Getting to grips with HIPs

Berwins LLP (www.berwin.co.uk) is a 25 fee earner practice, 7 of whom are fully engaged in residential property in Harrogate and regionally. We have busy and successful private client, litigation, commercial and commercial property departments but residential property remains one of our biggest departments in terms of fee income, drawing new business into the practice. With this sort of profile we would have been very short-sighted indeed not to have seen the Home Information Pack as a serious threat to our market.

A long and winding road

The road to 1 August 2007 was a very long and winding one: we had been contemplating a Seller’s Pack of some sort since 2000 after all. The uncertainty and delays in my view led to a lot of practitioners being unprepared. Before the government announcement on 22 November that HIPS would be mandatory for all properties from 14 December 2007, I was still talking to a local solicitor who thought the whole scheme was going to be scrapped (we supply his HIPs by the way).

We knew there was a possibility that the HIP would be dead in the water but knew that we had to be prepared and so ”¦ we talked to people. We talked to other solicitors, we talked to HIP providers, we talked to estate agents, we talked to a guy who had a product that I still didn’t understand after three long meetings, we talked to the Law Society, we talked to our clients and we even talked to the lady in the sandwich shop across the road.

After all that talking we decided we needed a HIP solution that reflected our own brand; our modest little strap line is “no ordinary lawyers” which means that we provide a proactive client-focussed service combining a quality product with the best of technology. We have found that our clients are willing to pay for a quality service from a human being, not just a case handler but that they also want to check their case online with a glass of wine on a Sunday night, email their queries, and appreciate an SMS message confirming they can pick their keys up on completion day.

We looked at the Law Society HIP which is run by MDA Advantage. It was OK but we weren’t blown away. And we wanted to be blown away because, having saddled ourselves with the soubriquet “no ordinary lawyers”, we realised that we should be doing something extraordinary. We talked to a very impressive bunch of lawyers turned techies from the Midlands who had developed their own HIP, assembled online and with plenty of bells and whistles, and we went a long way towards adopting their product, but two things didn’t feel right. Firstly, their product had been developed for online ordering by estate agents. We found the estate agents in our area had no interest whatsoever in involving themselves in the process of creating the Home Information Pack, however limited that involvement was; they wanted to sell houses and drive their Porsches and they wanted someone trustworthy to take the problem of HIPs away.

Secondly, the Government backtracked on yet another element of the HIP which meant that the mandatory elements now created so slender a bunch of documents that I heard Dennis Cameron from the Law Society referring to the HIP as the “Home Information Pamphlet”.

HIP HIP Hooray!

And so somewhat tentatively we considered creating our own HIP. We knew we had the capability to do this and we had a few decisions to make which at the time seemed difficult but I now realise were blindingly obvious. Firstly, as regards the energy performance certificate, we offered a place on our panel of domestic energy assessors to anyone who could meet our criteria as regards service delivery, qualification, certification and so on. Serendipitously one applicant stood out from the crowd and in fact was the first DEA to be qualified in the region. This organization has offered us such a great service, effectively almost becoming a sales force for us, that I will need a lot of persuasion to add further to our panel, although as more DEA’s qualify it may be that our colleagues in the estate agencies will be looking for some reciprocity of referrals.

Secondly, as regards searches, how we anguished over the personal search or official search debate. As a department, our policy is not to accept personal searches, however, and so really we knew the way to go on this. Harrogate Council made it easy for us by offering a desktop to desktop search facility (not just for us, I should add) and so this fell into place with our product.

Having official searches made the product more expensive than it could have been had we used personal searches but this “felt” the right decision for us, looking at our brand and our market. Surprisingly this is something estate agents did have a view on; they quickly latched on to the fact that a good HIP with official searches is going to speed the course of a transaction once agreed, and so we have stressed this element of our product in talks with estate agents.

Another important factor in this mix was assembly and delivery of the HIP. We had seen some really slick products in our research phase and we knew that the delivery of the HIP was going to be key in securing a share of this market. In 2006 we had invested heavily in a firm-wide case management system, Liberate from Linetime (www.linetime.co.uk). One of our conveyancing team exhibited a flair for computer programming and once we had assembled a couple of HIPs somewhat laboriously and prepared some templates and standard documents she was able to create us a bespoke HIP case management system which automates document assembly, launches relevant websites and autopopulates some fields for items that are ordered online, and has a diary function

Then our gift from heaven was Robert. Robert came along for an interview for a post as my assistant straight after completing the LPC. The sheer nonsense on his CV about emulating the guitar style of Mark Knopfler secured him an interview and then the complete enthusiasm he showed at his interview secured him a position. I gave him the Home Information Pack project for himself and he has fine-tuned and developed the product, shown a real aptitude for sales, turned many a HIP enquiry into a good set of conveyancing fees (and from one well-handled call we got a HIP, a sale, a purchase, a Will and some commercial litigation too) and delivered the sort of service that we aspire to.

We have a forward-thinking IT strategy and so it was not necessary to invest in any new equipment just for this project but we have developed a separate website (hips.berwin.co.uk) so that clients, their estate agents, potential buyers and then actual buyers’ solicitors will be able to view or print the relevant Home Information Pack through passworded access to the site. This is an alternative to our current practice of emailing pdf files and sending out printed packs.

Where we are now

The Home Information Pack has been good for us so far. It has been a profitable source of work and it has strengthened our relationship with independent local estate agents. It has been a delight to keep the work in this area, working with local agents, a local DEA and our local authority in this day of call-centre commoditisation. While our product is not bargain basement cheap, it is still cost effective because there are no middlemen skimming management charges off the top.

Whether we will make many HIPS for 1- and 2-bedroom houses is another question, however; this is the more price-sensitive end of the market and we need payment up front to make our product work. We have searched for a deferred payment solution without success as we are just not putting through enough numbers to meet the criteria of the providers of this type of consumer credit. However, this was never really our market and while I will continue to look for a deferred payment arrangement to benefit our clients we can’t be all things to all people.

I would strongly urge other solicitors to create their own HIPs; whether you put resources into it and make it a profitable endeavor or see it as a loss leader, our experience is that it will bring benefits to your clients and your practice.

Carolynn Peace is a partner in Berwins LLP and head of residential property. Her interests apart from residential property are travel (sometimes pillion on a Harley Davidson) and theatre, sitting on the Board of Trustees of Harrogate Theatre.

Email CarolynnPeace@Berwin.co.uk.