Downsizing the Good

by Robert Franco Downsizing The Good

When an industry comes off a high, like the one we have experienced the past decade in the title industry, it is only natural to experience some downsizing. What bothers is me "how" some companies decide to downsize.

In the frenzy to hire more and more people, many companies neglected training, seemingly all together. I remember when I started, my clients were all very knowledgeable. Sure, you got the occasional new person on the phone that wasn't quite up to speed yet, but they were being trained and we knew that they would get there.

As time went on, it became apparent that training was something that just stopped; some caught on, most just didn't. We found ourselves trying very hard to explain simple concepts to clients' employees who didn't think it mattered.

One of my clients has downsized and one of the good guys has been let go. He was one of the few remaining who understood title, he understood the complexities of a thorough search and he appreciated our work. I was quite surprised.

I am afraid that in this slowing market, the title industry is going to downsize the good right out of the business. Decisions on who must go are probably being made based on factors such as cost and ideology, rather than knowledge and expertise. Those who have been around a while and have developed good title skills are probably making more money than the new hires who haven't realized "why" we do this job. That also means that they understand the importance of a thorough title search, marketable title, and curing defects. Those qualities don't fit in well with the new "master plan" of thin-title plants, outsourcing to India, current owner searches, indemnification, and insuring over known-defects.

What will this mean for the future of the title industry? When we experience the next boom, there won't be any "real" title people left to handle it. There won't be anyone there to train the new people of next round of "hire everyone." Of course next time, I'm guessing those higher-ups who make the decisions are banking on complete automation... instant title commitments that won't require anyone who really understands title. Fortunately for them, there won't be anyone around who cares enough when the instant products fail to do anything about it. The machine will be in high-gear producing fundamentally flawed title policies and when a claims arise there will be "rubber stamp" department to issue an indemnity to get the next deal closed.
Fortunately for me, this will create a demand for good title attorneys to sue title companies on behalf of homeowners who hold imperfect title. I'll be out of law school by then... and I'll have a lot of student loans to repay.

Of course, its not too late. Someone may understand that we need to keep the best and downsize the rest. The industry should take this time, while things are slow, to train and educate those who have slipped through the cracks. They need to start thinking about the next generation of title professionals who will be dealing with the problems that the refi-boom has created. There are a lot of title problems out there from short-searches, thin-title plants, and inexperienced abstractors, just waiting to be discovered. They may lie dormant until the next wave of business hits the industry, but they will surface. If we downsize the good out of the title industry, who will take care of them?

And, one last thought: if you are one of the "good guys" that has been around a while, and you know "why" what we do is so important to the industry, how safe if your job? What are your company's priorities for the future and how are they planning to downsize?

Robert A. FrancoSOURCE OF TITLErfranco@sourceoftitle.com