We recently sat down with Hana Lee, Solicitor at Forty Four Degrees Lawyers & Consultants, as she shares her thoughts on the importance of eConveyancing ahead of her presentation at the 15th Annual Conveyancing Conference, where she will delve further into this topic.
What are some of the key trends and developments in property law having an impact right now?
Since 1 October 2018, all Victorian conveyancing transactions must be conducted electronically. Property Exchange Australia (PEXA), Australia’s first Electronic Lodgement Network (ELNO) is currently the only fully operational eConveyancing platform. However, a second ELNO called Sympli completed its very first financial property settlement in December 2019. Considering calls for increased competition in the eConveyancing space, we can expect to see more ELNOs developing in the years to come.
The biggest development at the intersection of technology and property law is ‘interoperability’. Put very simply, interoperability means the ability of different players in the eConveyancing space to ‘talk’ easily with each other. For example, if there are multiple ELNOs it may not be guaranteed that a purchaser and vendor’s conveyancer are subscribed to the same ELNO. How to guarantee interoperability, whether it should be a requirement, and what kind of interoperability model will be adopted in the future are interesting spaces to watch in the near term future.
We are also seeing an increase in digitisation of eConveyancing related or adjacent services. For example, some practitioners are electing to complete verification of identity through digital means as opposed to in-person meetings. Contracts of sale can be prepared, exchanged and signed digitally, obviating the need for any hard copies. Secure document and information exchange platforms are rapidly developing, offering a solution to the increased risks posed by the switch to eConveyancing.
The trends and developments in property are not unique to the legal space. The rise of ‘Proptech’, or property technology, is permeating through every aspect of real estate. Cubbi.com.au allows direct landlord to tenant leasing without a leasing agent. Listingloop.com.au alerts potential purchasers of new purchasing opportunities, sometimes even before a property is listed on the market. Virtual reality inspections allow time-poor or geographically isolated clients to see the inside of a listed property. The real estate industry is undergoing a massive disruption, and the landscape of the industry will shift considerably in the next 3-5 years.
What’s a common mistake you see people make with eConveyancing?
The biggest mistake people make with eConveyancing is adopting a mistaken perspective. From there plenty of mistaken behaviours follow. Many practitioners, particularly those with many years of experience in paper-based conveyancing, have not embraced the potential that eConveyancing offers. Some practitioners have, in fact, walked away from the conveyancing portion of their business completely rather than adopt to eConveyancing.
While technology can be overwhelming, frustrating and difficult to learn it is important to remember that the development of eConveyancing is still relatively new. No technology is perfect from the very beginning. If practitioners can stick with the systems past the initial growing pains, I believe they will, sooner than expected, grow to embrace the efficiencies of an eConveyancing system. The technology is still in its infancy, but there is exciting potential in how eConveyancing platforms can make the conveyancing process easier, simpler and more transparent for us and for our clients.
Is there a tip you can offer practitioners to reduce risk through eConveyancing?
With the highly publicised ‘hacking’ incidents on PEXA in 2018, it is a somewhat commonly held belief that eConveyancing is risky, insecure and less capable of protecting client sensitive information than the traditional, paper-based conveyancing process. On the contrary, eConveyancing has, and will, drastically reduce the number of fraudulent transactions making it past settlement.
New features such as SecureExchange by Infotrack and PEXA Key offer secure alternatives to e-mail for exchanging critical information like bank account details. But most practitioners can start to reduce their risk by looking at much simpler aspects of their practice.
The eConveyancing platform is not the biggest source of risk. Ineffective cybersecurity practices and human error are the two biggest risk factors in any conveyancing or legal practice. That conveyancing transactions, from end-to-end, are increasingly moving toward a digital space requires that firms more actively ‘turn their mind’ to the kinds of cybersecurity risk mitigation policies they have in place.
There are plenty of free resources available for practitioners who are looking to reduce risk. For example, the LCA Cyber Precedent is a collection of resources by the Law Council of Australia to assist practitioners nationwide. The LPLC Cyber Security Guide for Lawyers provides a plain English explanation of the steps you can take to protect your firm and conveyancing practice against common cyber threats. It is also a good idea to regularly check the PEXA security updates page for any identified threats in eConveyancing and the Australian Cyber Security Centre’s page for the latest widespread threats.
Why is it important that practitioners embrace technology in their property and conveyancing practices?
We have entered a new paradigm of conveyancing. Practitioners must be ready to respond and adapt their business models accordingly.
Using technology can increase efficiencies and profit margins. Rote tasks can be automated, allowing time for practitioners to focus on delivering higher quality, service-focussed outcomes for clients. Early adopters of technology-based solutions will likely gain a competitive advantage in the market place, as technology savvy law firms can offer more transparent, seamless transactions for their clients.
But if the positive potential of incorporating technology into your practice is unconvincing, embracing technology is important as it may soon become a requirement for legal practitioners.
In some overseas jurisdictions, the definition of competency for a practitioner now includes a level of technology fluency. While Australia has not yet gone so far, the increased use of technology is a permanent fixture in the legal landscape. Practitioners must adapt and adopt to the new reality and it is likely that the first to do so now will become the marketplace leaders of the future.
Hana Lee received her JD from the University of Western Australia and has a background in international development and policy research. She practices in commercial, property, tech and startup law. With 8 years’ experience garnering social media and online growth for small businesses and non-profits, Hana brings to her practice of law an in-depth knowledge of the constraints and opportunities faced by small businesses, particularly in the digital space. Connect with Hana via LinkedIn