Competition hots up

PREJUDICE: Chris Merritt | August 22, 2008 | The Australian

IN Victoria, the war between conveyancers and solicitors is almost over. But in Queensland, it's just about to start.

As the Law Institute of Victoria has found, the tide of reform has made it impossible to maintain the traditional monopoly that solicitors in some states once enjoyed over conveyancing.

In Victoria, the process has been remarkably painful -- not just for the Law Institute, but also for consumers of legal services. They might not know it, but every time they left their money on deposit in a solicitor's trust account, the interest was being skimmed off to help pay the bills for the Law Institute's litigation-fest against trailblazing conveyancer Lydia Maric.

That exercise -- which is perfectly in accord with state law -- was entirely counterproductive: it did little for the public standing of the Law Institute and might even have persuaded the state Government to accelerate the pace of reform.

Sooner or later, similar change will come to Queensland. But in that state, the level of pain for the legal profession will be much greater. And the reason is that the profession in Queensland has a much greater task ahead of it in adjusting to a competitive marketplace.

In Victoria, solicitors had long been accustomed to competing with conveyancers. The argument in that state was all about how much competition should be allowed.

But in Queensland, where solicitors "compete" among themselves, the arrival of conveyancers could be expected to send shock waves through the profession. But those fears might be unfounded.

The Victorian experience should give comfort for Queensland solicitors whose practices rely on conveyancing.

In Victoria, the fact that conveyancers now compete on an equal footing is actually an advantage for lawyers. Before the change, conveyancers were simply unregulated. As a result, some of them were skilled professionals and others were shonks who chose not to comply with basic requirements such as professional indemnity insurance.

The new system in Victoria means solicitors and conveyancers both face a similar compliance burden and that should have the effect of evening up their cost of doing business.

All conveyancers with a licence must have PI cover. The arrival of licensed conveyancers in Victoria has also coincided with outrageous increases in government charges on paper-based conveyancing, aimed at driving business to the state's flawed, but cheaper, electronic conveyancing system.

So if anyone was thinking that licensed conveyancers were about to drive down the cost of conveyancing and squeeze the state's lawyers, they should think again. The state Government has already put the squeeze on everyone -- solicitors, conveyancers and all their clients.

But consumers in Victoria still benefit from the new system because the licensing arrangements will quickly drive out the marginal players -- a development that should please both the Law Institute and the Australian Institute of Conveyancing.

But what about Queensland? Conveyancers have been trying to enter that market for decades, but this time they have some powerful allies.

It will probably come to a head in December at the next meeting of the Council of Australian Governments. COAG would be extremely embarrassed if the protectionists in Queensland force it to water down its promised push to eliminate inconsistent licensing of trades.

But unless the federal Government -- the force behind the current reform push -- is able to bring the protectionists into line, its promise of a seamless national economy will be exposed as mere rhetoric.

At the very least, the Queensland Government needs to accept that conveyancers from other states have a legal right to ply their trade anywhere in the Commonwealth.

If the state Government continues to prevent Queensland conveyancers from doing the same, its folly will be clear to the world once conveyancers from other states offer their services to Queenslanders.