Wednesday, 27 April 2011

PI Insurers pose greater risk to conveyancers than new SRA proposals?

There are changes afoot with the Solicitor Regulatory Authority’s plans for conveyancing firms.  During the course of the year the SRA will be carrying out a major review of the regulation of Solicitors undertaking conveyancing and the holding of client money because of the risks posed by a small number of firms engaged in property-related fraud and money laundering.

The thrust of the proposals is to ensure conveyancing firms take seriously the risks and establish good compliance and risk management systems.  I am sure that those firms who take conveyancing seriously will already be taking these risk seriously of not by choice by reason of pressure from their PI insurers.

The Strategy is due to be published in October and will operate alongside the Enforcement Strategy published on 13th January 2011. It will set out how the SRA will engage with firms to ensure that the procedures etc comply with the Principles, achievement of the Outcomes in the new SRA Code of conduct and compliance with the new Handbook.

So why is there a need for a strategy?  Well believe it or not but Conveyancing claims represent about 50% of the value of professional negligence claims. Payments made by the fund have more than doubled over the last few years, tying in with the downturn in the property market.

So how will the SRA will engage with the profession and other stakeholders to ensure it gets the approach to the risks posed by conveyancing correct?   We are told The SRA will draw on the information and experience available (through the Law Society), clients (including lenders) and insurers.

If issues are identified the SRA will work with firms to put matters right and it suggested enforcement action will be a last resort.  The Strategy indentifies the issues that the SRA will be looking to identify and which include:

• Conflicts of Interest
• Referral Arrangements
• Costs Information (including publicity about fees)
• Financial Stability
• Property Related Fraud and Money Laundering
• Acting for Buyer and Seller
• Acting for two Buyers in a Contract Race
• Acting for a Buyer and Lender where the Lender asks a firm to go beyond standard Instructions
• The potential Conflict between duty of disclosure and duty of confidentiality when acting for Buyer and Lender

Firms will be expected to assess these and other conflict risks, and ensure that the systems are in place to identify and mitigate the risks.

The Firm’s referral arrangements will also be under scrutiny. We will be expected to assess these and other referral risks, and ensure systems are in place to identify and mitigate the risks presented by the following:

·       Valuable referral arrangements could compromise a firm’s integrity, professional judgement or independence.
·       Reliance on one-third party for a high proportion of conveyancing work could impact upon its financial stability.

The provision of cost information is another high profile area of the Strategy. Firms will need to ensure that their fees and costs are fairly expressed and not misleading.

Concerned about how financial instability could make firms more venerable to inappropriate pressures the Strategy will be focusing on the identification of firms who only do conveyancing or a significant part of their income is as a result of doing conveyancing.  These firms will need to consider what systems and controls to put in place for monitoring their financial stability and economic viability.

The Strategy will also take the opportunity to review the risks associated with property related fraud and money laundering because a large proportion of the value of payments from the Compensation Fund represents payments related to fraud in connection with conveyancing.

Firms will need to determine what policies, procedures, systems and controls they should put in place to minimise the possibility of being targeted for criminal activity. Again this seem to be re-emphasising the risks and need for processes that we have all had to live with and act upon for some time now.  I question whether there is anything new here.


So what tools will the SRA use to indentify these risks? The SRA will use a variety of strategies and tools to test the systems and controls firms put in place to address the risks they face.

The systems and controls will differ depending on:

• The size and complexity of the firm
• The nature of the conveyancing work undertaken (e.g. e-conveyancing)
• The firm’s client base (e.g. are clients local or national)

The tools and powers will include:

• Desk-based reviews
• On-site visits, including interviews
• Use of formal investigative powers, including requests for documentation and attendance of individuals at formal interview
• Obtaining documents or information from third parties, including law enforcement agencies
• Mystery shopping
• Thematic visits

The SRA has produced a transition manual “OFR at a glance http://www.sra.org.uk/solicitors/handbook/ofr-quick-guide.page. It contains Q & As on ethical dilemmas etc. It is not intended to replace or be a substitute for firms’ own internal procedures.

Overall there is not very much new within this consultation document; much of what is proposed reflects the risk assessment that many of us are now required to undertake as part and parcel of our PI insurance application.  At the end of the day it’s the PI insurers who hold all the cards and who will clearly irrespective of the SRA’s moves  determine the fate of many conveyancing practices.

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Tuesday, 19 April 2011

Norfolk Solicitors launch low cost on line tracking system for home movers

MJP announce the launch of their very own online case management system – www.quickconveyance.com


We now offer home movers and agents the ability to track the progress of their sale and purchase transactions on line.    Quick Conveyance has been designed and built by us to ensure easy navigation and the ability to check in on your case progression from home, the office or on the move.  It is accessible 24/7 and the good news it is FREE and comes as part of our low cost home moving service.  For further details please email davidpett@m-j-p.co.uk


Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

What does conveyancing have in common with air traffic control?


Speed is at the forefront of most home movers’ minds.  They have decided to move, they have found a buyer and their only concern is to make sure they can take ownership of their new home by the next day. 


There is nothing wrong with this and I would be the first to admit that when I moved my mind was engaged with a similar thought. 

The difficulty this mind set causes however is when, as is happening more and more, this begins to impact on the relationship between client and lawyer.

I always tell my clients that until a transaction is underway it is hard if not impossible to estimate how long it will take to complete.  There are a multitude of problems that can crop up along the way.  Added to this is the difficulty a chain of transactions can cause when one has little control over the activities of others. 

For those paying by cash some of the delays can be avoided, but when there is a mortgage involved it is simply not possible to take short cuts, and despite claims of having to move in on a certain date to avoid sudden death, it is important to stand up to clients and make it known that sometime for very good reason it is not always possible to meet their expectations.

Often clients are so focused on the move that they become oblivious to the legal hurdles that need to be overcome to ensure the home they are buying or selling can be transferred without legal defect or other issues that could affect their enjoyment of the property.   Managing expectation is what a good conveyancing lawyer knows well; providing a balance between service and speed is the key.

In our conveyancing department we take care to keep clients informed and have recently introduced a very simple but effective case management system (www.quickconveyance.com) designed (in house) to allow the client to gain online access to documents and journal notes. It also allows selling agents to track progress online. 

It has been well received and has led to a cut in telephone enquires from both clients and agents.

Handling a large number of transactions is akin to bringing in aeroplanes at a busy airport, providing there are good organisational skills and IT systems, there should be no difficulty in making sure transactions can complete speedily without the fear of crash landing. 


Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

Have you heard the one about the lawyer, accountant, banker and of course the Legal Services Act?

Put a group of lawyers, accountants and bankers together mix in some good food and drink and with a bit of luck you will generate an evening of lively debate. 

This is exactly what happened when I was invited along to a dinner hosted by a high street bank and a nationally known firm of accountants.   The purpose of the informal gathering was to debate the future of the legal profession in the light of the never-ending changes and challenges that lie ahead.

Putting to one side the countless opportunity seized by many to self congratulate, and ignoring in the main the sales pitch by the hosts, I was intrigued, and indeed surprised, by the differing views around the table on the changes that will occur once the Legal Services Act is fully implemented in October.

By way of background, many of the lawyer participants were from medium sized firms leaving my firm as the only three-partner firm in attendance.  The majority of these firms have in recent times become LLPs and much of the discussion (the dull part) centred on how these firms have put in place corporate structures to provide management. One firm was smitten about its decision a couple of years ago to bring in some high flyer from London to take on the role of Chief Executive.

Listening to these firms it occurred to me that many were so embroiled in trying to emanate the larger City firms they had to a large extent become oblivious to the bigger picture.  It may have been professional pride getting in the way but not one of these firms seemed in any way perturb by the inevitable challenges that will arise with the full implementation of the Legal Services Act.  One of the representatives actually popped up and announced that there was nothing to worry about! He expanded on this by saying like many of these ‘things’ it will all blow over!

I am not sure whether this reflects arrogance or a reckless disregard of the threats.  Perhaps it’s a bit of both.   The most worrying aspect was that the view expressed had the support of the majority of the legal attendees.  It was clear however that the banks and accountants are not so confident. There was much discussion around the table on how banks are beginning to tighten the screw on legal practices.   Firms with working capital deficiencies and succession issues now seem to be regarded as ‘high risk’.

The sudden change of fortune for  a certain large Manchester based practice that was forced into liquidation and the ramifications for its bankers, has clearly made banks look more closely at the balance sheets of law firms.  Add to this the uncertain future many high street firms face with increased competition and Jackson and the future does not look too good, particularly for the smaller firms.

The time to take ones head out of the sand and to give recognition to the threats posed by national brands with deep pockets to fund marketing is now. It is a sad indictment, and a very worrying one, that there are still a large number of lawyers out there who have yet to take any steps to protect those services that will inevitably become post Legal Services Act commoditised. These will include conveyancing, wills and personal injury.  We already know that SAGA, AA and the Co-Operative have plans to market services direct to the public, and more recently Quality Solicitors has agreed a deal with WH Smith to allow representatives to be in store to provide legal advice.

However wonderful we may believe we are, the fact is that those with legal problems who once would come through our doors, will without doubt be lured away with the power of national advertising and the attraction of low fees and perhaps even ‘club points’.  We live in a world where money is sparse, where people are looking to make cut backs in spending, to believe as some do that a good quality service will always ensure a client’s return, is, delusional.  Client loyalty is about to face its biggest ever test.

So you might ask what are we doing to prepare.  We are looking to establish a local co-operative to produce resources to run a campaign to keep work local and to look at ways of sharing services to reduce overheads.   The scheme has the backing of local banks and accountants have designed the financial model.  I am sure it will work and prove successful, however if it does not at least I can say that we have tried to do something.  Doing nothing cannot be an option.

Back to the dinner…. Great food and a fantastic insight into how divided our profession has become.


Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk