In particular, there is not enough information available on price, quality and service to help those who need legal support choose the best option.

The CMA says its market study showed that small businesses are disproportionately affected by this lack of information and can find it hard to identify their exact legal needs and to choose the right provider.  It is especially important that they engage a commercial law expert who is able to rapidly gain an understanding of business needs and provide expert, timely advice.

The study showed that it is hard to compare price, quality and service and that many businesses simply use a solicitor recommended by a friend or colleague without carrying out further research into the market. 

The CMA says this does not guarantee value for money and a lack of clear, comparable information in the industry limits competition between legal providers.  This may keep prices high –and legal firms will have little incentive to innovate or improve their services for clients. The CMA has set out a package of measures which challenges providers and regulators to help customers better navigate the market and get value for money.

These changes have been drawn up after discussions with the eight frontline legal regulators, and will be overseen by the Legal Services Board, which will report regularly on progress.

They include a requirement on providers to display information on price, service, redress and regulatory status to help potential customers. This would include publishing pricing information for particular services online (only 17% of firms do so at present).

The CMA also wants the existing Legal Choices website to be revamped and promoted more widely as a starting point for help, information and guidance on how to navigate the market and purchase services.

It wants to see the development of comparison sites and other intermediaries to allow individuals and companies to compare providers in one place by making data already collected by regulators available. At present only 22% of people compare the services on offer before appointing a lawyer.

Legal service providers should also be encouraged to engage with feedback and review platforms to ensure that customers can benefit from the experience of others before making their choice.

The CMA further recommended that the Ministry of Justice (MoJ) looks at whether to extend protection from existing redress schemes to customers using ‘unauthorised’ providers.

In addition, as part of the study, the CMA considered the impact of legal services regulation on competition. The CMA found that whilst the current system is not a major barrier, it may not be sustainable in the long term. In particular, the framework is not sufficiently flexible to apply proportionate risk-based regulation which reflects differences across legal services which could harm competition.

The CMA is therefore also recommending that the MoJ reviews the current framework to make it more flexible and targeted at protecting consumers in areas where it is most needed.

Rachel Merelie, acting executive director for markets and mergers, said: ‘You might not need a lawyer very often but when you do it will often be at a crucial point in your life – whether that’s buying a property, resolving a dispute or getting expert advice on financial and employment matters. So the transparency, affordability and accessibility shortcomings we have identified are a real concern.’

The CMA has pledged to re-evaluate progress and the impact of the recommendations in three years’ time and intervene further if progress is not satisfactory.

The MoJ ran a month long consultation this summer on removing barriers to entry for ABS models in legal services.

The proposals are designed to reduce barriers to the licensing of, and regulatory burdens on, legal services businesses that are licensed as ABS, bringing the legislative framework for these businesses more in line with that for other legal services businesses.

The MoJ said this would open up the legal services sector to more innovative businesses, encouraging greater competition and affordable legal advice for consumers. Details of the outcome of the consultation and possible changes have not yet been published.