The heyday of conveyancing panel management was when law firms were a lot smaller and could not handle the capacity required by a large estate agent referrer.
With increasing consolidation of conveyancing law firms into large corporations, this issue now only affects the very biggest agency groups, where a panel still makes sense.
In every other case, panel management is unlikely to be the optimal solution for the estate agent, the customer, or the law firm.
At a time when conveyancing was more fragmented firms were not set up to cope with the volume of work that larger agencies could send their way. For the agent, the benefit of panels was the ability to cope with the volume.
Capacity is no longer such a big issue. Property solicitors and conveyancers have got their act together and specialists are emerging to support the industry.
They have invested in people and technology and are able to ramp resource up and down to cope with demand.
Land Registry statistics show that the top 100 conveyancing firms by Land Registry volume, i.e. firms that have invested in technology and process management, have grown their market share.
As the specialist conveyancing firms get better at capacity management, what is the attraction of using a panel manager, where there is a risk of agents losing control over the transaction?
The key problem with panels is that the panel manager has very little real influence over the running of the firms in the panel.
Expecting disparate organisations with different levels of investment, culture, and competence to behave in the same way and deliver the same standards simply doesn’t work.
While SLA’s will dictate some of the basics, that is no substitute for dealing directly with the senior management of the firm doing your work who you can haul over the coals when things go wrong.
The other big problem is that the panel managers can attempt to extract too much revenue from the referral process, leaving both the agents and the law firms short changed.
It is a vicious spiral downwards. The panel manager’s return such a low fee to the conveyancers that the firms involved become disaffected and de-prioritise that work in favour of more lucrative work streams, thus impacting quality.
Equally, estate agents who should be expecting a minimum of £200 – £300 in referral fees – it was their referral after all – end up having that shaved. Lastly, the customer pays an inflated price for a poor legal service.
Panel management systems are unable to take advantage of the investment in technology that conveyancing firms have made as, in more cases than not, there is no two-way interface. This results in endless re-keying of data into the consumer portals designed to keep all the parties up to date.
The bottom line is that panel management looks very outdated. There is no substitute for an estate agency working with a modern high-capacity law firm that can build a first class legal product tailored to its needs, and who is answerable directly for any service issues.
The agent’s view – Steve Wayne, Benjamin Stephens Estate Agents, London
“I’ve been running my business for over 16 years and we have used mortgage panels over the years but have found nothing but problems with them,” he says.
“We’ve experienced some solicitors offering crazy money on referrals, but for me, I’d rather use a local solicitor who will be available to pick up the phone to me, any day of the week.
“The £300-400 we may earn by taking a solicitor’s referral is nothing to the £5000 a bad solicitor may cost us if they cannot provide a good quality service.”