The ESPC stood unchallenged for over forty years, until financial problems and strategic atrophy forced its own membership into revolt. With the GSPC hovering, where next for Edinburgh’s conveyancing solicitors?

So what went wrong? Lancing the boil that has sprouted over the face of the ESPC and diagnosing the problem that led to near financial meltdown and a membership insurrection is likely to be the first step in rectifying the problem and getting Edinburgh’s cherished marketing medium back on an even keel.

With the GSPC circling initially with interest in partnering up, well placed sources since suggest that the west coast rival has cooled off the idea of a marriage, and if anything may now only be interested in cherrypicking disenchanted ex-member firms into the GSPC fold, extending their reach to encircle the wounded behemoth and take best advantage while it is down.

Lack of responsiveness with the membership has been the most common problem for the root and branch members. Well chronicled financial difficulties led to the departure of Chief Exec Ron Smith during the summer. For a moment or two, it looked like the wobble might even teeter into a collapse, but the appointment of replacement Malcolm Cannon seems to have rallied the core members behind the cherished institution, which as a model of collective enterprise seems unbeatable on paper.

Phil Valente of Edinburgh conveyancers Valente McCombie & Hunter says that in the present environment there is room for the two property centres to work together, whether as a combined centre for the central belt or sharing the platform for the provision of services, an interface which he observes has been historically shied away from.

“It would be more cost efficient than to have two separate boards and two separate memberships doing the same thing. Over a number of years there was a strong rivalry between Edinburgh and Glasgow, and I think it worked both ways. Ideas and initiatives that Glasgow were following wouldn’t necessarily be taken up by Edinburgh,” he says.

“It is a slightly different marketplace in Glasgow, but that probably helps considerably. When you are having to fight for market share, you develop more initiatives to deal with the market in an effective fashion. The ESPC has had a dominant market share for a long time. One of the weaknesses of a dominant market share is that you don’t innovate, don’t change and become a dinosaur.”
The emergence into the long closed Edinburgh property market of high end specialists Rettie & Co and Savills has proven that ground can be gained without the imprimatur of solicitor membership as per the property centre model.

“For the first time there is a sense of competition. The financial crisis has been a wake up call. A lot of the smaller members who make up a very strong share of the number of registrations collectively are now beginning to realise that the financial crisis is going to make the ESPC change,” Valente says.

“The board are coming up very hard to come up with solutions to the financial challenges that we face now. They are also looking at the direction of the ESPC and what services they’ll keep and those that need to be introduced. They have started consulting a lot more with the members over the last 18 months than before. What comes out of this in the next year or so will be a very different ESPC from the one that went into it.”

Valente agrees that GSPC expansion into East Lothian would probably be a leap too far, but agrees that any area that feels disenfranchised from the ESPC would be vulnerable to penetration.

“In West Lothian, there are big firms out there with former directors who think more or less along the same lines,” he adds.
“The ESPC are well aware that the members want Glasgow looked at as an option for platform sharing and for creating economies. The GSPC registration fee is lower than in Edinburgh. There could be a lot of economies sharing their printing operation. When we find ourselves in the ESPC with financial challenges at the moment, as all solicitors in residential property are, we’d be in a stronger position if we had the economies of scale. I think there is probably a feeling within the Edinburgh membership that we should be getting back to focusing on the core areas and look for ways to provide that service as efficiently as possible.

“As for teaming up with other property centres, that is something that has always been talked about. There would be benefits financially, and I am sure benefits strategically as well. There are far more professional similarities between Glasgow and Edinburgh lawyers than there are differences.”

David Henderson of Campbell Smith agrees that the ESPC has failed to keep solicitors in smaller to medium sized firms appraised of their work.

“Firms like my own have not been consulted a great deal over the last two or three years. In the past, I was always more aware of what the centre was doing and what was happening. I’m not so aware of what has been going on in the last two or three years, until we were all told there is a significant financial problem,” he says.

“I don’t think they have analysed the needs of what the centre should be doing. Part of me feels that they should get back to the basics of trying to market properties, in an innovative way if they can. I think they have gone off on tangents at time. It strikes me they have been spending a lot of money on IT. We as solicitors didn’t want or welcome the introduction of the homebuyers report, but the ESPC, more or less from the word go, geared themselves up to provide a package. Doing so must have taken a lot of time, effort and cost.”

Despite the recent perceived flaws in the running of the ESPC, Henderson is determined that the institution survive and thrive from the ashes of its recent turmoil.

“It is in crisis now. We as solicitors have to band together. The worst thing for the legal profession in Edinburgh would be for the ESPC to lose its position and fragment,” he says.

“Some of the bigger property firms could create combines and have a marketing medium of their own. If it doesn’t survive, it is going to be potentially disastrous for a lot of legal firms where property selling is still a significant part of their income. The alternative wouldn’t be good. The vast majority would suffer if it were to fold or dramatically change the way it goes about its business. In Edinburgh, particularly in the higher price ranges, there are two or three non solicitor agents who have come into the market, and are doing very well. They have taken quite a significant chunk of the market. If you allow them to develop and expand they are going to get even more of a foothold.”

John Lints of the Lints partnership and the Edinburgh and Lothians Property Group says solicitors in Edinburgh and the Lothians have now indicated their support and desire that the ESPC continues to trade as the ESPC, but acknowledges that lessons need to be learned.

“The starting point is a recognition that there has been an issue with the ESPC’s previous management and leadership, both financially and from a management point of view. ESPC has got itself into difficulties through bad luck in the property market, and also an element of mismanagement. To a certain extent there has been a lack of communication in the past between ESPC and GSPC, particularly at management level. In Edinburgh it has come to a turning point where it has been recognised that there has to be changes,” he says.

“The financial situation is being addressed, and the financial recent history has been a lot better. And there is bank support for a continued ESPC. There has previously been a lack of control and accountability by the executive directors towards the members, and that is something most ESPC members are very conscious of and will ensure doesn’t happen again. Over the last few years we have all had very healthy businesses, and the ESPC management has been allowed to mismanage the ESPC without adequate controls from or reporting to the members. We are at a turning point now.”

The task ahead for the ESPC may be to court its west coast neighbour and test if its former allure remains attractive before Glasgow loses that lovin’ feeling.

“We will be coming into hopefully a new era of cooperation between ESPC and GSPC and any other property centres that wish to join in. It has now come to the point where it is recognised in Edinburgh that this is the route we should go down. Once we get into 2010 there should and there will be more of a spirit of cooperation.”

Time will tell whether the GSPC members are still in the mood for that honeymoon.