For tech-savvy firms, alternative business structures will highlight the power of partnerships within the conveyancing sector, says David Kempster, marketing director at MDA SearchFlow
Law firms can either view the arrival of alternative business structures (ABSs) as a significant threat or a valuable opportunity, depending on whether they are planning on being reactive or proactive to this change in the market. Practices that are already demonstrating innovation in areas like online transactions – whilst also seeking commercial and channel business opportunities – will no doubt welcome ABSs, as well as the potential alliances that can be forged between lenders, lawyers, agents and financial advisers/accountants.
In terms of ABSs, three questions are critical:
• Will increased competition improve the speed and quality of conveyancing?
• What can new entrants offer that the traditional practice cannot?
• Will the big brands ultimately prevail?
Because ABS legislation will allow greater competition in service delivery and new ways of meeting consumer demand for legal services, traditional law firms will need to take action in order to stand out in this competitive new market.
For a start, the arrival of ABSs will no doubt encourage the formation of “one-stop shops” for a wide range of legal services, whereby law firms partner with accountants, insurers and banks in order to provide a single seamless service. As a result, law firms will need the ability to communicate quickly and effectively – in other words, electronically – with one another, as well as with any other parties that are providing services under the same ABS umbrella.
Practices that are keen to switch to a limited status from a partnership will attract a different demographic (and therefore different attitudes) to both business and margin creation. In terms of conveyancing, technology will be the key change driver in all of this. Access to data and workflow, together with seamless connectivity to lenders with a recognised badge of quality (and therefore less risk), will become key elements in the business mix.
All of these factors will not only help to mitigate the fear of mortgage fraud, but will also play a key part in reducing operational costs and drive efficiencies. In this way, smaller practices could leverage themselves better to survive and thrive.
Online, connected processes – including streamlined data and document management – will be key to margin protection and onward survival. This aspect of ABSs is certain to affect how transaction efficiency and unit costs are managed, and therefore will encourage the widespread adoption of electronic processes even further.
Online processes will reduce inefficiencies and drive down costs by delivering information electronically, from source, to all parties visible in the transaction. As such, this model will require a new vision of the ideal platforms needed to connect the conveyancing industry together, including serious conversations about how data and documents are managed through the process.
At the moment, many firms are already feeling pressured to offer ever-greater service for ever-lower fees. The arrival of ABSs will continue to drive this market towards competitive pricing, which means that there will be a unquestionable need to use technology to automate as much of the legal process as possible.
The good news is that as long as firms are willing to be forward-thinking and proactive in this regard, they have nothing to fear from ABSs. In fact, an ABS – together with increased access to venture capital, as well as the hybrid of skills available within the ABS itself – could form a potent mix, and could help to deliver local expertise and service in a way that could effectively counter the national brand assault.