Talent shortage and burnout are one reason we are presented with such a fragmented industry. Growing is difficult when so much energy is expended just standing still. Conveyancers are overstretched, with work that is increasingly complex and time-consuming, often not worth the fees. Of late, we’ve seen an exodus of valuable conveyancers. Joe Pepper, UK CEO of PEXA, informed MPs that 15% of conveyancers left the market in just two years, with another 30% planning to follow within five. Losing experienced staff prevents law firms from expanding by disrupting continuity, reducing expertise, and slowing strategic progress. A further issue is that it takes considerable time and effort to train a conveyancer. Despite automation, conveyancing remains a highly skilled, knowledge-based profession where experience is hard won, and technology is never a complete substitute. Without the people to handle the workload, even ambitious firms struggle to scale, leaving the industry trapped with small, overstretched firms.
A further reason for fragmentation is that traditionally, conveyancing has always been a local service. People pick a law firm on their high street because proximity matters for dropping off documents or meeting face-to-face. More crucial, though, local firms offer deep knowledge of the area: property prices, council regulations, searches and even sensitive issues like mining history or leasehold quirks. Recommendations, often from friends, family or estate agents, further reinforce the local preference. For marketing, a strong local presence and legacy also help win trust and thus instructions.
Unlike other sectors, conveyancing has never seen the level of consolidation found elsewhere. Growth in the industry in the case of the major national firms has been largely achieved by maximising referral relationships and attracting outside investment from private equity. There has also been growth from hybrid or consultancy models rather than outright mergers. Some firms expand by taking on panel manager roles, which allows them to retain new instructions, maximise utilisation and outsource overflow work. We also see private equity invested in the industry and employee-owned businesses have also shown that success is possible, often capitalising on their strong culture and local reputation.
The latest, most ‘fashionable’ approach to growth has been the consultancy model, where firms employ conveyancers as self-employed consultants. This allows the firm to take market share whilst still minimising overheads. The firm maintains a conventional arm while sharing fees with consultants on a flexible basis. While this allows growth without taking on excessive staff overheads, there are potential risks, particularly around PII.
One of the biggest barriers to scale in conveyancing is how firms actually win work. This isn’t, and arguably never has been, a traditional B2C market. Most law firms don’t invest in building direct links with the consumer, and as such, they have little access to them. The estate agent almost acts like a gatekeeper between the mover and the conveyancer.
Agents are typically the first stop for homemovers. They set the process in motion, and in doing so, control the flow of instructions. In many ways, conveyancing works like a supermarket and its farmer suppliers. The estate agent owns the customer relationship, while conveyancers remain in the background, competing for shelf space, removed from direct access to the consumer.
This is the very reason why referrals have become the lifeblood of conveyancing for many. Long before referral fees were formally permitted by The Law Society in the early 1990s, firms relied on estate agents for work, through entertainment and adverts in branch windows. The mechanism has changed, but the dependency hasn’t.
Referrals have always been the easiest way to keep instructions flowing, because of how close the estate agents sit to the consumer. For many firms, it remains the dominant route to sourcing work. Marketing simply isn’t a skillset law firms hold, so referrals are a ready-made pipeline.
This reliance on introducers comes at a cost, though. Rigid relationships are often bound by contractual terms that limit flexibility. The very model that sustains conveyancers also holds them back from growing.
Another barrier to growth is utilisation, as in how effectively a conveyancing firm turns staff time and resources into revenue. Profit in conveyancing depends on running at a high utilisation rate. The issue is that conveyancing is produced on demand - you can’t make more of it, and you can’t stockpile it. The unit must be constantly at capacity or near. Lots of firms fall over because they take on too much work. Yet the opposite is also undesirable - if you run under-capacity, your expensive conveyancers are sitting twiddling their thumbs and revenue is weak. There is a sweet spot for conveyancing where staff aren’t under pressure but also have enough work that they’re billing constantly at capacity. In order to get close to that sweet spot, firms need to control the two levers that drive their pipeline - being able to switch on and off to fine-tune capacity and getting pricing right.
Traditional attempts to scale up often fail because they ignore this delicate balance. Each case deserves time, care and attention to get the job done right, which makes scaling the business tricky.
Though local presence is important, conveyancers don’t see repeat business as often as they’d like. Most buyers and sellers only use a firm once per property transaction, and the long gaps between moves mean they often don’t remember who they used last time. Our data is evidence of this, showing that only 11% of movers return to the same conveyancer.
This pressure on loyalty may be another reason scaling is so difficult. Even trusted local firms can’t rely on repeat custom to grow because of extended timescales to move house, limiting the potential for anyone to dominate the market.
The sector’s ‘race to the bottom’ on fees means many firms undercharge just to stay competitive. It’s tricky to raise fees when you have buyers with little appetite to pay more for legal work. Why? They’re already juggling agent fees, stamp duty and moving costs. They’re happy (…or happier) to pay the estate agent because they view them as a worthy cost, someone helping them to secure their dream home. Meanwhile, the law firm is often seen as an obstacle preventing them from getting the keys. Most movers don’t value the service the law firm provides, or more to the point, even understand it. This ignorance, coupled with law firms’ lack of confidence to charge for the value they provide, keeps fees low and margins tight. This means less capital for investment and makes expansion riskier. There is an issue with the business acumen of firms that act with knee jerk reaction to price competition and ignore the value of their other service attributes. The sector is ultimately trapped in a low-fee model that isn’t scalable, and that’s why dominant brands fail to emerge.
Growth in conveyancing is also constrained by the sheer complexity of regulations. Mass-production techniques are challenging in such circumstances without compromising compliance. Regulatory costs are increasing, squeezing already tight margins, while compliance obligations continue to expand. Conveyancers are now expected to navigate AML and environmental searches, become climate change experts, and, more recently, act as tax advisors.
It’s a judgement-intensive role, and as Brian Rogers FCMI mentions in his article, The Conveyancing Time Bomb, PI insurers are watching closely with caution. Problems with conveyancing don’t manifest at first, but will do years down the road, driving premiums sky high for larger firms. Simply put, regulatory pressure and escalating liability make scaling a conveyancing firm a costly and risky proposition.
How do we fix a problem like fragmentation? We start with raising fees. Once colleagues are paid their worth, companies are making healthy profits (not teetering on the edge), and the consumer appreciates the worth of the service, the industry can heal and growth can occur.
It goes much deeper than just fees, though. We need to repair the fundamental structural disconnect. Conveyancers need direct access to the homemover. Professional targeted marketing that reaches homemovers directly is one such solution and this would become the equivalent of the farmer’s market in our supermarket analogy. The conveyancer is beholden to the party that feeds them - the estate agent. This is a flawed marketing process because you cannot control the work flowing to you. To rectify this, you could start to explore other avenues to take control of your workflow. Our Convey Alerts, where we notify you when a former client relists their home for sale, could be one such marketing tool that will provide conveyancing leads for solicitors. To find instructions outside of introducer relationships, the SRA should allow firms access to more conventional marketing tools.
Furthermore, breaking the chronology of a move would promote conveyancer engagement. This plays into the sale-ready, upfront information piece that we continue to advocate for.
Growth is key if we want to increase influence. The lack of leading players means conveyancers’ voices are often drowned out unfairly. The industry needs greater authority to be listened to when it comes to important initiatives like the housing reforms.
There is an argument that conveyancers are not hungry enough to scale up. In many industries, growth comes from aggressive, hungry competitors who take market share. Perhaps this just isn’t how the conveyancing sector operates, nor wants to. If we even had such growth-hungry players, does the sector even have the capacity to create dominant brands while faced with such a shortage of talent? The sector has little room to grow because many firms are running flat out already and struggling to source talented solicitors.
The cold, hard truth is that if you’re looking to build a large, fast-growing business, conveyancing may not be your first choice. This doesn’t bode well for the industry.
In a market that is fragmented for entrenched structural reasons, the role of cooperation between firms becomes critical. The Home Buying and Selling Council, the Bold Legal Group, The Conveyancing Association and any and every other body, including The Law Society and The Society of Licensed Conveyancers, become pivotal. These are the organs that can articulate and promote meaningful change - and which should be enthusiastically supported by the industry.
We need those big brands to advocate for the conveyancer. This would go a long way to help alter perception, retain talent and see the industry thrive.