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Good luck to Halifax as it enters the lawyers’ lair


It’s interesting to see how mortgage lenders and banks are rising to the challenge of operating in a market where the profit margin from their traditional business is narrowing.

Now Halifax is proposing to up the ante by entering the legal arena to provide a conveyancing service – well, to be accurate, a hands-off conveyancing service. The work will be outsourced to a panel of legal firms throughout the country who will bill direct at a Halifax-negotiated price. In return, Halifax will receive an introductory fee. Good luck to it but I’m sceptical this initiative will be much more than window dressing.

The consumer tends to be pretty conservative when it comes to obtaining financial services. And I’ve yet to find a mortgage or savings provider that can honestly claim to have made much of a success of diversification into non-traditional areas.

OK, I accept with conveyancing there is a precedent.

A number of lenders already offer outsourced conveyancing services linked with lawyers for whom ‘in-sourcing’ has become a speciality. And it has to be said these firms don’t seem short of customers. So, though its venture can hardly be described as either radical or innovative, Halifax will now be able to punt for a share of this market.

And because the company has retained much of its independent reputation within the HBOS stable, it’s probably starting from the front foot. We like Halifax.

My reservations regarding how successful it’s likely to be are principally down to concerns about horses for courses.

Though customers of the main players take advantage of lender-led conveyancing services many borrowers remain sceptical and prefer the comfort of employing an independent specialist to meet this need. It’s partly a question of trust and partly one of control.

But maybe Halifax will change all that and the more competition in this area, the better as far as I can see.

Whoever coined the description ‘legal eagles’ for lawyers ought to be sued under the Trades Description Act. In my experience, when it comes to conveyancing, lawyers have more affinity with dead parrots.

But all this is due to change next year when banks and retailers can employ lawyers directly to offer legal services to the pubic. This will be an interesting test of public perception. If you had to choose, who would you trust more – a banker or a lawyer? It’s like asking whether you’d prefer to be eaten by a shark or a snake.

It’s also going to provide employers with quite a challenge in terms of recruitment – sorting out what set of services and which breed of lawyer is likely to cause them the least harm. Because if you think banks get themselves into hot water over lending irresponsibly, just wait until they start doling out legal services and advice as well.

Crusading personal finance journalists are sharpening their quills.


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