Attendance at the Law Society’s property conference in London last week was the highest since 2008. Perhaps this demonstrates the need for firms to come together for support as they grapple with upheavals in the legal services sector and conveyancing ­market.

Chancery Lane’s former property ‘tsar’ Paul Marsh, consultant at Surrey firm Downs, outlined challenges stemming from low transaction volumes, new regulations and the introduction of alternative business structures. Marsh predicted there will be no significant increase in work for the next five years, resulting in overcapacity and a ‘brutally competitive’ market, with more downward pressure on fees.

He warned: ‘High street firms face a period of intense competition. They will have to get more than their fair share of the market, which will mean competing against each other and thinking how to get extra transactions.’

An important part of that effort, said Marsh, will be marketing. He advised firms to make use of every tool available, including the Law Society’s Conveyancing Quality Scheme accreditation.

Clare Rodway, founder of Kysen PR, a legal public relations specialist, provided some marketing tips, encouraging firms to consider the SWOT approach - examining their strengths, weaknesses, opportunities and threats. She advised firms to differentiate themselves from competitors, look at how to add value to their services, identify their unique selling proposition - and match these things to the needs of the market.

In common with most speakers, Marsh did not expect the advent of ABSs - marked at the beginning of the month by an application from licensed conveyancer Premier Property Lawyers to change its status - to have a far-reaching early impact.

‘If I had a shed load of money I don’t think I’d buy a conveyancing business. Firms will only be getting market share, which will not generate enough profit for investors,’ he said.

On the prospect of big high street brands entering the market, Marsh said they would only do so as a means to an end - to capture clients to whom they could sell other goods or services.

Speaking to the Gazette during the event, the chairman of the Law Society’s conveyancing and land law committee, Jonathan Smithers, also questioned whether investors would be interested in conveyancing firms. While ABSs might help smaller practices, particularly sole practitioners, who could attract a non-lawyer partner to help them to retire, he warned: ‘There is no silver bullet to make the conveyancing market better with external capital.’

His advice to struggling firms, especially if big high street brands enter the market, was to ‘compete on quality and not price; become known for your expertise in your local market.’

He said there would be room in the market for small local operations as well as big players, but that firms need to ensure: they are compliant with outcomes-focused regulation; understand their position in the market and their target market; have good management; and adopt good risk management processes. ‘Make sure your business is fit for purpose and do all you can to protect your business and ensure it is properly reactive if change comes,’ he added.

Yolande Barnes, director of residential research at estate agents Savills, offered other suggestions to help firms prosper, advising them to focus on landlords and investors. Barnes said there is a ‘fundamental structural change’ in the property market characterised by permanently low transaction levels, a decreasing reliance on owner-occupation and the increased equitisation of ­property.

Like Marsh, she forecast that the volume of transactions, which at under one million a year matches the lowest annual total since records began in 1959, is not likely to pick up. Barnes said the housing cycle went into reverse last year, with a switch from owner-occupation to renting, and the phenomenon of ‘letting to rent’, where so-called ‘second steppers’ let their home to enable them to rent a bigger property.

Aside from the increased focus on renting, she said there is a shift from reliance on mortgages to purchasing with cash, with private and institutional investors taking the opportunity to invest in property. ‘Equity has become very important. We are seeing market polarisation between equity haves and have-nots.’

Barnes said the move away from the traditional conveyancing market presents opportunities for residential conveyancers who are able to get to grips with the needs of landlords and investors.

‘Extend your focus to landlords and learn about the opportunities for investment businesses. If residential conveyancers can start to understand the needs of investors and how they can help people trade portfolios, that will help them,’ she said.

Referral fees were another talking point, following the government’s proposal to ban their payment in personal injury work. In a straw poll of the 150 delegates, 61% voted in favour of banning referral fees in conveyancing transactions, although 80% believed that even with a ban, fees would continue to be paid under a different guise.

Law Society deputy vice-president Nick Fluck reflected on the mixed response to referral fees, with some firms abhorring them, while others see them as a cost-effective way of marketing. He did not expect any ban to be extended to conveyancing and said that referral fees are something that the profession may have to live with. Given the state of the property market, Fluck suggested that ‘sooner or later we may all have to consider taking a walk on the dark side’.

He said the introduction of outcomes-focused regulation increases the challenge for those firms that do pay referral fees, which more than ever need to ensure they know the rules and are able to demonstrate that they have met the required outcomes in their dealings.

He reminded firms: ‘Never forget that chapter 1 [of the Solicitors Regulation Authority Handbook] outcomes override all others - treat your client fairly and act in their best interest.’

Similarly, Marsh saw no prospect of a ‘realistic or enforceable ban’, as neither the Legal Services Board nor the Solicitors Regulation Authority had any appetite to introduce one. Unlike in personal injury, Marsh said there is no public anxiety or anger around their existence in conveyancing.

Marsh said: ‘The public are not interested, and in fact are often pleased that firms pay referral fees to estate agents, because it saves them the trouble of having to ring round and find a solicitor if their estate agent can recommend a firm that does the job well.’

Marsh concluded his address on an upbeat note: ‘There is a good future for local conveyancers. Solicitors still have 90% of the conveyancing market.’