The Legal Ombudsman will next week set out plans for a voluntary scheme to cover unregulated parts of the legal sector.

A discussion paper will be released just days after proposals to cut 10% of its staff were confirmed.

The ombudsman told workers this week that 25 roles are being considered for redundancy after the volume of complaints was lower than expected.

According to its annual report published last month, the ombudsman had 262 full-time employees as at 31 March, an increase of six compared with the previous year.

But the service is coming under increasing financial pressure despite cutting spending by around £700,000 last year.

A spokesman said: ‘In our business plan this year we committed to achieving a high-performance organisation that is effective and responsive. Since publishing our business plan we have seen fewer cases than expected through our doors - partly due to the economic climate and also due to improved performance by lawyers at the first tier.

‘The restructure is intended to ensure we continue to resolve complaints efficiently and cost-effectively. The changes will allow the ombudsman to meet its unit cost key performance indicator (KPI), a key measure agreed with the Legal Services Board.’

A discussion paper about the ombudsman’s future remit is expected to be published next week.

It will suggest drafting proposals for the justice secretary to approve a voluntary scheme for unregulated providers of legal services.

The scheme would allow those providers, will-writing firms for example, to opt into Legal Ombudsman jurisdiction and be subject to its powers. It can then give reassurance to customers that they have somewhere to go in the event they are unhappy with the service.

The workload of the service has fallen in recent months, with complaints in 2012/13 falling to 71,195 from 74,420 the previous year. There was also a year-on-year rise in cases resolved, from 7,630 to 7,455.

The government stated last summer that the LeO would handle complaints about claims management companies, but technical issues with the Legal Services Board have prevented that from happening so far.

Total expenditure last year on the ombudsman service, which is funded by practising certificate fees, was £16.6m, cut from £17.3m in 2011/12. This was £400,000 under budget.