Innovative Thinking

I am a partner at Dickinson Dees LLP and head of the volume business team. Dickinson Dees LLP is a 76 partner law firm with over 900 staff. The volume business team consists of 250 people and its products include commoditised legal services such as remortgage, conveyancing, repossessions, debt recovery, wills and home information packs (HIPs). The team was set up in 2000 with 12 people, and has grown rapidly since that date. Our clients include major lenders and firms of estate agents. The aim of the team is: “To be the market leader in the world of commoditised legal services.”
The Clementi Review and the subsequent Legal Services Bill have had, and will have, a significant effect on my industry. The Bill when enacted will allow non-solicitors to be partners in law firms and will enable law firms to raise external funding by disposing of equity in their businesses. However, the major consequence for our business will be to end the near monopoly that solicitors now enjoy in the provision of legal services to the general public. This is the ‘Tesco law’ that has received so much attention in the press. A recent survey by Capita stated that over 60 per cent of the public would be happy purchasing their legal services from such organisations. The commoditisation of legal services, and therefore the concentration of the provision of those services in large organisations, has already began. Tesco has launched a conveyancing service, Halifax ‘a legal club’, the AA are providing legal solutions and the Co-op has introduced ‘Co-operative Legal Services’. Even the Labour Party has got in on the act by offering reduced priced HIPs to their members. In addition, Capita has set up Optima Legal Services and purchased two law firms.
At present, the organisations mentioned above can only provide legal services to the public by sub-contracting to law firms. After the Legal Services Bill is enacted they will be able to do this in-house. These developments provide huge opportunities for our business, but also huge threats. We have been monitoring and reviewing the situation closely, and took the decision some time ago that we needed to diversify our product range, re-brand our offering and grow rapidly to meet our stated aim.
Our volume business grew out of our lender clients launching direct ‘fees free’ remortgage products in the late 1990s. Debt recovery work was the original volume business carried out by law firms, but remortgage was the next large area to be introduced. The progress since 2000 has been rapid, and controlling this growth has been a major challenge. Remortgage gave us access to some large lenders as clients, and a repossessions business followed soon after. Volume conveyancing was introduced in 2002, and has grown to be the largest team, both in terms of turnover and people employed. Volume conveyancing is the most challenging work we carry out, as moving house is a personal process, and customers often need their hand holding. The other big issue with conveyancing is the number of people we interact with during a transaction. These include the customer, estate agent, lender and the conveyancer on the other side. Finally, the technical input is a lot higher than other volume legal processes.
In terms of new products, the big development in the industry over the past couple of years has been HIPs. In its 1997 Manifesto, Labour promised to find a solution to gazumping. That solution became HIPs. A HIP switches the collation of certain basic information in a residential property transaction from the buyer to the seller. The idea is that the seller will be better informed, transactions will go through quicker and there will be less chance for gazumping to occur. Latterly, the provision of the Energy Performance Certificate (EPC) has moved the benefits of a HIP to the ‘Green Agenda’. Three years ago we recognised that we were ideally placed to be a leading provider of HIPs, we already provided a lot of the information as part of the conveyancing process. As well as being income generative in its own right, we also identified that HIPs would accelerate the consolidation in the conveyancing industry. This process had already commenced, partly due to the on-set of e-conveyancing.
As a result we developed and launched our own HIP solution, Ownership. The launch occurred on 2 February 2006, in readiness for the planned launch of HIPs later that year. There have been a number of well documented government u-turns on HIPs, the latest on 22 May of this year, nine days before HIPs were due to go live on 1 June. The u-turn put the implementation date back to 1 August, and then only for four bedroom houses and above. On 22 May we had 40 people trained and ready to produce HIPs, major contracts in place with estate agents, lenders, builders and subcontractors, and had completed extensive training regimes with our clients. The u-turn forced us to radically re-think the business, with the result that budgets and staff had to be re-allocated. We thought that the scheme was dead. As a result we had to reallocate the staff in the HIPs Team, whilst retaining a nucleus of a team in case HIPs came back. Our budgets had to be recalculated to take account of the lack of HIPs income. After a couple of weeks it then appeared that HIPs may be back on the agenda, and may launch on 1 August after all! We then had to have two budgets for the financial year, one with, and one without, HIPs.
When 1 August came, Phase 1 of HIPs was introduced (four bedrooms and above). Phase 1 was seen as very much a trial phase, and we could not be sure that HIPs would definitely come in until the comencement order for Phase 2 was laid by the government. We were delighted to receive the news of the commencement order on 17 August, and at last we could finalise our budgets and proceed with some confidence.
The whole HIPs experience has highlighted the fast moving and fluid nature of our business. We need to be able to react quickly to change, whether that be client or government driven. If HIPs had not come in, the core business would have remained strong and on track, but our expansion would not have been as aggressive as originally envisaged.
Our efforts in the HIP world have had major effects on our business. Apart from the obvious negatives stated above, our involvement has been very beneficial. It has propelled us away from our competitors and established us as a serious player in the commoditised legal services world. We are a top-ten HIP provider, with only two of our major competitors similarly positioned. The others in the top ten are search providers, panel managers or specialist HIP providers. It has allowed us to win some key contracts for conveyancing which we otherwise would not have had, and has also allowed us to add key people to our business, which has further strengthened it.
As well as developing Ownership, we have moved ahead with the re-branding of our business. Dickinson Dees LLP has an excellent reputation in legal circles. The core firm has large prestigious offices on the Quayside in Newcastle and in York, Tees Valley and London. It employs lots of excellent solicitors who tackle large corporate transactions or pieces of litigation, largely in a traditional way, and charge accordingly. Our volume business is completely different. We see less than five per cent of our customers so do not need prime office space. We handle thousands of new matters per month at a low unit cost, and the majority of our employees are not solicitors. IT plays a big part in our business, as does the need to be flexible and respond to customers’ needs quickly. We are a young, IT focused, buzzy organisation, which is a great place to work, and where customer service is a top priority. The message with volume is different to the core firm and, therefore, the brand needs to be different.
As well as re-branding, we are in the process of putting the business into a separate legal identity, albeit wholly owned by Dickinson Dees LLP. This separation will allow us to take advantage of the possibilities to be opened up by the Legal Services Act, in particular a possible flotation of the business in the future. The business is an extremely exciting one to work in, which offers lots of opportunities and challenges going forward.

Nigel Emmerson is a partner and head of the volume business team at Dickinson Dees LLP. He can be contacted at nigel.emmerson@dickinson-dees.com