The emergence of e-conveyancing
e-Conveyancing has become a hot commodity in the Australian market. How are lawyers responding?
Take any person working in any kind of organisation and the one thing they’ll most likely yearn for are better business processes.
As we become increasingly busy, the pressure continues to mount on how to simplify our work and take both the time-consuming and repetitive tasks out of the equation so we’re able to focus our attention on the more important matters at hand.
Technology has been a huge value-add for lawyers in this regard, with AI and the likes streamlining the mundane and freeing up time to add greater value to the client experience.
In a similar vein to AI, e-conveyancing is fast becoming a vital resource in this simplification.
Utilising e-conveyancing tools not only saves tons of paperwork but also allows for the minimisation of manual processes by enabling lawyers, conveyancers and financial institutions to transact together electronically. Further, by each party being able to use the one, online platform, e-conveyancing significantly reduces the risk of error and delays, which as we all know pays off in spades as far as clients are concerned.
In this feature, we’ll explore the ways in which e-conveyancing has rapidly grown to the point where it’s now being deemed essential in Australian businesses - law firms included.
We hear from two heavyweights in the market, who give an indication into the uptake of e-conveyancing tools coming from local legal professionals. They also decipher the common misconceptions held by those who haven’t crossed over into the world of e-conveyancing - and prove why it’s not going away any time soon.
From the outset
For PEXA chief customer officer Lisa Dowie, the emergence of e-conveyancing in the Australian market has been interesting to watch unfold.
“It’s been an incredible journey and truly an all of industry effort in bringing property transactions into the digital age. It was really only a handful of years ago that the very first digital property settlement occurred so to think that more than 50 per cent of the nation’s lodgements are now completed electronically is really humbling,” Ms Dowie explains.
Like any large transformation, Ms Dowie notes, the effort required to earn the trust of an industry is substantial.
She says PEXA invests a lot of time and energy into tailoring its support framework to meet the needs of each individual firm, “including offering a free service where a PEXA specialist will come and sit with you in your firm and help your team complete their first digital property transaction”.
“We’ve also found the collaboration between financial institutions and the legal and conveyancing industry a critical factor in the growth of the market,” Ms Dowie adds.
“Together these parties have agreed on the industry guidelines relating to property transfers, and work collaboratively on understanding pain points as the industry becomes more familiar with, and comfortable in transacting electronically.”
Peter Maloney, chief executive officer of GlobalX, shares a similar passion to e-conveyancing.
He notes that since the Council of Australian Governments (COAG) committed to developing the National Electronic Conveyancing System (NECS) project back in 2008, demand for such solutions in the market has transformed significantly.
“In recent years, there has been exponential growth from a digital perspective, such as the complete mandating of e-conveyancing in Victoria and Western Australia in 2018, with New South Wales set to follow suit in 2019. This growth has been supported by the acceptance of other technologies across the sector, including electronic contracts, electronic signatures and the digitisation of Verification of Identity (VOI) services,” Mr Maloney says.
“VOI solutions such as the IDSecure App store client data in one place, eliminating the need to scan and store paper files and mitigating the risk of losing documentation. There is no question that having a central, encrypted VOI storage solution has been a big win for practitioners.
“New models of software licensing are also emerging in the industry, signalling further change to come. Firms are no longer forced into lengthy and costly lock-in contracts. Instead, they have the option to adopt zero-dollar conveyancing software that saves them money, which can then be spent in other areas of the firm. GlobalX’s zero-dollar conveyancing software Matter Centre is one example of freedom of choice for the industry.
“These developments demonstrate the beauty of the ever-changing conveyancing market – practitioners are increasingly being given more freedom to choose how they conduct their workflow.”
Appetite in the law
PEXA data shows that e-conveyancing being one of the newer “digital disrupters” the take-up coming from the Australian community has been strong.
According to Ms Dowie, there are nearly 8,000 legal and conveyancing firms across the country that have joined the e-conveyancing movement, largely due to the benefits being hard to ignore.
“When we were first created through COAG to create a national e-conveyancing solution, the rough goal was to digitise 70 per cent of all land lodgement nationally – and at the time that seemed quite significant. It wasn’t long before the full potential of e-conveyancing was understood, and various state governments set roadmaps to achieve full digitisation of all instruments which is where we’re now heading. In Victoria, more than 90 per cent of all lodgements are now completed electronically so it’s certainly an achievable goal,” she says.
“We’ve received plenty of feedback from [legal and conveyancing] firms around other products and services they’d like to see PEXA provide in rounding out the e-Conveyancing offering. For example, the ability to order title searches through PEXA Marketplace, allowing title information to feed directly into a PEXA Workspace.
“We’re also seeing the proliferation of email-based phishing scams across all industries, including the property sector so we’re looking to produce a solution to safeguard the exchange of information between lawyers and conveyancers and their clients. Ultimately, whatever we can do to make life easier for our members, and their customers is at the heart of any new solutions we bring to market.”
Mr Maloney concurs that the demand for e-conveyancing is evident.
His company, GlobalX, recently partnered with ALPMA for a Legal Industry Research Report which found that half of practitioners plan to adopt electronic signing technology in the next year, and three in four have seen increased productivity due to new technology.
“These findings demonstrate that the industry is rapidly embracing e-conveyancing and is receptive to introducing new technologies to boost productivity,” Mr Maloney says.
“As a result, legal technology companies have an exciting opportunity to respond to industry demand with innovation, creativity and new ideas that will further streamline the e-conveyancing process”
Like any technology tool there are bound to be those who are either confused about or flat-out uninterested in the latest and greatest gadget to hit the market.
We saw it with the introduction of AI, with some believing the robots would take over our jobs, and we’re now seeing it with e-conveyancing.
What are some common misconceptions about e-conveyancing? How do you mitigate these misconceptions?
“I think one of the things we hear most frequently is that e-conveyancing is less safe than traditional paper settlements which is quite different from reality. We know for example that between 2013 and 2018, the NSW Registrar General paid out more than $2 million for errors in paper transactions and more than $7 million for paper fraud. In the same period, not one single payment was made on electronic lodgements,” Ms Dowie says.
“While we do talk to the benefits of digital innovation, this is a $7.2 trillion asset class and there’s zero tolerance for risk. Changing the means of transacting property is all well and good, but you don’t undermine the title security of property. You can’t put at risk any part of the value chain in carrying out the digitised process.
“We’ve had to be very careful and the Registrars themselves have been very measured in how they’ve deployed their legal frameworks and in how they’ve worked with us.
“To that end, security is first and foremost for PEXA. We’re constantly evolving and advancing our own security posture to protect the network and indeed we’re looking at ways we can help better protect practitioners from security vulnerabilities that sit outside the e-Conveyancing network too.”
Mr Maloney says the main misconception practitioners have about e-conveyancing is thinking they need to be registered for electronic conveyancing to partake.
“This is false - practitioners do have other options if they don’t want to spend time and resources learning the ins and outs of the ELNO platform. For example, one option is to outsource – agencies such as GlobalX Legal can conduct electronic settlements on a practitioner’s behalf,” Mr Maloney says.
“Outsourcing is common in many industries, and the outsourcing of electronic settlement services has spiked since the introduction of mandating in some states.
Another misconception is that practitioners think electronic signing is not legally recognised, he notes.
“However, digital and electronic signatures have been recognised by law in Australia since 1999, when the Electronic Transactions Act was introduced. This means that parties can legally use any form of digital/electronic signature tool such as GlobalX’s SignMe to create valid real estate documents such as lease agreements, purchase and sales contracts,” Mr Maloney says.
“Of course, it is important for practitioners to conduct their due-diligence and check their respective jurisdiction’s guidelines before adopting electronic signing in their firm.”
The third biggest misconception, according to Mr Maloney, relates to VOI procedures, noting that some practitioners and their clients question the necessity of stringent VOI procedures.
“However, the reality is that as technology has gotten smarter, hackers and cyber criminals have followed suit,” he says.
“There have been several cases of property fraud in recent years, and it’s always better to be overly cautious with identity verification, rather than take a risk.
“These fraud cases have highlighted the need for better verification of identity methods, which is another area that GlobalX has closely focused on to meet industry demand.”
While the overarching benefits of e-conveyancing are obvious there are some practice areas that’ll see stronger results from its utilisation than others.
Ms Dowie and Mr Maloney agree that the practice area which is the most obvious benefactor would be those lawyers in the property space.
“Above all, property lawyers should be looking at settling their matters electronically as much as possible,” Mr Maloney says.
“The efficiencies created by settling electronically mean that practitioners are able to take on a higher volume of settlements and boost the revenue of their firm.”
Other practice areas to see strong results from e-conveyancing tools are those in family law, and, wills and estates, according to Ms Dowie. Further, conveyancers, financial institutions, land registries and state revenue offices are the key utilisers of such services, she says.
“KPMG produced a report on behalf of the NSW Government entitled ‘Analysis of the benefits of electronic conveyancing to conveyancers and lawyers in NSW’,” Ms Dowie adds.
“In that report, it is estimated that the use of an electronic platform such as PEXA will help realise time savings post settlement of at least 60 per cent compared with a standard conveyancing process. It also states the ‘electronic environment enhances the productivity of lawyers and conveyancers, making their businesses more viable in an intensively competitive market which has driven down fees’.
“In financial terms, the electronic platform also has both cost and time savings.”
Further, Mr Maloney says the uptake of e-conveyancing solutions can bolster a law firm’s core operations.
“Thanks to technology, we live in the age of convenience. If we can order a meal, a car ride, groceries, clothes and more at the click of a button, why should buying or selling property be any different?” he questions.
“Property buyers and vendors have indicated that they are far more satisfied with a streamlined settlement process that avoids the traditional delays associated with paper documents being sent back and forth.
“If you have a solid e-conveyancing strategy implemented in your firm, and know how to transact efficiently, clients will be more likely to use your firm again in their next transaction. As well as this, there are the obvious benefits of increased revenue and increased efficiencies for practitioners.”
Onwards and upwards
As Ms Dowie says, the 21st century consumer expects digitisation, making the case for e-conveyancing too tough to ignore.
“From the way we shop and consume media through to how we trade shares and bank, there are very few industries left that still thrive in paper,” she says.
“Firms that offer the benefits of digitisation through PEXA are offering their consumers faster access to the proceeds of sale or interest recognised on title at settlement, not weeks later. These are tangible benefits and will give those firms that embrace e-Conveyancing a competitive advantage over others.
“There is also a whole raft of efficiency dividends for practitioners themselves which means more time to focus on business development and providing value-added advice and support to your client.”
For Mr Maloney, failing to implement e-conveyancing solutions and tools is detrimental to both a firm’s operational efficiency and longevity.
“Consumers are used to a fast-paced digital world and have come to expect the same efficiency when buying and selling property. Settling electronically is a much faster, more seamless process for the practitioner and client alike,” he concludes.