The bosses of two of the UK’s largest conveyancing firms, both backed by private equity, said yesterday that growth by acquisition was not high on their agendas.
David Grossman, CEO of the Simplify Group, the largest conveyancer in the country, said future growth would “not necessarily” come through buying law firms, which he described as “hard work”, as opposed to organic growth.
The Simplify Group came together in its current form in 2019, when its private equity owner, Palamon Capital Partners, bought My Home Move, which owns Premier Property Lawyers.
It includes six conveyancing firms and the UK’s largest panel manager, and employs over 2,000 people.
Speaking at the Conveyancing Association’s annual conference in London, Mr Grossman said: “Although we may be the biggest, in market share terms compared to any other industry we are really very small.
“Firms that are serious about conveyancing will take on more and more work, which is a good thing. We are not trying to take over the market.
“The larger and more serious players will get bigger, not necessarily though by buying other firms, which is hard work.”
Mr Grossman said that in the months directly after the pandemic, Simplify recruited 72 experienced conveyancers without acquiring a law firm.
Nick Hale, group CEO of O’Neill Patient Solicitors, owned by private equity house Inflexion, echoed the message that buying smaller firms was not the way forward.
He said the group would grow its share of the market, but “not through acquisitions”. We reported last September that the group has changed strategy and put acquisitions on hold.
Simon David, chief executive of Thomas Legal, predicted there would be “some consolidation” in the conveyancing market over the next five years, but not “fundamental change”.
Mr David, whose firm is backed by private equity from BGF, said: “I don’t see a lot of private equity coming into conveyancing. It’s a high-risk area for many because of its unpredictability.”
However, he highlighted the challenge for law firms wanting to create their own proprietary technology without external investment.
He described developing an automated remortgage service at Thomas Legal’s sister company Equilaw as “extremely difficult and much more time-consuming that we thought”.
Mr David went on: “We thought it would take one year, but it took three years and at least £1m of investment, and we’re still on the journey.”
Viv Williams, director of Viv Williams Consulting and a well-known merger consultant, said a large number of conveyancing practices “do not practice in a way people want to invest into”.
He estimated such firms represented about a quarter of the 4,000 doing conveyancing.
Mr Williams said there were “lots of offshoring opportunities” that firms could be using. “Firms that don’t take advantage of investment in technology and people won’t survive the next five years.”
He talked about one conveyancing firm with two equity partners that thought incorporating would encourage younger solicitors to take a stake in the firm. None of them did and now the firm was up for sale. “A lot of firms are looking for a buyer.”
He predicted a “very broad consolidation” of the conveyancing market over the next five years, with the large firms, backed by private equity, growing and many small practices failing. “That’s the tragedy of the next five years.”