Confusion over regulation of legal services is leaving consumers vulnerable and exposed, the Legal Ombudsman concludes today.

Adam Sampson will publish his first annual report to parliament later today, following the launch of the organisation in October 2010.

Sampson said that despite some ‘shocking’ stories, he is generally content with the quality of legal services provided, but more problematic are gaps and confusion in which services are regulated, and which are not.

Sampson says: ‘One service which crops up a lot is will-writing. It’s a service carried out often by will-writing firms which aren’t regulated. Because of this customers are left with little means of redress when things go wrong.

‘We’ve seen similar confusion about claims management companies, with lots of consumers believing they’re getting a legal service even though most of the work is carried out by a non-authorised person. Again, we can’t help.’

Sampson said some of the stories he had heard were ‘shocking’, but added that ‘most lawyers do a good job for their clients and, when things do go wrong, we generally see a great willingness from the profession to work and to learn with us’.

Sampson’s move to highlight the damage done to the profession by unregulated individuals was welcomed by consumer organisation Which? and by the Law Society.

Desmond Hudson, chief executive of TLS, added: ‘The gap in regulation which allows unregulated cowboys to operate in areas like will writing does not just cause unfair competition to solicitors, who provide a regulated, professional service.

‘It is also damaging to consumers, because the unregulated providers are not insured, do not provide a compensation fund and are not covered by the Legal Ombudsman’s scheme for consumer redress.’

The changing market after the Legal Services Act comes into force in October could inject further confusion into the understanding of which service provider is regulated and which is not.

Sampson said there is a risk that consumers will be left bewildered about which regulator is supposed to be protecting their interests.

He added: ‘Some firms offer ‘expert’ online legal advice which is often bundled with financial or insurance services, and many of these are backed by large corporations. Naturally, consumers expect the same standard of care as from their local lawyer, but in some cases it’s woefully lacking.

‘Thing aren’t helped by many unregulated companies masquerading as traditional law firms, branded with more legal wigs and gowns than you can shake a quill pen at.’

The Legal Services Board launched an investigation into whether will-writing should be a regulated activity last week, following a recommendation from its Legal Services Consumer Panel that it should be.