Buying legal advice is often a lottery for consumers, says Ombudsman
About 130,000 legal services providers in England and Wales are believed to be outside of the traditional regulatory regime - and with the alternative legal market growing all the time, this figure could be set to rise significantly in the near future.
Of course, this has a number of advantages as it ensures the market is more diverse, and an influx of new arrivals can make established companies up their game in order to fend off encroaching competition.
However, the Legal Ombudsman has highlighted one important issue that could potentially turn into a big problem. How can consumers seek redress with alternative legal services providers when things go wrong if they are outside the jurisdiction of industry regulators?
The organisation warned recently that buying legal advice is "to some extent a lottery for consumers", as they are "understandably confused about whether the people providing it are up to standard".
But Elizabeth France, chair of the board at the Legal Ombudsman, believes this also means that if they are unhappy with the service they have received, they do not always know where they can turn. As a result, they might be missing out on the chance to "remedy the situation" even when something positive can be done.
The Law Society is therefore calling for a debate on how to create a system that works for both consumers and businesses. This, it said, needs to be transparent, effective, accessible and efficient for everyone, and not "constrained by traditional views of the boundaries to legal services".
Simplifying the process for all parties could be achieved if professional services are brought together under a single regulatory scheme, the group suggested.
"We are seeing more overlaps with other areas and professions and we need to think about how to make the system work better," Ms France commented.
The Legal Ombudsman noted that legal advice is increasingly being provided by professionals in a diverse range of fields, such as probate, architecture and accountancy. So it is clear that while the lines between different professional services are becoming more and more blurred, the regulatory regime is not changing to reflect the new operating environment.
According to the Legal Ombudsman, the existing state of affairs means thousands of people might have to "just accept poor service if they can't afford to pursue costly court action".
People who are obtaining advice on employment and immigration-related issues were said to be particularly vulnerable, along with those who are buying wills or seeking assistance on building plans and managing debts.
The Legal Ombudsman believes that more than four in ten unhappy customers are failing to raise their complaints, while many who have done so abandoned their case before it was concluded. The organisation attributed this partly to a lack of confidence among consumers that their grievances will be dealt with fairly.
One possible reason why some people are not satisfied with the service they receive might be that they are not always working with the organisation that is best suited to handle their case.
A recent survey by the Legal Services Board revealed that just 22 per cent of clients chose to research the market in order to find the most suitable law firm during 2012. As a result, the body believes people need more help finding the best organisations so they can make more informed decisions - which is something lawyers might be especially well-placed to assist with.
The fact people aren't actively seeking out an organisation that has particular expertise in certain areas could be a root cause behind many of the complaints the Legal Ombudsman has received in the last few years.
If there is a disconnect between a legal services provider actually does and what the client expects of them, then it seems highly likely that problems will arise at some point. And if the regulatory system does not provide protection to customers who work with alternative legal providers, public confidence in the entire sector could be adversely affected.