David Jabbari Talks News
07
David Jabbari
talks news
The Managing Director of Consumer Law at Parabis Law LLP outlines key issues affecting the legal market, considers the impact of the General Election, and explains why the legal market is maturing.
W
hat a great time to be writing a news piece on the legal market. It’s not just the influence of the recent election but the growing sense that we are entering a more mature phase of the market postLegal Services Act reforms. My focus in this piece – naturally enough – is the Consumer Law market which has been like the Wild West over the last two years. Our job in reacting to new developments is always to see if they add up to a stable picture of what the consumer law market will look like 10 years from now. I believe that they do. Let’s start with the election, avoiding any excursion into politics! Regardless of the result, perhaps the most important thing is that there was a decisive outcome: the constitutional law experts were not required. Markets dislike uncertainty, and those areas of consumer legal services that are most directly pegged to the success of the economy, notably conveyancing, can perhaps breathe a sigh of relief that major economic shocks have been avoided. There are of course many areas of consumer law that have reasonably inelastic demand relative to the state of the economy, such as Probate, and to a lesser extent Divorce. While some argue that general economic growth may be hampered by uncertainty over the timing and result of the in/out referendum on the EU, it seems unlikely that this will have very much impact on the domestic market for legal services. Indeed, something as profound as withdrawal from the EU, and its impact on individuals and companies, is likely to be a gold rush for lawyers when and if it happens! After this preamble, I will pick up a few key news items that stood out for me over the last few weeks. Conveyancing Sticking with the election, we should feel confident about predicting sustained growth in the housing market over the next few years, which will ensure that the conveyancing sector stays buoyant for the immediate future. It has been a very good time in the conveyancing market. The annual percentage increases to March 2015 on key indicators speak for themselves: number of house purchase loans (16.4% up), number of remortgage loans (19.3% up), and number of loans to first time buyers (20.4% up). Interestingly, a recent research report by Post Office Money suggests that lawyers are not seeing the same rate of fee increase as estate agents. In the period since 2004, average conveyancing fees have increased by 37% but this compares to an 87% increase in Stamp Duty and a 61% increase in estate agent fees. Given the high levels of shortage of conveyancers in parts of the conveyancing market, the low fee rate increases are a reminder that we must learn the salutary lesson from the PI market about the negative effects of a race to the bottom on price.
‘CMCs do have a role at a certain strata in the consumer law market but this is surely at the very low price end’
ML // June 2015