MIp25_0110:MI 12 Jan 15/12/2009 14:16 Page 21
Legal view | 25
Focus on
the future
You don’t get anywhere by looking in the rear view
mirror, says Eddie Goldsmith, senior partner at
Goldsmith Williams
2
010 will, I believe, be a year of transi- opportunities which present themselves. wants to ban them, which would mean an end
tion, when we all finally stop looking So what is the future going to look like for to fee payments for any legal work introduced
in the rear view mirror and being intermediaries? Well, on a positive note I not by brokers, estate agents and claims manage-
concerned about what has passed only believe that there will be continuing ment companies. The Solicitors Regulatory
and start to concentrate on the road demand for the services offered by financial Authority, which has the power to change the
ahead. advisers, but that the demand may even be rules, will be reviewing the issue during 2010
2009 has been a tough year for everyone. The greater than it has been historically. Why? and it will be interesting to see what they
credit crisis has had a more profound effect on Because the recession has taught consumers to decide. Personally, I find it hard to see how
the financial markets than anyone could have be canny with their money and I think it’s a referral fees, which are commonplace in most
envisioned and I’m not simply referring to the habit they’re not going to grow out of, even other sectors, could be completely banned. It
headline grabbing events: the collapse of global when better times return. Buying financial would not only be a retrograde step for the
banks; the freezing-up of the wholesale markets products is more complicated now that it has legal industry, but could potentially reduce
and the need for governments to commit bil- ever been and, ironically, the internet has added competition and choice for consumers.
lions to shore up the banking system. Even in to the complexity. Having instant and endless Another big step looming on the horizon
the intermediary market we have seen unprece- information at the click of a mouse is only use- for solicitors is what has been dubbed ‘Tesco
dented change: the end of the road for many ful if you know how to use it. Most consumers Law’. In summary, the Legal Services Act is
networks, clubs, packagers and brokers; a don’t, which is why I believe they will seek help being amended to enable new forms of legal
slump not only in the number of mortgage from professional advisers. practices to develop, including the ownership
transactions but also in the number of prod- However, the role of brokers is going to of legal firms by non-legal businesses (hence
ucts; and the end of sectors such as sub-prime change. Intermediaries still represent the most ‘Tesco Law’). I have no doubt that organisa-
and self-cert which have underpinned so many efficient and quickest way for lenders to crank- tions such as Tesco and other high street
broker businesses. up new business volumes and break into new brands will start offering legal services and,
With such dramatic changes taking place, it markets and when their appetite for lending although the new rules are unlikely to be intro-
is little wonder that so much energy has been does return, as it will, they will turn to brokers duced before mid 2011, a lot of preparatory
put into analysing what has happened and why. once again. But I think the nature of the rela- work will start to take place in 2010. This
But, as a colleague recently pointed out, you tionships they forge will change. They will want development will impact on financial advisers,
won’t go far if you’re always looking in the rear brokers to work with them in closer partner- who could see further erosion of their core
view mirror and, sooner or later, you’ve got to ship and, in order to do that, they may well business by the big supermarkets, who will
concentrate on the road ahead. And that is decide to work with smaller groups of brokers inevitably cherry pick the most lucrative busi-
what I believe will start to happen during 2010. rather than make products available to all. ness opportunities not only in the legal services
market, but also in mortgages, savings and
Recovery Support services insurance. 2010 will be the year when brokers
The focus from now on has to be on the future. There will also be changes as far as support need to strengthen their client relationships in
The question is no longer will the market recov- services are concerned, such as conveyancing. anticipation of this new form of competition.
er, but when? And when it does recover, it will One of the issues being hotly debated within So, challenges ahead for us all. But neverthe-
be those businesses which have been able to plan the legal profession at the moment is the future less a year in which we stop looking at what has
ahead that will be best placed to exploit the for referral fee payments. The Law Society been and start to focus on the future.
www.mortgageintroducer.com January 2010 Mortgage Introducer
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