Conveyancing Solicitors Brace Themselves for a Tough Year Ahead

A stagnant housing market, combined with the reluctancy of banks to lend, has left many solicitors’ conveyancing firms struggling to make ends meet. With the property market showing no indication, as yet, of recovering this year, the future of many smaller firms looks increasingly uncertain. Using the full breadth of their expertise and accepting that firms will be merged may however, enable conveyancing solicitors to weather the storm.

Over the past few years conveyancing solicitors have widely enjoyed prosperous business. The flurry of transactions, which characterizes a booming property market, has called upon the expertise of conveyancing solicitors to swiftly and competently transfer properties between sellers and buyers. As a result, they have enjoyed a steady flow of business from both the residential and commercial property markets.

However, the reliance on a thriving property market, which served conveyancing solicitors so well during periods of prosperity, has resulted in a tough time more recently. The reluctance of banks to lend, and decline in both sales and purchases, has dried up the previously lucrative source of work.

Fixed fees, which may have formerly attracted custom, are now likely to prove a burden for firms. With fewer cases but extra costs, coming in the form of redundancy payouts and professional indemnity insurance, the ability to raise fees would help to better balance the books at many firms.

Licensed conveyancers also pose a not insignificant threat during these tough economic times. If either a licensed conveyancer or a bank’s paralegal can do the same job but for less, there is a danger that people who are already financially overstretched will opt for one of the latter.

However, as a general rule, lenders still prefer to employ professionals with the broadest range of knowledge for transactions which risk large amounts of money. Conveyancing solicitors have the edge over their competitors because of their wide range of skills. Should probate, litigation or tax matters arise as part of a transaction; a conveyancing solicitor will possess the necessary skills to also handle these matters.

And as the credit crunch worsens, banks are becoming increasingly cautious about the rules and regulations governing property transactions. A conveyancing solicitor, who is accredited by the likes of the lawyers’ Regulation Authority, offers the reassurance of a guaranteed standard of knowledge and expertise.

Another likely outcome of the credit crunch for conveyancing solicitors is the consolidation of firms. Merges will undoubtedly occur, as smaller struggling firms are absorbed into others.

Whilst the immediate result of the current climate will inevitably be job losses, the long-term outcome may be an increased emphasis on the breadth of conveyancing solicitors’ skills and better-run firms, made stronger as a result of their increased size.
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Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.