Eddie Goldsmith - Moving With the Times 2011Webinar Transcript
The Industrialisation of the Legal Profession The Perfect Storm and life after 6 th October E R Goldsmith Senior Partner – Goldsmith Williams Chairman of the Conveyancing Association
Who am I and why am I qualified to speak to you today?
Solicitor for 30 years
Partner in firm of Solicitors with 275 total staff, dealing with nationwide, introduced residential property work as our core business.
Current Chairman of the Conveyancing Association representing both solicitors and licenced conveyancers in the UK.
Opportunity to talk to many 3 rd parties across the residential property sector.
The conveyancing market as we know it.
The cottage industry that we know as the legal profession. Some 117,000+ solicitors represented through 11000+ firms.
Big boys of the City account for 55% the total turnover of the legal market but only 2% of the total number of firms.*
84% of legal practices are run by solicitors with four or fewer partners*
Legal Services market account for around 1.7% of GDP (£24.7b 2009)(Financial services for the same period was 10% or £116.8b)*
Solicitors accounted for £14b of the 2009 annual turnover
45% of £14b in the hand of “small” 4 or less partners equates to £6.3b.
Estimated gross fees earned through conveyancing 2010 £1b-1.5b
*research note The Legal Services Market – Legal Services Board August 2011.
HM Land Registry figures
9000 firms recorded applications with HLMR in the last review
3000 of these recorded as 10 or applications in the year
Estimate that 350—600 of firms do 80% of the total.
That number is more like 150 – 250 at most
In reality a significant proportion of conveyancing is already in the hands of these larger firms and this trend is likely to continue
Other factors An over supply of conveyancers? Volume of conveyancing has dropped by 55% over the past few years. Prices – remained static or even reduced over the last 30 years. Technology and the industrialisation of the legal profession Something nasty in the woodshed .
The perfect storm
Recession and some high profile casualties
Rising incidence of fraud and conveyancing complicity - £1b worth of property fraud.
50%of all claims made in PII relate to conveyancing and 50% of those are raised by lenders.
Growing deficit in APR of £ms leaving others to pick up the tab.
The SRA and Supervision and Enforcement Strategy for Conveyancing
SRA’s recent review of Client Financial Protection
FSA’s Thematic Review of Lenders Systems
Are we going through what the mortgage industry has already been though with 60% reduction in numbers?
What are the lenders doing?
Responding to FSA’s review
Charging for panel position
Considering Sep Rep and restricted panels
3 rd party panel managers
What is the Law Society doing
Fighting the corner for solicitors
Putting pressure on the lenders
The solicitors badge
Why do we needs CQS?
What are the current numbers are
What does success look like?
What will happen if not sucsesful?
What do lenders think of it?
What would fill any void?
There is good news Satisfaction rates for conveyancing is “stratospherically” high at 93% fairly or very happy with the service* 51% of clients pick their solicitor either though having used them before or following a recommendation from someone they know* Receiving a recommendation from a friend and “specialising in conveyancing” are seen as more important than providing a cheap quote* The public are less likely to use a solicitor recommended by their estate agent if the agent will receive a commission as a result (although younger people and first time buyers are less like to be hostile to such a recommendation)* *Solicitors Regulation Authority survey of public attitudes toward conveyancing February 2009.
The not so good news
Quality factors do not strongly influence the consumers choice of lawyer and they wrongly assume that legal services are risk-free*
All solicitors are assumed to be technically competent*
Brand is not a strong feature in legal services with more that 60% of the public unable to name a law firm*
Consumers do not know what quality marks signify and that they mean very little as they are seen as marketing tools rather than a genuine symbol of a guarantee.
* Quality in Legal Services – the Legal Services Consumer Panel November 2010.
What to do? Option 1 – Do nothing Option 2 – Retire Option 3 – Sell out Option 4 – Hive off your conveyancing practise. Option 5 – Build it up. Option 6 – Embrace the future and invent the future.