Lidarr should be able to do that, in your Profile settings put 320 as a higher priority than flac in the upgrade until section, that'll replace flac with mp3 as it finds it
If you're having trouble streaming flac with one person I can't imagine having multiple people streaming mp3 is going to be any better though, if it's bandwidth you'll run into the same thing otherwise if it's hardware, better to find out why it's not seamless and fix it.