Report reveals concern over ‘cowboys’ providing unregulated legal services

A new report has revealed both regulated and unregulated legal services providers are concerned over the “cowboys” providing lower quality legal services with lower standards and no regulation.

The report, commissioned by the Solicitors Regulation Authority (SRA) and undertaken by Frontier Economics, The DataCity, and BMG Research, set out to better understand the unregulated legal services market, which currently makes up roughly 6-8% of the total legal market turnover with at least 3,800 providers currently operating.

Most unregulated services are provided to individuals and small businesses, the SRA said, adding that a quarter of the unregulated providers are concentrated in will and estate administration work followed by family (12%) and employment (11%) work.

It’s said providers of both regulated and unregulated services acknowledged that there were certain “cowboys” or “rogue traders” operating at the time who took advantage of consumers, delivered bad advice, and created a bad reputation for the market as a whole.

It was also suggested that providers agreed some regulation or accountability and requirements should be imposed to minimise the bad operators, although the way forward is unclear.

“Regulating won’t solve everything because the cowboys will find another saloon to ride into,” one respondent said. “There are always going to be bad regulated solicitors,” another added.

Most providers agreed that it would be beneficial to have more aspects of regulation in some areas, especially those providing wills and trusts services. This would likely include training, qualifications, and accountability, although concerns over consistency, increased admin, and costs were common amongst respondents.

What’s more, around half of unregulated providers thought that people do not understand the difference between regulated and unregulated services. 14% said they would become regulated if they had to disclose their regulatory status.

“Price, quality, levels of protection, and experience can differ greatly from one supplier to the next, whether regulated or unregulated, and what is the right mix for one consumer is not necessarily the right option for the next,” said Paul Philip, SRA Chief Executive, adding:

“Past research shows that regulated providers are more affordable than many people think, so the real distinction between regulated and unregulated providers is the consumer protection available. Our clickable logo, which the firms we regulate must display, is designed to make that clear.

Helping people to understand what their money is buying – and not buying – when they engage a legal services provider will help them make good decisions about the service that is right for them. That is all the more important as the non-regulated market develops.”

The research involved a web-reading exercise to gather information about the possible number and types of providers of unreserved legal advice, a survey of 510 small business users of legal services, a survey of 162 providers of unreserved activities that are not regulated by the SRA, and engagement with a panel of industry experts. Read the full report.