Unregulated providers make up approximately 5 per cent of those paid to give legal advice. The slice of the unregulated sector with the highest proportion of for profit unregulated provision was family, where such providers represent just over 10 per cent of individuals getting a divorce.

Cheaper and more innovative

This new research suggests consumers are using unregulated providers for a number of reasons, including lower prices compared to a regulated provider, higher levels of transparency in pricing, and higher levels of innovation and service differentiation.

Comparable satisfaction

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.

Not so large or problematic

LSB chairman Sir Michael Pitt commented: ‘This new research suggests that the unregulated sector is neither as big nor as problematic as some have suggested. … 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.’