Conveyancing on a Conveyor Belt: Property, Lease and Business Transactions

by Ambigesh Sivapatham LLB (Hons), LLM, Solicitor

04 November 2020

Industrial Design Generally

Adam Smith's pin factory paradigm is a well-known one - it states that by dividing up a task into its constituent parts, then seperating out those tasks to be conducted by different people or machines, output can be vastly increased. As each process is conducted in a specialised way, two benefits are gained. First, the process should be carried out at a higher quality, because specialists handle each step, and secondly the process should be able to be completed faster be cause each node in the process is concentrated and specialised on its own task. Ideally, by properly setting up the production process, the end product should be of higher quality and be produced in a much lower time, with only a minimal increase in overall costs. The highest aim, then, is a high quality, low cost-per-unit product.

This approach, in general, should not be scoffed at. It has lead to very large strides in the quality of life for billions around the world by creating cost efficiencies in every sector, from pharmaceuticals and computer hardware production to food safety, transportation and building materials. This techniques underpins the progress of countries that are considered developed and developing.

There is one key point underpinning all processes which can be made efficient in this way, and that is: standardisation.

Perhaps the most convenient metaphor for this industrial design would be a conveyor belt. Everyone attending that conveyor belt gives the same treatment to each item passing through the coveyor belt. This means that the same treatment is given to every pin. When you make a pin on the conveyor belt you get a conveyor belt pin, and when you put the law on a conveyor belt you get conveyor belt law.

Industrialisation of Property, Business and Lease Transactions

Legal services have been undergoing a similar kind of change as other sectors - though in general more slowly - towards standardising transactions such as the purchase and sale of residential properties, commericial properties, tenancies, leases and business.

In some circumstances, the level of standardisation is extreme, with clients merely filling in a set of input fields and a computer server generating the output document and providing it to the client to implement. In other circumstances, the level of standardisation is more subtle, for example where a precedent document is used as a template, but is tailored to meet the needs of the client, which are discussed face-to-face with a solicitor.

Solicitor firms are in a special place in the economy. The UK legal sector makes up over 1% of its Gross Domestic Product. Solicitors are specifically regulated to ensure that they are educated, trained, and continously kept at a high standard. Solicitors are part free-market service providers, and part extensions of the courts.

However, the pressure to reduce fees has led to perhaps what may be described as the over-standardisation of work. Fee earners and partners will, naturally, spend less time with a file to reduce costs and cut quotes. For example, in the very highly competitive fee brackets, your conveyance may be done solely by a paralegal, without proper oversight from an associate or partner. I have had personal experience of dealing with one of the country's largest conveyancing firms, who discharged a mortgage without completing the transaction. When we enquired as to what happened, we were only met with a sorry attempt to assure us that nothing untoward had happened and that the relevant case worker had been properly "dealt with".

Further, many firms do not keenly negotiate or properly advise on the terms of a document, and the client is merely told to turn up at the firm's office, sign, and leave, without really understanding the specific terms that they have agreed to. If you are a regular or semi-regular user of any transactional services (including those relating to residential or commercial property), when was the last time that your solicitor went through your lease, sale and purchase contract or transfer deed, page-by-page? If you answer was "recently", then I recommend that you stick with your firm - you have the benefit of an increasingly rare luxury.

This means that, where before, solicitors would speak and co-operate with their client to limit risks and accomplish the client's outcomes, now the role of supervision, discretion and proper judgement are increasingly being left to the wayside - all to shave those last couple of pounds off a quote to make it more competitive.

The Consequences of Conveyor Belt Law

And what is the outcome of over-standardisation? Well, in short, losses. Losses for clients who are left with bad lease terms, such as break clauses they were not aware of, service charge which they did not foresee, and unreasonable rent increases. Losses for the home buyer who finds out that they bought a long lease, instead of a freehold and will have to pay unforeseen fees and exorbitant lease extension costs. Losses for solicitor firms who provide those advice-cutting services and get sued. Losses for everyone when the costs of obtaining insurance cover for residential conveyancing services shoots up because of the increase in claims, which results in fewer firms, less client choice, volatile pricing and a more predatory market practices.

Again, this doesn't mean that standardisation is a bad thing. Word processing and e-mail communications have brought so much accessibility to legal services. There is a place for standardised file processing where the underlying capital value is small and the area of law works well with standardisation. But too many firms are forcing cheaper, conveyor belt services on clients who really deserve more. Next time you get a quote from a firm, think to yourself, "what am I actually buying?". Is it a quick pass off from secretary to case worker who fills in some blank fields and gets you to sign? Or is it quality time with a solicitor, discussing what the next steps are, how you want to proceed, and what risks you are willing to accept?

In his 1936 iconic work Modern Times, Charlie Chaplin comically expressed his very serious concerns of the effects of industrialisation on mental health and artistic freedom. I think his work speaks equally to the effects of over-standardisation in the legal sector. Perhaps Charlie Chaplin expressed it better than I ever could.

Modern Times (1936), Charlie Chaplin

All opinions are my own and not of SIMO & Co Solicitors.

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