The first business to announce its intention to invest in law firms has already spoken to more than 25 interested practices, it has revealed.
However, In-Deed’s half-year results have revealed a very slow start to its online conveyancing business, with only 120 instructions between its launch on 23 May and 30 September, with income of just £3,000.
This has led to the company reducing the conveyancing fee some buyers are charged.
Earlier this month In-Deed – which listed on AIM in June and has £4m in the bank – announced that it was looking for approaches from “successful and profitable provincial legal practices” with the aim of building a leading consumer legal brand.
Co-founder Peter Gordon, also In-Deed’s managing director, said: “It’s really early days but we’ve made great steps in our first six months – enjoying more than 10,000 visits a month and huge interest in our proposition. We are confident that our customer base will continue to grow particularly with some of the new initiatives we have in the pipeline.
“We’ve had phenomenal interest following our announcement to invest in regional law firms and have had discussions with more than 25 companies so far.”
The half-year report said that with most home owners only moving house once every 12 years, “we have concluded that traditional advertising solutions are most unlikely to yield acceptabl
e returns giving extra challenges to materially increasing brand awareness. In addition, we continue to have ambitions to offering beyond residential conveyancing”.
It continued: “Taking these factors into account, the board has decided to accelerate the exploration of opportunities arising from the Legal Services Act which would potentially allow In-Deed to own one or more legal firms, or majority stakes therein. This could enable In-Deed to capture margin, by undertaking legal work directly itself, as well as provide additional distribution.”
Chairman Harry Hill, In-Deed’s other co-founder, has previously outlined the problems the company has had in converting visitors to instructions. This has led to the introduction of telesales and the half-year report said: “It is too early to reach firm conclusions about the efficacy of this approach although we believe it will have a part in our business model going forward.”
The report said there was going to be greater focus on lead generation in the coming months, rather than just marketing the website, “which have potential to reduce the cost of customer acquisition”.
On pricing, the report said: “We have taken a close look at the price of our product and we believe that it is competitive in the mid-market and represents good value for higher-value property. At the lower end (sub £200,000 purchase/sale price) we were less competitive and in September we adjusted our pricing downwards but without loss of margin to In-Deed.”
The report said In-Deed’s two panel law firms performed well, with a third set to join before the end of 2011.