Foundation course: reconstructing your conveyancing practice

Traditionally payment for conveyancing services has always focused on fixed fees and has never had any roots in time recording which has been the basis on which the noisy neighbours in the litigation department have billed for their time.

This tradition has made it difficult for many of those involved in the financial management of conveyancing businesses to monitor performance and to plan for the future. How, for example, do you calculate work in progress; how do you track transactions and know when the work in progress is likely to become cash; and how, more significantly, do you know whether your conveyancing work is actually producing a profit?

For many businesses, questions of this type have not featured in discussions. This is because the free and regular flow of cash has led many to mistakenly believe all is okay financially.

Not the most objective and indeed reliable way of assessing profitability, but one that is not as uncommon as you might think.

Between us, the partners at our firm decided to challenge this approach. We needed a new method of work and a performance-monitoring system that could give us at any time of the day a snapshot of the financial status of our conveyancing business. This would also tell us at any point in time how much time on average our case handlers spend on completing each type of transaction, the hourly return on each type of transaction, and the average turnaround times for each transaction.

In the past 24 months we have introduced a different way of running conveyancing transactions. A system which I know from feedback received from staff that have long since left our shore, does not rest well with the traditionalists. So if you are one of those practitioners who fit this description I suspect that what follows will not sit comfortably with you.

I am not however deterred, because I can sleep well at night knowing that I am managing a conveyancing practice which is not only efficient, but also profitable. In fact, it is self-efficient and does not rely on financial support from our litigation partners, or indeed the bank. I am also confident that, unlike most traditional conveyancing practices, I always have before me a full and complete picture of the company's financial status without having to rely on any input from an accounts manager or accountants.

So why can I express so much confidence, and what is so different from conventional conveyancing practices?

Custom risk system

In May 2013 having designed and built a custom risk and case management system we began to scan all incoming post and move from a paper file to an electronic one and one which would always be visible and accessible to the client. This, I accept, is not a unique step, but what made our move different was our decision to attach to each piece of scanned post a time attribute and to use the item of post to create a time-related work task.

By doing this, and attaching a time to the task (e.g. preparing a report on a freehold title - 45 minutes) I have been able to track and analyse how long each transaction is taking to complete. I can also, by breaking the conveyancing process up into legal and administrative tasks, ensure that the right piece of work can be assigned to the correct level of case handler. I can track how much work each case handler has carried out and ensure that one case handler does not become too overwhelmed with work. I can also divert and re-route tasks when a case handler is ill or on holiday. The system also allows me to know exactly how much work remains outstanding, and more importantly, how long that work has been outstanding. There's no more walking into a room and having to assume all of the post lying on the desk has been looked at and is being attended too.

This approach also allows me to build in alerts so that I am notified if a transaction for which we have charged a fixed fee is taking longer than the average time and cost for a transaction of that type. I can then intervene at an early stage to find out why this is happening and, if the circumstances justify, look to agree an additional fee.

Greater transparency

The system also leads to greater transparency and a marked increase in the time it takes to process at transaction. The reason for this is that when the scanned piece of post is assigned, an email is sent to alert the client that a letter, search report or email has arrived and is ready for viewing.

This means the client sees the post the moment the communication arrives and is not left on someone's desk awaiting attention and dictation. The consequence of this is that the client is kept more up to date and we receive instructions far more quickly than we would if we were relying on pigeon post.

Good communication is at the heart of any high level customer service and the system we operate recognises this not only through the scanning and treatment of post, but also through giving the client a quick and easy route to communicate with us.

Our logbook through which post is accessed, is also used as an online portal for clients to upload documents and to communicate with us. I can recall attending a conveyancing course not too long ago and listening to representatives from some serious players in the market talking about their state-of-the-art case management systems, but saying their clients were not making use of the facility to access transaction records etc. Our experience is the opposite. We track client access and around 95 per cent of the 450 live transactions we run we can show regular and active client activity. Clients enjoy this ease of access and it has led to a high level of repeat work.

Fewer complaints

In addition to the live management information received we have been able to make a substantial reduction in our overheads by eliminating all secretarial support. We must be one of only a handful of national service providers who operate without secretarial staff.

We have also reduced our postal costs through greater use of electronic communication.

Other benefits which have come about very early on in the process include increased profitability, a reduction in complaints and compliance issues, faster transaction times and more significantly, greater client satisfaction levels with our service.

This new system has allowed us to grow from seven completions per month to around 175, using just a handful of conveyancers and a team comprising mainly of paralegals and trainees. A statistic which has catapulted our conveyancing operation into the Land Registry top 100 of firms based on number of monthly registrations.

We continue to develop our IT case management system and at a time when there remains a question mark over the future of the Law Society's plan to produce an IT system of its own, we are busy putting the final touches to our own. Very shortly, we will have a new system which will allow the representatives of those involved in a transaction to interact online with us in replying, for example, to additional enquiries.The sound financial grounding on which we are now able to operate has also given us a clear and well defined path to expand and, more significantly, to survive in a world where according to most commentators, the traditional high street conveyancer is likely within the next five years be a thing of the past.

Getting to this point has not exposed us to huge financial expenditure, on the contrary we have been able to achieve progress through careful restructuring and a commitment to continue to tweak and develop our in house technology. I am not saying it has been an easy road and we have had to make some tough decisions along the way. Keeping the vision and not allowing sentiment to get in the way has proved essential and has led to the benefits outlined above.

I am firmly of the view, with the recent demise of some large players, that it is the way in which we work and the tools which we use to manage our businesses that will make the difference between life and death in what has become a very competitive and cut throat conveyancing market.

 

SEVEN STEPS TO SUCCESS

Training: Put time into training, make sure everyone knows the plan and how it should work. Everyone working for you needs to ‘buy’ into your vision.   Tranparency: Be transparent with your staff and explain the objectives. Point out that you are doing this to ensure the longevity of the conveyancing department and to also raise client service levels. Benefits: Focus on the benefits. These include more control over work loads, more enjoyable holidays not having to worry about coming back to  a pile of unanswered post.   Tell clients: Make sure clients are told about this way of work before they instruct you. It will not be everybody’s cup of tea. Be brave and be prepared to turn clients away  if they do not operate in the technology world or are looking for a more traditional service.  Discipline: Emphasise the need for discipline. Everyone needs to follow the plan and share the vision. It only takes one or two fee earners to undermine the whole process. Tough decisions: Don’t be afraid of making difficult decisions. Making secretaries and non-compliant fee earners redundant will not only save you money in the long run, it’s also an essential element of the plan. Dissenters: Don’t be swayed by dissenters and non-believers. There will be plenty of them. Remain focused and keep to the plan. It does work but there will be bumps along the way.

 

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David Pett is a solicitor and director at MJP Conveyancing Limited

www.mjpconveyancing.com

 

 

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