Law: Muscling in on your move

CONVEYANCING was once the bread and butter of many small, high- street solicitors. The income from it was even used to subsidise the work of other departments. Not any longer. A threat to has emerged in the past year which is potentially more dangerous than furious price-cutting, the arrival of licensed conveyancers or the prospect of rocketing professional indemnity premiums.

In April 1997, Britain's biggest estate agents, Hambro Countrywide, opened its first seven-day conveyancing call-centre in Woking, Surrey. Two national solicitors' firms have followed suit and are experiencing phenomenal rates of growth. Conveyancers know these call-centres will attract a big chunk of the market - but how big?

Shoosmiths & Harrison, a solicitors' firm with offices across the Midlands and South, developed its Property Direct conveyancing operation to work alongside Hambro Countrywide's second call-centre, which opened in Northampton in June 1997. Shoosmiths has been able to offer its services to other clients, most recently Barclays Mortgages.

Graham New, managing partner at Shoosmiths, is anxious to play down the impact of conveyancing call-centres on smaller firms, saying only that the telephone-based approach will gain a "substantial" rather than dominant market share. "The philosophy Hambro and the lenders have is not so much to make loads of money as to gain control of the house-buying process," he says. "Direct lenders are becoming more sophisticated in the way they deal with mortgages. Sending out instructions into the traditional fragmented market, they have no control over how quickly and effectively the job is done."

Property Direct is divided into teams of six to eight paralegals, each one supervised by a solicitor and working on a shift basis. Mr New claims that it has cut the average time of a conveyancing operation by up to 50 per cent, to around six to eight weeks. Fees start from pounds 295 for sales or purchases.

Property Direct currently employs 60 to 70 staff, a figure which Mr New aims to double by the end of the year. "Our view is that this is the future of conveyancing," he says. "Not everyone will instruct a direct conveyancing operation, but people are becoming much more used to buying services directly from home using the phone. They don't want to take half a day off to see a solicitor."

Kevin Doolan, banking and finance partner at Eversheds, Britain's biggest national law firm. Eversheds has co-operated with Hambro Countrywide in its Cardiff call-centre, opened last month, and a Manchester centre is due to open in April. Other national firms, Hammonds Suddards, Dibb Lupton Alsop and Addleshaw Booth & Co are said to be keen to move into domestic conveyancing.

Mr Doolan also anticipates a future of exponential growth, with the 100 or so staff currently employed in Cardiff and Manchester doubling in numbers every nine months. "It's an incredible rate of growth, but the demand is definitely out there," he says. "All we are doing is mimicking things our lender clients have already done."

Doolan estimates that the conveyancing call-centres probably control around 5 per cent of a market worth anything up to pounds 500m. In two years' time, he predicts this figure will reach 25 per cent, and as much as 40 per cent in five years.

"Before Direct Line there were insurance brokers on every High Street. Where are they now? The only way small solicitors' firms are going to be able to compete is by getting together and forming groups. There is no reason why a group of small firms could not do exactly what we're doing," he says.

Nick Hilborne is news editor of `Solicitors Journal'.