The amount of conveyancing work being undertaken by legal practices and conveyancers in Britain has risen 15% over the last year.
A national survey of conveyancing and legal firms by property search provider SearchFlow found the majority of solicitors have seen their conveyancing workloads increase over the last year. 59% of firms reported a rise over the last twelve months while only 7% have seen levels fall.
The rise in workloads is in contrast to the number of property transactions taking place in the market. According to the latest Land Registry House Price Index, sales volumes are down 3% year-on-year.
Nearly three quarters (73%) of firms said that increased legal practice compliance has led to a rise in the amount of work their businesses need to do in order to maintain their standards. Only a fifth (22%) of firms have bolstered resource in order to meet the increased requirements. Nearly half of firms (46%) are managing this increased workload with the same resource.
Marshall King, chief executive of SearchFlow, said:
“The fact that firms are not yet taking on resource indicates that the recovery is still seen as fragile. The combination of the rise in workload and increased compliance requirements mean firms need to ensure their processes and procedures are as streamlined and efficient as possible ”;
Threats to Business
More than a quarter of solicitors and conveyancers (27%) expect the main threat to the industry in the next twelve months to come from lenders’ panel selection decisions. Despite initial fears regarding the introduction of Alternative Business Structures (ABSs), legal firms don’t yet regard them as an immediate threat. Just 13% of firms felt ABSs were a significant threat to their business.
A fifth (21%) felt the weak property market posed the greatest threat – a threat that might increase should artificial props such as low interest rates and Funding for Lending be removed. 15% felt the increasing cost of insurance would have the biggest impact this year.
Greatest threats in next 12 months
|Weak property market||21%|
|Increasing cost of insurance||15%|
|Competition from ABSs||13%|
|Commoditisation of legal services||13%|
|Increasing risk of liability||11%|
The low proportion of legal firms that see competition from ABSs as a significant threat is reflected in the year-on-year change in the proportion of firms who are considering becoming an ABS, however, it appears the majority are undecided on what to do regarding their structural status.
In 2012, 21% of firms said they would consider becoming an ABS. This has fallen to just 11% in 2013 with a quarter of firms (25%) saying they won’t consider it. However, the proportion of firms undecided about their future has increased significantly, from 36% saying they didn’t know whether they would become an ABS in 2012 to 63% in 2013.
Marshall King, said:
“The fact that Panel selection and market weakness is top of mind for many solicitor firms probably indicates that security of incoming business remains the overall top concern – which reinforces the lack of clear confidence in the market recovery”