Six months on from the introduction of new transparency rules by the CLC last December, CLC research published at the end of July showed that just over a quarter (27%) of firms said that customers have started to shop around more in the last year when choosing a legal services provider.
The Annual Regulatory Return (ARR) for 2018/19 was completed in June and July by all 212 firms that were licensed by the CLC for the previous 12 months – of which 30% are alternative business structures (ABSs).
Brexit has become the most commonly cited business risk over the coming year, with 30% of firms highlighting it, compared to 19% last year. There is also greater fear of cybercrime (cited by 26%, up from 22% last year), but fewer firms identified fraud/money laundering as a risk (25%) compared to 2017/18 (34%).
This drop is likely to reflect the greater attention licensed conveyancers have been paying to fraud: just 12 firms said they had been the victim of fraud in the previous year and only three incurred a cost as a result, the most being £15,000. A further 20% of firms reported stopping an attempted instance of fraud (17% in 2017/18).
Some 23% of firms had made at least one general suspicious activity report (SAR) to the National Crime Agency over the previous 12 months, while 11% made a ‘defence against money laundering’ SAR – which is where a firm seeks consent to carrying out an activity that may otherwise result in committing a money laundering or terrorist financing offence.
Personal recommendation (37%) was the most common source of conveyancing work, followed by an estate agent referral (25%). A direct approach from the client (13%) was the next most likely.
The majority of firms reported that their conveyancing fee levels remained steady, although a third expect them to rise in the next year.
Other findings included:
- Though a number of CLC-regulated firms are very large practices, on average they employ four full-time qualified fee-earners, six unauthorised fee-earners and 12 administration and support staff. Over half of firms (60%) reported that at least some of their legal work is carried out by non-authorised staff.
- Half of firms received at least one complaint. Firms most commonly received between one and five complaints (34%).
- 85% of firms had at least some measures in place in relation to bullying and harassment, but only a small proportion had a published policy. Small firms were more likely to not have any measures in place (25%) compared to large firms (5%).
CLC chief executive Sheila Kumar says: “The efforts to improve transparency for consumers are still in their early days, but the very high levels of compliance with our new rules – and the signs that consumer behaviour is starting to shift – is a testament to CLC-regulated firms’ commitment to the public interest and enabling consumers to make an informed choice of property lawyer. When the rules were first introduced practices were concerned that publishing prices would create a ‘race to the bottom’, but this has clearly not happened.”