Due diligence essential as 153 law firms enter cessation period!
The Solicitors’ Regulation Authority has revealed that 153 law firms have entered the “cessation period” because they’ve failed to secure new Professional Indemnity Insurance cover. This news heralds an even greater need for brokers to exercise due diligence in recommending conveyancing services to clients.
‘The legal services sector is going through some significant changes’ commented Eddie Goldsmith, Senior Partner at property solicitors Goldsmith Williams ‘and this current situation is one of the consequences of change. The 153 firms who are in this “cessation period” can continue to seek insurance but cannot take on any new clients as they prepare for wind down. Already the number of law firms has dipped to its lowest level for many years and these casualties could now take the number even lower. In this environment of instability the strong relationships that brokers have forged with conveyancing firms really comes into its own.
Buying a house is a stressful experience and clients already rely on brokers to advise them on a firm to take their property instructions. Now, as they read in the press about firms closing their doors, they will place even greater reliance on their broker’s recommendation. In turn brokers need to be wholly confident about the recommendation they make.
In my own firm we’ve developed a due diligence pack to help brokers with the necessary checks prior to recommending a conveyancer. In exercising due diligence brokers should ensure they have sight of the firm’s Professional Indemnity Certificate and the Principals’ Practising Certificates. Furthermore, knowing that you are dealing with a firm that sets the bar high in quality is very reassuring so look for firms that hold ISO 9002, Lexcel or other similar independently accredited quality systems and the Law Society Quality Conveyancing Scheme. Finally a check of the firm’s Business Continuity Plan gives you the reassurance that your client’s matter will continue to progress, whatever the circumstances.
In times of uncertainty these checks give you, and equally importantly your client, confidence that the firm instructed will be around to conclude the property matter!’
Content correct at time of publication