Conveyancing growth creates new risks
A recent survey of conveyancers has identified that the conveyancing departments of over three quarters of respondents have grown by 10% or more in the first quarter of 2014. Expectations are also high with nearly six in 10 expecting their business to grow by 10% or more for the rest of the year, and one in four firms expecting growth to exceed 21%.
This all sounds wonderfully positive news but unless it is managed correctly this could present significant risks for many conveyancers.
Chris Harris is a consultant working with a number of firms in the conveyancing market and also runs Today’s Conveyancer. Speaking to Moneypenny, he said:
“Conveyancing firms are already running into difficulty with the increased volumes.
“The Ombudsman has already reported an increase in conveyancing complaints and these might flow through to professional indemnity claims if firms are not careful. Many firms are just too stretched and do not wish to hire or turn work away.”
Chris went on to explain that he sees some key areas of risk for busy firms:
“Firstly, you need to consider the impact of the market on your staff and salaries. Salaries are rising and recruitment consultants will be contacting your staff. Conveyancers are now being tempted by higher wages and better conditions. If you do lose staff when you are busy this can have a negative impact on your business so now might be a good time to review salaries.
“Secondly, busy firms seem to have failed to realise that the shortage of conveyancers and surveyors has led to an increase in the memorandum of sale to exchange times. In some firms this means that work in progress has risen substantially whilst completions have yet to rise. Some fee earners are managing pipelines of cases that are way beyond their capacity and the propensity to cut corners has increased as people have become busier. This presents a risk of negligence.
“Thirdly, the number of panel managers, introducers of conveyancers and the public that I talk to that say that conveyancing customer service is poor across the whole conveyancing sector. Many firms are not answering phones at busy times or responding in a timely fashion to correspondence or emails.
“Finally, firms have not been keeping up with new risks. There are now a number of cases where conveyancers have inadvertently been conned into sending money to criminals who have infiltrated, cloned real conveyancers or set up fake practices. Services like Lawyer Checker help protect firms from such a nightmare situation; however, many are so busy with business as usual that they do not have time to consider how the market is altering.”
Chris’ advice is to either make time to consider the risks associated with being busy, or to engage a consultant to help you avoid the pitfalls. Chris can be contacted at email@example.com