Posted by Andrew Lloyd, managing director of Legal Futures Associate Search Acumen
Conveyancers are under pressure. The post-recession revival in the property market has meant a boom in activity in the last few years, dampened only slightly in the past few months as a result of the referendum on EU membership.
According to the Land Registry, the number of residential property transactions in England and Wales increased by 44% from 1,429,000 in 2012 to 2,060,000 in 2016. This is good news for the property industry, for anyone looking to move up the ladder or downsize, and for the economy as a whole – long may it continue and let us hope 2017 sees some post-referendum gusto return to the property market.
However, what is much less widely known within the conveyancing industry – though many firms will recognise the effects – is that this extra workload is actually being delivered by fewer individuals.
Between 2012 and 2015 the number of practising conveyancers fell from 20,180 to 18,818, a reduction of 1,362. Conveyancers were therefore undertaking 55% more work per person by the end of 2015 than they had been three years before.
On average each individual conveyancer is now delivering the equivalent of 110 transactions per annum, or around two transactions per week.
This is, on the face of it, a productivity miracle. If the rest of the economy could replicate this feat, economists and the Treasury would be jumping for joy, and there would be no need to worry about Brexit. Our economy would be the envy of the world, and even the industrious Germans would be knocking at our door for tips on how they could achieve such a leap in productivity. Vorsprung durch conveyancing, they might say.
However, the reality behind these numbers is that conveyancers are working longer hours to achieve these results, and in many cases the quality of service is being compromised. Ask any house buyer what they find most frustrating about the process, and they will often tell you that it is chasing their conveyancer for an update on their transaction.
The pressure on staff to deliver more transactions every year could well be part of the reason the number of practising conveyancers across the industry is down. Lower job satisfaction could easily drive them to another firm or into retirement, and in the long term, this is bad for any business.
To be truly productive, the gains must be sustainable. Your team must be able to deliver more transactions per person without undermining the wider business. Achieving this requires a company-wide commitment to innovation, an openness to external help, and a wholehearted embrace of technology.
Last week, Search Acumen launched a Conveyancing Productivity Index calculator and by inputting a small amount of information, conveyancing firms can see exactly how productive they have been in the past year and how this compares with the market as a whole.
We hope and expect it will prove an eye-opener for partners and managers across firms of all sizes, and a clear-cut measure of your productivity performance. The tool will also provide some steps your firm can take to improve your rating.
Once you understand how productive you are, the question then is, are you ready to improve? Conveyancers and solicitors are in many ways ‘traditional’ professionals, respected experts, specialists in their field, who work on the basis of their legal acumen and knowledge of past cases. But with these qualities comes a conservative instinct and often a reluctance to review a firm’s practices, to change ways of working or interact with new technology.
A preference among conveyancing firms to undertake payments via cheque rather than online is symptomatic of this conservative approach to business and process. Unlike many other industries where cash flow is crucial, a disproportionate number of small conveyancers continue to prefer payment by cheque.
And yet the cost of a cheque in lost time adds up – it must be written, posted, received, processed internally, paid in at the bank and receipted. A Bacs transfer is instant, and requires hardly any paperwork or staff time. Multiplied across a firm’s annual transactions, this seemingly small inefficiency can add up to several working days of wasted time, which is a loss that the average firm simply cannot afford.
Perhaps more worryingly, many fail to prioritise a shift to payment by Bacs transfer even though they know the flaws of using cheques.
Why does this happen? Either firms are not regularly taking a strategic look at their processes and productivity levels, or they are not willing to invest in upgrading their IT. Or perhaps the most likely reason is they intend to do both of these things, but haven’t yet ‘found the time’ to take action.
So how do conveyancers become more productive? Here is my productivity checklist for conveyancers:
- Review your internal processes. Cheques, for example, are time-consuming and retrograde in the age of internet banking. A Bacs payment will save you and your client time and allows payments to be made quickly and transparently.
- Upgrade your IT, accounting and case management systems, and automate your anti-money laundering checks. Once you have spotted internal processes that could be improved, investment in technology is usually the best way to deliver that improvement and sustain it.
- If you are not an expert in IT, accountancy, process management or marketing, buy in help from those who have the acumen. Employing a proactive search provider will reduce your workload without the cost of an overhead.
- Improve the customer service experience. How user-friendly is your website? Do prospective clients feel they need to call you to get a quote or can they get an automatic quote online? If you can cut out unnecessary calls and emails, you can save several hours a week.
- Effective transaction communication – the same principle applies even more to third parties in a transaction, such as lenders or other solicitors and, of course, your clients. Often proactively providing updates on a transaction automatically, such as by text or email, can save you time answering chase calls and emails.
Not every firm can deliver a 55% increase in productivity in three years. Many do not need to, because their profit margins and staff satisfaction levels are healthy. But most firms, if not all, can make at least a small improvement in their productivity, and that will pay dividends in 2017.