Friday, 21 November 2014

Veyo - Raising more questions than its answering

Heather Cameron of Today’s Conveyancer recently interviewed Veyo’s Chief Executive, Elliott Vigar, in an effort to learn more about Veyo’s product which is scheduled for release in Spring 2015. 

Despite a recent statement to the contrary, Mr Vigar has now placed on record his company’s intention to release (into an already congested market), an online system which will essentially provide conveyancers with a case management portal.

On being asked what exactly makes Veyo unique from other similar conveyancing systems, Mr Vigar stated:

"Veyo not only covers the entire chain comprehensively, securely and quickly, but most importantly it’s unique because it allows conveyancers on both sides of the transaction to communicate in real time with each other, their clients and other stakeholders in the transaction. It has been designed with considerable input from licensed conveyancers as well as solicitors to ensure it meets the needs of the industry.”

Interesting comment.  

To begin with its difficult to see how the system can monitor the ‘entire chain’ without first ensuring every conveyancer in the chain is part of the Veyo system.  Mr Vigar does not explain how Veyo is looking to achieve this especially when Veyo  as far as we know is not going to be a compulsory product. 

Secondly, it seem strange for Mr Vigar to suggest that conveyancers do not already speak with each other in ‘real time’.  Speaking on the telephone and communicating via email must clearly, must it not, constitute ‘real time’ communication. Furthermore, most case management systems already provide collaboration tools and to claim that Veyo will be unique in this area is simply disingenuous. 

On being pushed on the subject of Veyo’s USP Mr Vigar stated:

"Conveyancing professionals have been in real need of a solution that improves communication and collaboration between everyone involved in the home buying transaction process for a long time now. Veyo is being designed as a complete, end-to-end, transactional solution and unlike any other on the market.”

He added:

"Veyo provides the perfect solution by streamlining the process, reducing the administrative burden, enabling seamless communication and thereby both saving conveyancers time and money, but also speeding up and increasing confidence in the home-buying and selling process for consumers.”

It will be interesting to see what other legal software suppliers make of these remarks bearing in mind many of the competitors in this areas have been up and running and providing good, solid and well tested products for many years.  These competitors know the market inside and out and already have systems which provide an ‘end to end’ solution as well as communication and collaboration hubs.   

Most good solutions help conveyancers to streamline processes and reduce administrative burdens.  Those systems also help conveyancers to save time and money as well as to keep  clients informed of progress. 

There still therefore seems to be nothing new on offer. 

Turning now to the consultation process we are again being told that Veyo has come about due to ‘considerable input from licensed conveyancers as well as solicitors’.  Despite being asked the question several times Veyo has still not disclosed which conveyancers were consulted during the focus group phase of development.  

On this subject Mr Vigar explaining the process in more detail stated:

"The Society conducted a rigorous nine month tendering process and talked to more than 20 potential partners to ensure we got this decision right. Mastek was successfully selected because it takes such an agile and collaborative approach to technology. Its overwhelming expertise, experience and pedigree in developing enterprise class solutions with an emphasis on security, robustness and handling sensitive information make it the perfect partner.”

It is clear there was a form of tendering process and that several suppliers of case management systems were invited to attend the Law Society and demonstrate their offerings.  Looking back I wonder how many of those suppliers ( who will soon be competing with Veyo ) now regret taking part in this exercise.  

The choice of Mastek is surprising not because of any question mark over its pedigree but more to do with its  lack of track record in the legal technology market.  It is equally puzzling to note that it has only been within the last 4 weeks that Veyo has established contact with  The Legal Software Suppliers Association (LSSA), the UK industry body for legal systems developers and vendors.  

At the recent user group meeting of the BT legal software suppler Tikit users if the technology were told that Veyo had no contact with Tikit until very recently and that when the call came  it transpired that Veyo was asking for help!  Tikit made it clear that it views Veyo as a competitor though it will be happy to integrate its system with Veyo but only if the customer is prepared to pay for the installation. 

Despite the product being promoted as  ‘designed by the industry, for the industry’ it seems Mr Vigar does not possess a background in conveyancing.  In his defence he explained:

‘’Whilst not at the coal face, however, having trained as a barrister and having amongst other roles, previously run the Law Society’s regulatory policy function for a number of years, I have strong legal experience." 

As for pricing there is still no news according to Mr Vigar:

"At this point it is still too early to confirm, as we are still considering a couple of different pricing models and variations and discussing possible options." said Elliott.

"What is likely to be the case though is that Veyo will be based on an annual, per license fee coupled with an individual transaction fee. We believe that using Veyo will actually save conveyancers money by making the entire conveyancing process quicker and more efficient."

"Currently, we’re working to ensure that our pricing structure works for law firms of all sizes. This is because one of the benefits of Veyo is that smaller firms will have access to the kind of advanced technological system that normally only larger, more technically able firms have, bringing improved efficiencies for all and greater financial rewards. We are clear that Veyo should not adopt a pricing model that prices any firm out of its use."

So where does this leave us?

In short, no further forward, though we do now know that Veyo is a conveyancing case management system meaning that only those conveyancers who do not have an existing system or on that needs to be replaced will be interested in the product.  This must be correct since why would a conveyancer already running a good and reliable case management system wish to spend more money on purchasing Veyo?

I have no doubt that Veyo will provide the Law Society with a good and sophisticated piece of kit and that they will secure some business, but as I have previously written I do believe that they have in their haste to get this product to market, missed a trick or two.

Heather Cameron’s full article can be found here: 

Thursday, 20 November 2014

New duty to warn other conveyancers of client's suspected fraud?

Scotland’s supreme civil court’s decision in Frank Houlgate Investment Company Ltd v Biggart Baillie LLP [2014] CSIH 79 has raised some interesting questions about transactional fraud and could have an important impact on conveyancer’s liability when they act for a dishonest client. 

The facts involve an investment company, the plaintiff, which lent money to the client of  the solicitor, the defendant.  The security for the loan was not owned by the client  and was in fact worthless.  During the course of the transaction the solicitor became aware of he client’s attempt to defraud but nonetheless continued to act and as a consequence of the fraud the investment company suffered a loss. Acting on the instruction of the client the solicitor did not warn the representative of the investment company of the fraud.

The three judges of the CSIH all agreed that the client’s solicitor was liable to the investment company for the losses , although they were not unanimous regarding the basis for that liability.

Lord Menzies held that the solicitor was under an obligation immediately to disclose to the investment company’s representative,  the that the client had admitted fraud and that the security was worthless. That obligation flowed from a continuing implied representation to the other party to the transaction that they are not aware of any fundamental dishonesty or fraud which might make the security for the transaction worthless. Notwithstanding the duty of confidentiality the solicitor was incumbent on a solicitor to act honestly at all times.  Not surprisingly Lord Menzies further held on the facts that he would have found the solicitor liable as an accessory to fraud in any event.

Lord Malcolm  relying  instead on Donoghue v Stevenson held that the solicitor was liable in negligence. He held that it was ‘preferable simply to rely upon the broad concept of culpa [fault], in the sense of failure by a professional to use the care and skill required in the circumstances’. He added: ‘In the present case the actionable negligence arises because [the defendant] came to learn of the fraud and knew, or should have foreseen, that further harm to the pursuers could ensue if he did not take care to protect them.’

There remains a question mark about the soundness of Lord Malcolm’s reasoning since there appears to  little authority around to support the existence of a duty of care by a solicitor to a third party, though the more interesting aspect to this decision is the obligation  to override the duty of confidentiality once a solicitor becomes aware of fraud. 

The bearing of a Scottish decision on practice in England may not be direct, but the case does give rise to some interesting questions.  If these circumstances were to happen in England it is clear the  solicitor  once knowing of the fraud should have immediately desisted from undertaking any further work ( without doing anything to ‘tip’ the client off ) and to then report the incident to the Solicitor Regulation Authority and the National Crime Agency   If there was then no intervention by the SRA/NCA the solicitor should have then terminated the retainer.  The question is whether in the light of the case of Frank Houlgate there would also be a duty once the retainer came to an end to bring the matter to the attention of the other parties in the transaction remains unclear.  How far would that duty extend?  Would the solicitor need to alert another solicitor appointed by the client when approached for the release of the file following the termination of the retainer?

The other question of interest which emerges from this case is that if a solicitor comes across  information, if considered properly and in line with SRA and Law Society obligations,  would show that the client could be acting dishonestly, but the solicitor fails to read or to appreciate the importance of that evidence, would that be sufficient for a lender of other third party to rely on the decision of Houlgate and seek redress for loss. Could this now present a lender with an alternative route to the solicitor’s insurers when loss is sustained due to fraud?

Only time will tell though one thing is for certain it is an argument which I am sure a lender will look to run sometime in the very near future. 

Article by David Pett Director/Solicitor - MJP Conveyancing

Monday, 17 November 2014

Veyo's Fundamental Flaws

The Law Society’s joint venture with Maestek UK has become a hot topic of conversation within the Legal Community and has in the main courted a great deal of  negative press from property practitioners.  The product to be delivered by Veyo is described on Veyo’s website as a ‘revolutionary home conveyancing portal’ offering to save practitioners ‘time and money’.  Speaking at a recent conveyancing conference Veyo’s Chief Executive, Elliott Vigar, announced that the launch of the product is still on schedule for spring of next year.

In this article I look to examine and discuss those areas of Veyo’s business model in which there is I believe some fundamental, and perhaps fatal, errors.

I must begin however with a disclaimer as well as a declaration of self-interest. I am not an expert in legal technology; though I must disclose that in 2011 I designed and built a risk and case management system (Quick Conveyance) with the help of one full time programmer.  The system was built on a ‘shoestring’ but has proved largely successful and has helped my business process around 30,000 transactions since it was launched.  The cost of building the developing the system (which boasts the majority of the features of Veyo) has been no more than the salary of a full time programmer.  Contrast this with the news that Veyo has and continues to consume millions of pounds of investment, not only in relation to build but also in marketing and promotion.

The first feature of the business model to consider, and an aspect which is pretty fundamental to any new business venture, is the question of identity.   Is Veyo a communication and compliance hub for the benefit of those who subscribe to the Law Society’s national Conveyancing Protocol, or is it a case management system for those undertaking conveyancing. Or is it both?  For any product to achieve successful traction in the market for which it is designed and promoted, it must be capable of being clearly understood by the target market.   Unfortunately from what has been disclosed and presented to date the message is far from clear.   At the recent Society of Licensed Conveyancer’s Conference held in Derby those representing Veyo (Des Hudson, former Law Society Chairman and Mr Vigar) were clearly confused.   In response to questions from practitioners it was clear that they themselves do not know whether they are entering the highly competitive market of legal case management systems, or whether they have a system which is designed to supplement existing case management systems.  From reading the literature and despite a clear statement from Veyo to the contrary, it seems obvious to everybody other than Veyo that they are offering nothing unique or different.  Veyo is a case management system which is no different from most of the other case management products out there and which are far better established.

So what would have I done differently?   To begin with I would have consulted with both the practitioners and the legal technology industry at an early stage and looked to see what I could have done to supplement rather than compete with existing offerings.  Why re-invent the wheel?  Veyo swears blindly that it has consulted and carried out extensive focus group exercises.   I am no business guru, but even a candidate from the BBC show the Apprentice could see that there is very little evidence that if this did take place, little if any reliance has been given to the feedback.    The case management market is saturated with similar products and products with lengthy and successful track records.  Why do we need another case management system?   For a practitioner who has already invested a significant sum of money in a case management system there is little incentive to switch or spend money on integrating with Veyo. It simply does not make any commercial sense.
Keep in mind that Veyo claims its system will speed up the conveyancing process and help to save cost.   This strap line simply does not inspire confidence.   It is reported that Veyo will need to charge a license fee and also a transaction fee.  It is not clear how much these fees will be, but based say on a license fee of £2000 per user and a transaction fee of £15, a business which handles 2400 transactions each year and has 20 fee earners would be looking to pay Veyo £76,000 per annum.  If the business already operated a case management system then it would be looking to pay this on top of its existing commitment without any apparent additional benefit.   This hardly demonstrates a saving.

The lack of identity caused by flawed business development investigation was avoidable.   The Law Society could have looked to introduce for example a system which acted as communication hub to bridge existing case management systems and offer a ‘negotiation room’ and or a ‘chain matrix’.   An idea that would not have competed against existing and established systems but which brought something new and innovative to the table.  One question which springs to mind is why the Law Society not look to reviving the Land Registry’s failed at a chain matrix. The idea of the system was to reduce the uncertainties of house buying by allowing all parties in a chain to see what stage of the process had been reached by everyone else. It was to be the centrepiece and public face of a scheme to computerise the entire conveyancing process. However, the scheme was postponed at the end of 2007 after a pilot showed little interest from conveyancers or their clients.  I am sure that with full and proper consultation with conveyancers and the legal technology industry there could have been some merit in looking to resurrect this project particularly if there was some appetite evident from private investors.

The other significant failing has been the lack of engagement with the target market.  Veyo is either naive or extremely arrogant in its approach to the presentation and marketing of its product.  This is not a current issue but goes back in time to when the product was first devised.    Veyo claims it held focus groups and consulted with grass root conveyancers but has up until now failed to disclose details of that consultation.   The legal sector is a difficult market place at the best of times.  Those selling to lawyers find it difficult to engage interest and to earn sufficient trust to then sell.   Veyo seems to be oblivious to these factors and seems to believe that conveyancers will come forward in sufficient numbers and sign up.  I suspect this is a highly optimistic view and indeed the recent announcement by Myhomemove might suggest that conveyancers have already turned their back on Veyo.  Myhomemove, the UK’s largest provider of mover conveyancing services, recently selected Lexis Visual files 2014 as the firm’s next generation workflow and case management system.

To succeed in the legal sector there needs to be a sense of belonging and unfortunately this has been lacking in the approach adopted by the Law Society in the development of Veyo.  I am sure if there had been effective and extensive consultation with conveyancers in its development conveyancers would have been warmer and more receptive to Veyo’s introduction.

It may not be too late to save Veyo providing those behind it begin to listen to the feedback and perhaps look to redesign the product.   It needs a unique selling feature and to demonstrate that for the money it will demand that it is actually adding to and improving the conveyancing experience for the conveyancer and client.

Veyo - Raising more questions than it is answering : 

By David Pett Director of MJP Conveyancing