Open Letter to the President of the Law Society - Chancery Lane, London
I am a practitioner who manages a practice which provides residential conveyancing services to clients nationwide.
I have over the past 5 years worked hard to introduce efficiencies as well as measures to combat the increasing risks which continue to arise. Much of the work has centred around the development of an ‘in house’ risk and case management system. I along with my co-directors have invested a large amount of time and money to ensure we have a business which can compete with larger conveyancing practices and which more importantly can offer our clients a safe and efficient service. It has not been easy and apart from an understanding Bank we have had no help or support whatsoever from the Law Society or any other body.
Instead we have had to adjust and show complete flexibility to accommodate the ever increasing flow of regulatory and compliance hurdles thrown our way. As conveyancers we are required to fund not only our own overheads but also the cost of money laundering checks and the long list of statutory and other compliance requirements. Indeed we have had to employ one person who spends all of her time watching out for changes and making sure these are applied within our practices. Tracking as we do the number of hours we spend on each type of transaction it is clear that the hourly rate we receive from providing a good and reliable service is barely above that paid to our office cleaner!
It never gets any easier, and indeed if there is at the end of the day any profit left within a conveyancing transaction it is almost lost in discharging these obligations and taking out PII insurance. The financial pressure this imposes is highlighted in a an article which appears on your Small Firms Division website written by Mark Carver : ‘Conveyancing - is the reward worth the risk?’
In this article Mr Caver makes the following salient observations:
‘In real terms, solicitors are earning less now than they did 10 years ago from conveyancing, with average fees increasing by 36.5 per cent – significantly less than standard inflation for the same period (40.63 per cent). This is in stark contrast to estate agents, who have clearly benefited from the increase in property prices as their earnings are linked to the sale price, and to a lesser extent, surveyors, whose fees have increased above the level of inflation’
‘Not only are solicitors getting paid less for conveyancing than in 2004, but the potential risk is significantly higher, driven primarily by an increase in property prices’
‘Even firms fortunate enough not to experience a conveyancing claim should be aware that approximately £100 of an average conveyancing fee will contribute towards professional indemnity insurance premium for the transaction’.
These are findings which do not come as a surprise but are still nonetheless alarming and must on any interpretation be viewed as a stern warning. Unless something is done, and done soon, to address the imbalance between fee income and the increasing risk, high street conveyancers like ourselves will, despite our efforts, be condemned to history.
Its shocking that through inactivity and unnecessary distraction in projects like Veyo the Law Society has allowed this situation to continue unaddressed for so long. The time has now come for action to be taken to reverse this trend and to make sure that conveyancing is not seen as a worthless and inferior profession.
So some questions for you to answer please.
How much has the Law Society invested in Veyo?
Was any thought given at the time Veyo was conceived about spending the money on forming a strategy to see how the difference in value attached to the fees of a professional conveyancer and those of estate agent and other property professionals could be addressed?
Why is that as a profession our indemnity insurance is one of the highest when compared to other professionals?
Do you consider the Law Society has discharged its duty to its members by failing to protect its members who undertake conveyancing from suffering a severe erosion in the level of their fees at a time when the burden of compliance and other risk management has increased substantially?
Finally, what do you intend to do to make sure action is taken to address this concern?