A new online conveyancing portal purporting to simplify and speed up the house-buying process, has entered the final stages of development and is scheduled to be launched to the conveyancing profession in Spring 2015.
The new online service, called Veyo ( named after a small town in the US?) , is a joint venture between The Law Society and Mastek UK, a global IT solutions specialist.
Its aim is to bring together all the processes from client instruction to completion, including checks and documentation prepared and undertaken by solicitors and licensed conveyancers in the sale and purchase of residential properties.
At its recent launch there were some bold statements made about this new system
“Veyo will shift the balance of power and give the profession greater control.” Jonathan Smithers, Vice President, The Law Society
“Veyo will transform the way we do conveyancing.” Desmond Hudson, Chairman
“Veyo will be secure, efficient and transparent” Elliott Vigar, CEO, Veyo
Conveyancers will be asked to pay a licence fee and a charge per transaction. The likely costing will be announced later this year, with a view to getting firms signed up from January 2015 onwards.
To justify the charge being the industry is told that Veyo will “reduce your costs of undertaking a conveyancing transaction and, fatten your margin.”
A staggering £10million pounds has, or will have been invested in developing Veyo with the Law Society setting up a company to develop the system owning 60% of the shares and Mastek UK holding a 40% interest.
Money well spent?
Only time will tell but one must question the size and safety of this investment when it was not too long ago that the Law Society was left with egg on its face when its joint venture with MDA Advantage to produce a Home Information Pack offering became one of the most famous IT debacles of recent times. The cost of that project failure has never been released but it is clear that a sum not too far off that already spent on developing Veyo was lost.
Spending such a large amount of members money on a project which claims to be there to support the CQS Protocol also begs the question whether the money would have been far better spent on looking to reform an antiquated conveyancing process ( last reformed in 1925) and or on extra staff and other resource for a Scheme which is clearly buckling under its own success. Why run with a new project and look to advance this with haste whilst there remain major cracks in the infrastructure of CQS?
It is evident from speaking to some major conveyancing IT providers that the offer of making existing and proven systems available to the Law Society when the idea was first mooted, was not well received. In fact the feedback is that quite a number of those technology companies were given the ‘cold shoulder’ in a way which had caused much alienation. Its surprising that the Law Society chose not to go to a recognised supplier but instead decided to re invent the wheel and in the process spend a large chunk of money which could have been utilised on a far more deserving project.
My firm decided back in 2011 to invest in our own technology and with one developer we were able to develop an online conveyancing case management system which I know performs 80% if not more of the functions which Veyo say it will be offering. The cost of our investment baas peanuts in comparison. I acknowledge the Law Society is looking for robustness and security and I accept this accounts for part of the cost. However there are plenty of Technology providers out there who could have delivered at a much reduced cost.
There must also be some concern over the commercial aspects of the ‘partnership’. Like many of these joint ventures the actual terms of the arrangement will not be made public even though a large chunk of the investment has come from the Law Society's members. One thing for sure the commercial partner will not be making a hefty investment without assurances that the project will be providing its shareholders with a sizeable profit within a reasonable amount of time. This means Veyo will need to pay for itself within 12 to 18 months and much of the early revenue will be dependant on a heavy take up of the system. It will also probably mean a high license fee and transaction cost.
The dependancy on licence and transaction fees must give rise to the fear of ‘lock in’ arrangements with the CQS sitting at the top of the tree. How long will it take before all CQS members will be required to renew and or apply for panel memberships through Veyo? Making membership of Veyo as a pre - requisite for joining or continuing with CQS must also be announcement waiting to happen.
On top of this we will soon surely see restrictions on the use of third parties through Veyo. It will clearly follow that only preferred suppliers of ID checks, Searches will be available to the users of the portal. To make money and to ensure its longevity I fail to see how the Law Society can avoid passing down the same route as those companies which run and operate successful referral platforms.
We should all be calling on the Law Society to disclose its future plans and details of its business plan for this project for the next 3 years. I suspect this will fall on deaf ears.
I was told not too long ago by the Project Manager that a survey had been conducted and the results of this gave a clear indication that a large number of conveyancers have already committed to subscribing to Veyo. This may be so, but its surprising that none of the large players in the industry have following the recent launch stepped forward to record their support and commitment to the system. I also question why the survey data has never been released. If supportive of the large investment why have we not had sight of it?
The sale literature around the system boasts ‘A system made by conveyancers for conveyancers’ I am sure we would a all like to know which conveyancers were involved in the development as its clear that the Law Society is very far removed from grass root conveyancing and would not be best placed to advise on how processes work on a day to day basis.
There will we are told be third party integration kits. The Law Society say most of the Legal IT providers have said they will integrate with Veyo. Surprisingly none of those suppliers have as yet come forward. I suspect they may be waiting for the commercial terms of the arrangement to be published before going public.
There may exist conflicts between the commercial objectives of Veyo and other IT providers and going forward this may prevent the widespread use of Veyo. Why would a large conveyancing business having already invested a large amount of time in securing and training with a current supplier wish to spend further time and money on either switching or having to change work flows etc to accommodate what in many cases would be an unnecessary ‘add on’.
I was told that one of the aims of Veyo is to facilitate the movement of money between conveyancers on completion. This is an ambitious step but would suggest that the Law Society has been working with Lenders. Bearing in mind the large investment already made in this project it is again worth recording that as yet none of the major lenders have come forward and given their backing to this project. On the contrary they have instead focused their attention on establishing and promoting a different system namely the Lender Exchange.
The Exchange had a shaky start but has found its feet; I suspect Veyo is likely to face a more difficult introduction and having not it seems engaged with the Exchange during development this could in due course prove to be a fatal error of judgment.
Unless the Law Society and or PII insurers decide to compel all of those undertaking conveyancing to use Veyo ( which is most unlikely) it seems that that the system like many others before it may be destined for failure. Its no good having a hub to communicate with others , when some of the conveyancers in a chain have chosen not to use the system.
It is far too early in the day of course to pass judgment on a system which has yet to be released and which continues in the meantime to be nothing other than a concept.
However for this to work and to be successful there needs to be complete transparency on the commercial arrangement as well as low start up fees. There will also be a need for the Law Society to win the hearts and minds of the conveyancing community. This may be difficult given its appalling track record and its continuing failure to connect with those who operate at grass root level.
David Pett - Director and Solicitor
David Pett - Director and Solicitor