On hearing that I have taken over the management of the firm’s residential conveyancing section (and hence have increasing involvement myself, in residential conveyancing work) a business contact and friend of mine launched into a diatribe (following experiences he had had when trying to purchase a flat in the North of England):
“I have just suffered at the hands of conveyancing lawyers who were just diabolical and it all comes down to the race to the bottom on fees. Unfortunately if only one person in the chain has used such a firm the rest, however efficient they try to be, are doomed to be tarred with the same brush.”
Despite its commonplace image, the conveyancing of residential property is, from a legal point of view, quite a complex task. A person living in a property on which they, in the majority of cases, have a mortgage wants to buy another property, sell their current property and (again usually) transport the mortgage on their current property over to the new property.
Both things need to happen on the same day (as nobody wants to/can afford to pay for more than one house at the same time) and frequently there is more than one family looking to complete the process on that day (for every buyer there is a seller) – what Estate Agents call a “chain.”
The whole thing is held together by a seemingly archaic series of mystical agreements – which do not become binding until contracts are exchanged (which is in fact very close to the end of the process) – with the risk that any party can pull out at any time. Add in potential complications created by leasehold title and new-build properties and, on first consideration, it may seem something of a miracle that anyone ever manages to buy anything.
So, why not join the race to the bottom? Why not just accept the services of the conveyancer offering the lowest fees?
Notwithstanding the liberalising mantra of the past 35 years, under the Legal Services Act 2007 the preparing of any instrument of transfer or charge for the purposes of the Land Registration Act 2002 and making an application or lodging a document for registration under that Act (collectively making up the process known as “conveyancing”) remain “reserved legal activities.” This means that a business providing these services must (in the absence of one of the specific exemptions set out in the Act) be regulated by an approved regulator (for example the Solicitors Regulation Authority – “SRA”).
Regulators, in turn, set out requirements in terms of the qualification and experience of the individuals providing the services and, indeed, of those supervising the provision of services.
Clearly the time of experienced solicitors (and licensed conveyancers) has a cost and various organisations have attempted to reduce their expenditure by “commoditising” residential conveyancing work. They set up “conveyancing factories” in which numerous non-qualified paralegals (or “conveyancing assistants” or some other job title) each provide an element of the conveyancing service according to a standardised check-list. (Rather like Henry Ford’s approach to building a motor car.) The unqualified staff are then subject to the supervision of a qualified person so as to comply with the requirements of the relevant regulatory body.
And what is wrong with this, you may say?
The problem is that, whilst every commercial law firm will seek to reduce unnecessary costs for their clients, buying and selling houses (and flats) is not like building motor cars. As every conveyancer knows even the most “straightforward” transaction is rarely entirely straightforward.
Almost every property throws up anomalies (be it in the Land Registry entries and other documents of title or in a search result) and, if the person considering these items does not have the necessary experience to distinguish between what is significant and what is not, unnecessary delay will frequently be the result. (Please bear in mind that, in conveyancing, not all delay is bad.)
In addition the conveyancing process entails that (particularly in a chain transaction) the representatives acting for the various parties have to rely on each other. Whilst I am happy to rely on assurances (“undertakings”) from other qualified, regulated professionals, I am less willing to do so when speaking with unqualified staff.
Finally, further problems emerge with the “factory” approach to conveyancing if difficulties come up during the course of the transaction. On occasion supervisory arrangements fall short of what is envisaged by the regulatory body and it is difficult to get hold of an experienced conveyancer and to get effective action taken to resolve the difficulty.
Purchasing a house is frequently the largest financial transaction a person undertakes in their lifetime. When considered in this way the imprudence of choosing conveyancers just on the basis of price becomes clear.
Whilst price is clearly one factor it is equally (perhaps even more) important that the job is done well.
And in answer to my friend’s comments:
It is true that you will not be able to prevent someone else in the chain in which you are involved from choosing “cut price” legal advisers who may hold the whole transaction up. If you have however chosen good advisers they will, at the very least, be able to keep you informed and explain the reasons for any delay (which should make the process less frustrating).
At best, they may be able to patch over any gaps created by lack of expertise elsewhere in the chain and keep the transaction moving forward. (In addition the services of a good Estate Agent can – although they are much maligned – be invaluable in this respect.)