Solicitors can use the advent of HIPs to turn the tables on estate agents and move into the property-selling market, writes Peter Morgan


The advent of home information packs (HIPs) represents both the biggest threat to, and the greatest opportunity for, solicitors in respect of retaining their share of the conveyancing market. Now that HIPs are here, they also offer solicitors a fantastic opportunity to turn the tables on the estate agents and independent financial advisers in getting to our clients - and prospective clients - first.



Why is this so important? Now, more than ever, other professions are chasing our conveyancing work. And if they cannot keep it for themselves, they will try and sell your clients to those who are willing to pay for the work. In other words, we lose control of the work input, and when that happens we start to lose our grip on that work.



If you doubt this, have a look at the latest terms of business of Sequence, one of the largest estate agency chains in the country. Sequence now includes an 'Instruction for home conveyancing' section, which specifies a sliding scale of fixed 'legal fees' from £449 to £1,349 for sales between £60,000 and £950,000. Reasonable rates you may think, but in the small print at the bottom is the rider that 'the law firm retains £386 plus VAT and disbursements and the balance of the legal fees are paid to Sequence in consideration of their provision of a home information pack; marketing; administration... and management of the Sequence Home Conveyancing Service'.



Let me make that clear: the sum of £386 is a fixed fee irrespective of the value of the property being sold. Also, don't forget that the sum retained by Sequence is in addition to the estate agency fees for selling the property. On a sale at £349,950, Sequence was set to receive a total of £5,363 and the lawyers £386.



In my view, only a law firm with a death wish would sign up to that deal, but the ramifications are twofold - solicitors are being marginalised in the conveyancing process, and estate agents are now becoming more adept at packaging conveyancing within the 'fee agreement' to provide, on the face of it, a 'one-stop' service. This is a trend that is now being replicated by other estate agents around the country and it spells big trouble for conveyancers if they do not start to compete with this service.



So where do we go from here? Diversification based on existing skills, market position and/or the service needs of clients is a relatively low-risk operation. For this reason alone, estate agency is a natural progression for property lawyers seeking to retain and develop their core business. Selling houses sits well with conveyancing because the common denominator is our client. HIPs give us a great marketing tool to get in first and sell the concept of the one-stop property shop.



We do not have to incur office start-up costs because those overheads are already being incurred and discharged from the revenue streams within the practice. The Internet has at a stroke created a level playing field for solicitors competing with estate agents to sell houses. Leading property portal Rightmove maintains that more than 75% of successful home movers use the Internet to search for property. Immediately, if you start selling houses you will be in the market for the same buyers as the established estate agents.



Furthermore, very few estate agents, despite their promotional literature saying otherwise, actually offer an in-house conveyancing, HIPs and property-selling solution. Solicitors can do so.



Selling houses offers a relatively simple and cost-effective solution, both to retain our existing conveyancing work and to create another income stream that complements the legal services we offer. Taking the easy option of doing nothing at all may well lead to disastrous consequences.



Peter Morgan is managing partner of Osborne Morris & Morgan, which has offices in Leighton Buzzard and Milton Keynes