Too many left making blind choices on legal services
Jane Malcolm, Solicitors Regulation Authority Executive Director, External Affairs
We know that access to legal services is a problem. Nine out of ten members of the public and small businesses do not use regulated legal professionals and see both finding the right service and affordability as difficult. As the regulator of 86 percent of the legal market in England and Wales, we want to address that problem. And part of the answer has to be better information.
When it comes to buying important services, we all want to make sure our decisions are based on the best available information. And these days, most of us expect to be able to access useful, credible information at the touch of a button.
But this is not the case when it comes to legal services, and too often, we are left making blind choices. People need to be able to find this information so they can compare providers and make informed choices. Research shows that only a minority of consumers - around a quarter - are shopping around when choosing a legal service supplier. It is unsurprising when the information out there is so limited.
There are some green shoots. We have seen comparisons sites beginning to enter the market. But most consumers still rely heavily on recommendations from friends and family or their own previous experience when purchasing legal services.
That dampens competition, and hampers the drive towards lower prices and better services. Both the Competition and Markets Authority (CMA) and the Legal Services Consumers Panel have echoed our concerns, for example in the recent CMA report on the legal market.
Problem of access to legal services
This lack of information might also be stopping individuals and small businesses from having their legal needs met. Only one in ten people use a solicitor when they have a legal problem. And legal problems are estimated to cause small businesses almost £10 billion of losses a year.
We need a vibrant legal market, a market that gives business what it needs. Small businesses recognise the challenges, with 86 percent saying legal services are essential for running their businesses, yet only 14 percent say solicitors provide a good value way to resolve their problems.
What regulators can do to help
We know that the public look to regulators for credible, authoritative, objective information.
We already provide certain information on solicitors and law firms, but we think we can go further. So we are exploring creating a public register, publishing information such as enforcement action, practice conditions, complaints and claims data – all things that anyone would want to know when choosing a solicitor.
We also want the information to be available to all data re-publishers, as the market is best placed to develop comparison tools that deliver real choice to consumers.
Is this greater transparency a risk?
We are not talking about something revolutionary. We would be bringing legal services in line with other sectors, such as financial services and energy, where regulators are already making sure consumer-focused information, such as complaints data, is available.
However, we do recognise we need to carefully consider what we publish. We will not benefit consumers if they find information confusing or hard to access. We have also made good progress on getting rid of unnecessary burdens on firms; we do not want to ask firms to do more, unless there are clear benefits.
Better information will benefit everyone
Legal services can help us with some of the most important decisions in our life – from buying a house to passing on our inheritance. They can help a small business succeed, from taking on their first employee to completing their first lease, export or online sale.
If we get this right, we will all benefit through the creation of a more competitive market. One where more forward-thinking firms thrive. One where businesses can access the services they need to grow. And one where consumers can make better, rather than blind, choices.
We have already asked the profession and others for views on our initial ideas, and we will be consulting on more formal ideas in due course. We would welcome your comments when we do.