The oversight regulator for legal services says only ‘limited’ progress has been made to encourage competition in the sector since 2016.

The Competition and Markets Authority (CMA) is looking again at the legal services sector four years after reporting major issues with helping consumers make an informed choice of which lawyer they should instruct.

The Legal Services Board this week told the CMA that regulators and providers can do ‘much more’ to improve consumer engagement and competition in the sector.

In particular, the organisation said that transparency reforms – including new rules requiring solicitor firms to publish prices for certain services on their websites – have had limited impact on competition so far.

Its response to the CMA adds: ‘There is still a significant dispersion of prices for the legal services sector. Where firms were behaving more competitively, we would have expected to see a narrowing of this dispersion.

‘There is no consistent pattern of the spread of prices, nor any clear trend between 2017 and 2020. Indeed, our evidence suggests that most prices, regardless of complexity of case or practice area, are increasing.’

The LSB reported a ‘slow increase’ in consumers shopping around for legal services, with transparency reforms having no effect on this.

Too many people and businesses are not engaging with legal services when they need them, and for many a simple lack of knowledge about how the legal system works is putting them off, the response states. 

Future reforms suggested include promoting independent performance data, such as complaint figures, publishing independent consumer feedback and giving general information about a lawyer’s background and experience.

The LSB suggests it may also be necessary to extend mandatory rules about which practice areas where costs should be published. This requirement currently applies to conveyancing and wills and probate but not, for example, to divorce.

The LSB is likely to be a key contributor to the CMA’s analysis of the legal services market, with a report due out before the end of this year.