The Law Society has urged residential conveyancers not to panic following the collapse of two large Yorkshire firms.

Leeds-based Fox Hayes, which employed 115 people, last week went into administration, joining Bradford-based property conveyancing and home information pack processing company Hammonds Support Services (HSS).

Administrator Begbies Traynor was appointed to Fox Hayes, which last month sold its commercial and private client business to another Leeds firm, Lupton Fawcett.

Administrator Deloitte was appointed to HSS at the request of the firm’s directors.

The business, which de­merged from law firm Hammonds in 2000, employed 243 people in Bradford and Manchester. The administrators confirmed 210 employees had been made redundant immediately. Discussions are under way to try to sell part of the business as a going concern.

Chief executive John Heller blamed the firm’s demise on the collapse in the property market and interest rate cuts. ‘We were a niche player in the residential conveyancing market. Following the interest rate cut in October 2008 we saw a drop of 80% in our remortgage instructions, and that put too much pressure on us,’ he said.

‘These are tough times for everyone and lawyers aren’t immune.’

The downturn in the property market has led to redundancies at firms across the country with north-west firm Stephensons the latest to announce cuts, losing 60 jobs. In the south-east, Blake Lapthorn announced a redundancy consultation.

Law Society President Paul Marsh said the direct model is no longer sustainable. ‘It was a business model that was bound to be put under very considerable pressure.’

But Marsh added: ‘That position is very different from well-established firms that operate on a different business model. In business it never pays to panic, but it is important that firms make hard-nosed decisions based on commercial realism.’

Peter Rodd, chairman of the Law Society’s property section, predicted that more firms solely or substantially dependent on residential conveyancing would go under in the recession.

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