Law firms have been hitting the headlines recently as they struggle to survive in the tough market conditions.
Just last week, Birmingham based Blakemores Solicitors shut its doors as the Solicitors Regulation Authority “intervened”, to protect the interests of the firm’s current, former and/or potential clients, leaving 250 lawyers and staff to clear their desks and go home.
With the SRA’s plans to ban pay referral fees from April, many more law practices are likely to suffer. A recent poll of 300 businesses by Liverpool law firm O’Connors, found the vast majority of respondents believed the upcoming ban would reduce their profits.
With legal businesses disappearing, the choice of conveyancing firms is becoming limited. Due to this, it is vital to ensure that your company is embedded with a firm with a long term future. A good way of assessing the stability of a firm, is to check whether it is part of the Conveyancing Quality Scheme. Launched by the Law Society in October 2010, the CQS provides a recognised quality standard for residential conveyancing practices. CQS is now a requirement for many lenders and last year, Santander announced that it would axe up to 1000 firms from its conveyancing panel if they had not received the accreditation by March this year.
At Sesame Bankhall Legal Services, we require all firms on our panel to hold this qualification. However, we also constantly review the financial viability of all these firms. A shocking 25 per cent of law firms, including many with the CQS kitemark have severe financial difficulties and so constant monitoring of this situation is vital.
With the future of so many legal practices still unknown, advisers must carry out thorough due diligence of all aspects of a firm to ensure they are recommending a reputable and stable conveyancer to clients. The tough market is affecting us all but this mark of approval will help make sure the most robust firms come out fighting.