service (NLIS) search facility, which aims to provide online access to all the land and property information needed in the conveyancing process.
At the same time, large firms such as Hammond Suddards Edge, and Eversheds have been streamlining their own conveyancing services to make them cheaper, mainly by ensuring that most of the processes can be handled by paralegals rather than expensive lawyers.
“Electronic conveyancing is making a big impact,” says Damian Griffiths, IT director of Addleshaws, which has been running its Enact online service for the past 16 months. “This is partly because a lot of things are coming together at the same time. Low interest rates mean that, even if people are not buying and selling, they are remortgaging and technically we now have the right systems and processes.” This includes state-of-the-art web technology, backed up by a case management system written by Addleshaws’ in-house IT team.
All this adds up to an onslaught on the high street
conveyancing business by a handful of big names. But Griffiths thinks high street firms, while under fire, need not despair. “High street firms will still win a lot of business,” he says. “We have to compete to woo people away.
While all the major firms will steal market share, whether they will wrap up the market remains to be seen. There are still a lot of people who will go to the high street.”
Hammonds Direct has been running an online
conveyancing service since spring 1998. Aimed at the big mortgage lenders, the service is part of a wider push towards direct service on the part of its owner, Hammond Suddards Edge. It handles about 5,000 completions a month, of which 80% is remortgage business.
“When we launched this, we would have wanted about 60% of the business to be remortgage and the rest to be made up of single purchases, particularly first-time buyers, but that is taking longer, mostly because the remortgage business has been so successful,” says Achilles Hatjiosif, business development director at Hammonds Direct. “The key for large firms is putting the product infrastructure and people in place first, before designing the fancy online bits and the more digitisation in the back office, the better.”
Like Griffiths, Hatjiosif thinks smaller firms, while under increasing pressure, will still have plenty of business. “We are not going to have 50% of the market or anything like that,” he says. “We are aiming at low double figures for the four or five big firms providing online services. Smaller firms cannot afford the same kind of investment as the large firms, but they will benefit from the Government’s moves, such as the NLIS, which will force them to improve their services.”
Hatjiosif also thinks some high street firms will stay out of the technology race. “Some firms will not pick up on this and will continue traditional conveyancing, probably until the day I die,” he says. “They provide value services and the local comfort factor.”
Not all the technical pieces of the online conveyancing jigsaw are yet in place. The NLIS hub system, which is run through three commercial providers – MacDonald Dettwiler, Searchflow and TM Property Services – is only now going live. Only one-quarter of local authorities are hooked up to the hub electronically – a key part of speeding up searches. But take-up has been “encouraging”, says Mark Riddick, chief executive officer of Searchflow. One potential concern in moving to online conveyancing is the security of documents, but Riddick says this should not deter anyone from using the service, pointing out the risks in sending documents by courier or allowing unsupervised cleaning staff into lawyers’ offices.
TM Property Services, one of the other firms about to launch its NLIS service, is also developing a wider portfolio of online services. “NLIS is one bit, but there is a real challenge in streamlining
conveyancing,” comments Richard Goodwin, business development director at the firm. “We have to improve communications and collaboration between all parties involved. There is other technology, such as online mapping and commercial information sources, which go into the realm of sellers’ packs and the ability to find out all the necessary information upfront, not 10 weeks into the house-buying process.”
It will not happen overnight. Opinions differ on how soon a critical mass of high street law firms will be hooked up to services such as NLIS. Some think it could take up to seven years; others believe the process will be much quicker, mainly as a result of pressure from lending providers. “One of the drivers to push this change forward could be a lender telling a law firm to use the system, because that is the way they do business,” Goodwin says.
Steve Mason is senior partner at Mitcham-based Mason Collins, which is about to go live with the TM NLIS service. “All you need is an internet connection,”Mason points out. “There is no software involved.” A scanner is needed to scan in plans where necessary, but the rest of the system is accessible via the TM website. “It does not cost anything in installation terms and you no longer need hard copy, you do not have to attach cheques and you do not have to post documents,” says Mason. “Electronic conveyancing is the method of the future. The Land Registry is behind these moves and having this information online is the way forward.”
Mason says there is still some way to go in providing a fully online service, but he is enthusiastic about the existing technology and its potential, particularly for smaller local firms. The system is geared to Land Registry basic searches, but the plan is to expand that and open the system to all parties, including estate agents and mortgage lenders, which will be able, via a password-protected system, to gain access to the transaction information.
Mason sees this as a step forward for small firms, enabling them to provide their clients with the same kind of service that the big firms provide, without the same kind of investment overhead. “Quite a lot of firms are installing their own systems, but it could be a waste of time. Once there is a public system via the TM site, which
is effectively free of change, small firms will be able to enjoy the benefits,” he points out.
Electronic conveyancing: getting started
The Law Society has welcomed electronic conveyancing, which it describes as one of the most significant changes to affect conveyancing for the past 75 years. It has been involved in setting up the National Land Information Services (NLIS), which forms the cornerstone of the move towards full online conveyancing, and is running a series of seminars around the country to look at the impact of electronic conveyancing on solicitors and their clients.
One of the speakers at the seminars is Kenneth Byass, treasurer and chair of the Law Society’s e-commerce working party, who is closely involved in the Law Society’s working party on the Land Registration Bill and discussions with the Government on potential reforms of the home-buying process. “This road show is to tell solicitors that the system is there and they should use it, because ultimately it will be for their benefit and for the benefit of the public,” says Byass.
The main message from the Law Society is that high street firms should start preparing now for electronic conveyancing. The main advice for high street firms is:
