The Legal Services Board (LSB) publishes today the findings of its unregulated providers research project which significantly advances understanding of unregulated provision of legal services.
The LSB’s 2016 individual legal needs survey indicated that the size of the unregulated sector is smaller than originally thought. This new research suggests consumers are using unregulated providers for a number of reasons, including:
– lower prices compared to regulated provider
– higher levels of transparency in pricing, and
– higher levels of innovation and service differentiation
Unregulated providers represented approximately 5% of providers from whom paid advice and assistance is sought to address a legal problem. The slice of the unregulated sector with the highest proportion of for profit unregulated provision was family, where unregulated providers represent just over 10% of individuals getting a divorce.
The research also suggests that satisfaction with customer service is broadly comparable across regulated and unregulated providers. It recognises the risks that unregulated providers could present to consumers, which include misleading advertising claims and consumers not understanding fully that these services are unregulated.
Legal Services Board’s Chairman Sir Michael Pitt said:
“This is an important piece of work. We hear too much anecdote about the unregulated parts of the legal sector and alleged problems associated with such providers.
This new research suggests that the unregulated sector is neither as big nor as problematic as some have suggested. The research provides a balanced view of this part of the legal services market and allows us a better understanding as to why consumers might use it. It is however, very important that consumers make informed decisions to use unregulated providers. They will receive less protection than if using a regulated provider and it is of concern if they are accepting this without realising the lack of consumer protection.
Our research found that although most consumers check whether their provider is regulated a significant minority do not, many simply assuming they would be. It is important that consumers weigh up the potential benefits and risks.”