High street solicitors have lost control of conveyancing transactions and have allowed estate agents to become clients' main advisers, not only about properties and mortgages but even about which solicitor to use.Agents steer clients towards cheap solicitors, and whatever we may say about quality of service makes no difference.
The only solution is to regain control; this means taking agents on at their own game.
Until three years ago, solicitors in Glasgow acted as agents in just 6% of transactions but now 30% of all properties sold in the Glasgow area are through solicitor estate agents.
If they can do it, why don't we?One reason is that our professional rules hamper us.
Estate agency is a risky enterprise for an individual firm.
The Glasgow experience was a success because of a combined effort by 150 firms.
Our practice rule 6 makes such a joint venture virtually impossible by decreeing that if independent solicitors' firms form a joint estate agency they will be considered to be associated practices.
The result is that if firm A acts for a vendor, no other firm involved in the same agency can act for the purchaser.Rule 6 claims that there is a risk of conflict of interest.
This may be true if a single firm is also the estate agent, but the risk decreases as more firms are involved in the joint ownership of the agency until a point is reached at which any real conflict is so diluted as to be negligible.
At what point this dilution can safely be assumed to have occurred is arbitrary, but probably the involvement of four or five firms would be enough to satisfy any concerns.We must avoid seeing problems where none really exists.
The danger of clients being badly advised is greater under the present system, where solicitors rely on agents to refer work and are wary of upsetting them.
Subject to simple safeguards, the conflict of interest argument does not justify unnecessary restrictions on solicitors forming jointly owned estate agencies.Should a pedant claim that any risk of conflict, however minuscule, is unacceptable, we could provide that if a member firm acted for a purchaser that firm should not share in the estate agency profits arising from that particular transaction.
An unspoken fear is that a change might allow authorised conveyancing practitioners (ACPs) in.
If solicitors offer estate agency, how can we argue that it is against the public interest if lenders offer conveyancing?The arguments against ACPs remain strong.
The genuine risk of a conflict of interest is considerably greater where a mortgage lender owns an estate agency and also supplies the conveyancing service.
Imagine the pressure upon an employee not to advise a client to withdraw, losing the employer not only the full estate agency commission but also the profit from the mortgage and related financial services.
Lenders may claim that they would put the client's interests first, but look at their record on the sale of financial services.By contrast, the vast majority of solicitors abides by a rigid professional code of conduct.
Clients are protected by the Solicitors Indemnity Fund and solicitors are subject to severe disciplinary sanctions.Solicitors should not be given special dispensations; simply a relaxation of the restrictions imposed on us by our own professional body that make it difficult for us to compete with our rivals on equal terms.
I urge the Law Society to amend any rules which discriminate against solicitors' firms forming jointly owned estate agency practices.
The time is well overdue for deregulation.
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