Non-legals leave conveyancing but brokers can benefit
The Legal Services Act came into effect in October last year and was heralded at the time - and indeed many times since - as bringing about a fundamental change in how legal services could be provided and by what type of firms.
Simply put, it allows companies that are not primarily legal firms to offer legal services.
It was dubbed Tesco Law because many anticipated the supermarkets would push quickly into this space.
Other parts of the Act mean that anyone can now own a legal firm and, on the flip side to the Tesco part of the law, legal firms can now offer non-legal services.
Ironically of course the number of supermarket-type businesses who have decided to move into legal services have been few and far between.
Indeed, Tesco itself has made no such announcement and so far only the Co-operative has announced that it has been granted alternative business structure status under the Act.
Newbies considering this sector will learn that the chance to make significant money simply does not exist
Those that anticipated a great swathe of non-legal businesses entering the fray will have been greatly disappointed.
This, in the current climate, can probably be deemed an idea that in theory seems spot-on, but in practice turns out to be an altogether different kettle of fish.
The reasons for this are many and varied, but many will consider it pretty obvious why we are not seeing more non-legal firms offering conveyancing services.
Those thinking about such a move need only talk to an active conveyancer to see why this might not be a good option.
Conveyancers already take umbrage at how little they earn from a case and any investors or newbies even considering this sector will learn quickly that the opportunity to make significant amounts of money simply does not exist. The fact that we already have a highly competitive market for conveyancing should send a warning signal to potential newcomers that the current timing is not good.
Of course, were the market flying then one might expect some new businesses to take the plunge.
But it is not, and the outlook for an improved housing market is not positive.
The lack of new transactions will certainly be on the risk radar for any potential new conveyancer and, without wishing to put anyone off, only an idiot would choose to ent er a sector when it was at rock bottom.
So, what does this all mean for brokers?
Well, as stated, competition is strong and one might hesitate to say that when it comes to choosing a conveyancing provider advisers have probably never had it so good.
Picking the right distributor for your clients will not only get them a great price but for the broker some significant income can be earned off the back of their advice.
The big issue for brokers is committing to, and securing, their client’s conveyancing work.
There are still many who do not offer advice and recommendations in this area and are missing an income-generating trick.