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FOR IMMEDIATE RELEASE
Tuesday, 28 June 2016

LSB research reveals extent of unregulated providers market shares

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."

ENDS

 

For further information, please contact the LSB's Communications Manager, Vincent McGovern (020 7271 0068).

Notes for editors:

  1. The findings of this project are presented in the report: Mapping of for profit unregulated legal services providers and an independent research report: Unregulated legal service providers: Understanding supply-side characteristics undertaken by Economic Insight, both of which can be found here.

    A number of infographics have also been prepared to accompany these reports:

    - Unregulated online divorce providers
    - Unregulated wills & estate administration providers, and
    - Unregulated IP providers

  2. The Legal Services Act 2007 (the Act) created the LSB as a new regulator with responsibility for overseeing the regulation of legal services in England and Wales. The new regulatory regime became active on 1 January 2010.

  3. The LSB oversees nine approved regulators, which in turn regulate individual legal practitioners. The approved regulators, designated under Part 1 of Schedule 4 of the 2007 Act, are the Law Society, the General Council of the Bar, the Master of the Faculties, the Chartered Institute of Legal Executives, the Council for Licensed Conveyancers, the Chartered Institute of Patent Attorneys, the Institute of Trade Mark Attorneys, the Association of Costs Lawyers and the Institute of Chartered Accountants in England and Wales.

    In addition, the Institute of Chartered Accountants of Scotland and the Association of Chartered Certified Accountants are listed as approved regulators in relation only to reserved probate activities.

  4. As at 1 April 2016, the legal profession comprised 145,059 solicitors, 15,288 barristers, 6,848 chartered legal executives and 5,697 other individuals operating in other areas of the legal profession such as conveyancing. The sector is valued at £32 billion per annum (2015) which is up 23% in cash terms since 2012. For more information see here.