Property Focus | The future of conveyancing: customer service is key

The last five years have been an incredibly tough time to be a conveyancer. Since October 2007, the last peak in property sales before the recession, the low number of property transactions has been a constant source of concern. By 2008, the number of property transactions had dropped 50 per cent to an unprecedented 700,000 in the UK, a 20-year low. The recession meant that homeowners simply weren't moving, unable to afford bigger homes and concerned about losing equity on their properties. Additionally, first time buyers were priced out of a market that required increasingly high mortgage deposits and salaries at a time when more young people than ever were unable to find work.

As a result, the last few years of change in the property market have had a considerable impact on solicitors and conveyancers. Many smaller law firms were forced to close or sell up, simply unable to continue in a market where so little was happening. Meanwhile, larger firms diversified their offerings, but the need for a large conveyancing team simply ceased to exist.

Meanwhile, lender panels have become a major concern within the market and have an enormous impact on the survival and growth of conveyancing firms. They have become more prevalent over recent years, and building strong relationships with lenders to ensure inclusion has been an essential consideration. However, many lenders have begun to reduce the number of firms on their panels, often without warning or consultation. The Conveyancing Association has identified this development as posing "the greatest threat to conveyancing firms that the market has seen in recent years".

Regulation and legislation has also played a major part in influencing the conveyancing market. Changes such as the Legal Services Act in 2011 and the SRA's outcomes-focused regulation (OFR) can be both a threat and an opportunity for conveyancers, increasing competition within the market and requiring additional investment of both time and money, but also helping improve the quality of the sector and the levels of service offered.

It has been a difficult time, but after more than half a decade of turmoil, the UK property market is finally showing signs of recovery. Last year saw mortgage lending increase for the first time in years, driven by a 12 per cent increase in first time buyers entering the market. In the same year, UK house prices rose 3.3 per cent, and homeowners are showing ever increasing confidence, with recent research suggesting that they predict a further 10 per cent rise in property prices in 2013. Furthermore, property in London is being bought faster than any time since October 2007, typically only staying on the market for 4 to 6 weeks - nearly half the period seen at the end '¨of 2008.

While this is undoubtedly great news for conveyancers and other partners involved in the property transaction chain, it's essential to realise that the landscape in which you are working has changed. As difficult as things have been, there is an opportunity to learn from these tough times. This could be in terms of increased efficiency, through doing more with less or investing in new technology. Additionally, by embracing new regulation like the OFR, firms can improve their customer service and ensure that they are differentiating themselves from their competitors in terms of more than just price.

Increasing numbers of conveyancers have been offering fixed-fee services in recent years, in an attempt to remain competitive in a challenging economy. However, while this may initially appear attractive to homebuyers, it can often lead to less diligent service, as firms try to reduce their costs and therefore maximise their profits. Overall, charging clients in this way can be counter-productive, as they are unlikely to feel that they have had the best possible service and may not feel inclined to recommend the firm to others. For this reason, regardless of the state of the economy, price should not be a firm's only differentiator, and firms should focus on improving their customers' experiences.

In wider terms, the last five years have seen vast technological advances which have had, and will continue to have, huge implications for the way clients expect their solicitors to work. The iPhone was only launched in the summer of 2007 - now 60 per cent of the UK population own a smartphone. Likewise, internet-based cloud technology is now mainstream. This explosion in connected devices means that consumers are constantly contactable, and expect their solicitors to be too. Meanwhile, the legal industry's penchant for sending information via post looks increasingly outdated and slow in a world that is 'always on', and where your clients will often expect instantaneous responses at all times of day.

Additionally, the conveyancing industry is suffering from something of a reputation problem compared to other parts of the legal sector. Recent research by What Mortgage suggests that two thirds of home buyers and sellers are dissatisfied with the level of service received from their solicitor. Furthermore, according to the Legal Ombudsman, residential conveyancing is the second most complained about area of law after family law. While this is perhaps not surprising, given the relatively high volume of clients in these areas, it's concerning that the majority of complaints made about conveyancers focus on a failure to advise (27 per cent), while a further 21 per cent cite a failure to follow instructions.

Both solicitors' reluctance to embrace technology and the relatively high level of complaints in this sector suggests that, in many cases, solicitors forget that what might be a straightforward case to them may well be the biggest decision and purchase that the client will ever make, and so good service is essential to a positive consumer experience. Given that word of mouth recommendations are highly important within the legal industry, this is a worrying oversight which could affect the reputation of the entire sector.

The homebuying process is an extremely expensive and important transaction, often with many different parties involved and many different areas where the process can be delayed. Clients are often unfamiliar with the process, and therefore rely on their solicitor to guide them and ensure that they know what is going on at each stage. A property transaction is often a very stressful time for both the buyer and seller, and so delays and a perceived lack of guidance can be very frustrating to clients.

This guidance is ever more important as the number of things that can affect a property purchase continues to increase. Infrastructure developments like Crossrail and HS2 are very high profile at the moment, and anyone buying a home near these new railways will be looking for reassurance that they won't be adversely affected. While house prices close to either development are widely predicted to rise, homes very close to the new lines may see an adverse effect on prices, and it's important that firms help their clients '¨to understand the effect it will have on '¨them personally.

Flooding is also a very hot topic at the moment. With the Statement of Principles between the government and the Association of British insurers (ABI) due to expire in June 2013, flood insurance could be much harder to secure and this could have a huge impact on many UK property purchases. In addition, the risk of flooding is increasing as government spending on defences decreases. Even if an area carries a low risk of flooding or no precedent, conveyancers cannot afford to be complacent. Firms should still carry out the appropriate searches and advise their clients to speak to their insurer before completing the transaction. Relying on 'local knowledge' simply isn't enough in these current conditions and conveyancers should consider expanding the number of flood searches that they carry out, and increasing their diligence in this space.

Another area in which conveyancers can expect to see big changes over the next few years is within fraud. Unfortunately, property fraud is becoming increasingly sophisticated and legal professionals must ensure that they keep up in order to protect themselves and their clients. Technology plays a huge part in committing fraud, but can also play a huge part in combating it, as long as firms are willing and able to move with the times and ensure they have access to the most up-to-date security software. This is generally not a problem for the top 2000 UK law firms, who are large enough and modern enough to have implemented the correct technology. However, there is a long tail of smaller firms in the industry who still rely on traditional methods and 'gut feel' to prevent fraud, and they are increasingly putting themselves and their clients at risk.

In addition to investigating transactions and flagging areas of concern, technology helps firms to create a defined audit trail, something which is undeniably an essential part of legal work, and critical in protecting your firm in the case of fraud. Using technology need not be a vast change to the way solicitors work, simply a way to streamline and speed up their processes, and to provide additional transparency for all parties. Ultimately, the industry norm should be that each stage of the transaction is secure, joined up, and visible to everyone involved at any stage.

The overall message to conveyancing solicitors looking ahead over the next five years is that customer service is an incredibly powerful tool in differentiating your firm from the competition, and embracing technology can help you to '¨get there. '¨Most individuals will expect the same level of service from their solicitors as they expect from other service industries - instant responses, both over email and on the phone; regular updates, so they always feel informed; and quickly as is possible, both in their actions and communications.

By speeding up your procedures and increasing clarity to all parties, technology will help you to better serve, and protect, your clients.