Exclusive: Slow property market is affecting lawyers as transactions drop
The sluggish property market is having a knock-on effect on property lawyers as transactions have dropped to figures seen during the COVID lockdown.
Exclusive data shared with City A.M. shows that property lawyers are now handling 25 per cent fewer cases on average, following a 21 per cent fall in monthly property transactions year-on-year.
According to the Conveyancing Market Tracker (CMT) from property data company Search Acumen, the average property law firm handled 62 cases in Q3 2023, a 25 per cent drop year-on-year. The data also showed a 41 per cent decrease from its Q1 2022 peak where firms handled an average of 94 cases per quarter post-pandemic.
The data highlighted that September 2023 recorded the fewest property market transactions in nearly three years, in line with figures seen during lockdown. However, the 62 cases per quarter are in line with pre-pandemic figures (quarterly average from 2019).
Search Acumen’s analysis showed the total number of active law firms has suffered from the market slowdown, dropping below 3,900 for the first time outside of a pandemic in August 2023 and remaining below that level ever since.
This comes after news in December when property associates at Fladgate were given the option to work a four-day week for four days’ pay as the firm is reported to be behind in its budget.
Despite this, the top 500 law firms are on track for a 60 per cent market share for 2023, which would be a record high, up from 51 per cent in 2011, now handling three in five transactions.
Similarly, the top 100 has edged their market share up to around 77 per cent, which is another record high on an annual basis, up from 65 per cent in 2011.
Commenting on the data, Andy Sommerville, director at Search Acumen, said: “As workloads slow for property lawyers, a number of firms are making moves to consolidate in a sign of the changing demands of the real estate market. During periods of significant mergers and acquisitions, it is therefore likely that some of the larger firms may be growing due to this, and why the top 500 firms are dominating market share.”
“We know a slowdown in commercial and residential property instructions is having a particular effect on caseload volumes, where the fight to win an instruction from competitors has been sharply brought into focus,” he added.