According to the Legal Services Board, the majority of small businesses tend to avoid seeking professional legal support unless they feel they have no option. Many small businesses, the Board said, see legal advice as expensive and as something to be kept as a last resort.
In a recent report, the Legal Services Board identified considerable reluctance among small businesses to make use of solicitors’ services, largely because of the costs involved. According to the research presented in the report, most small businesses have had little or no professional contact with the legal sector in the past year.
The report, The Legal Needs of Small Businesses 2015 Survey, identifies a number of trends among small businesses when it comes to seeking the help and support of lawyers. For the purposes of the survey, small businesses were defined as those employing 50 people or fewer – a group which, the report says, represents 99% of all UK businesses, 48% of employment, and 33% of the nation’s total business turnover.
Less than 10% of all small businesses in the UK, the report showed, had either an in-house lawyer or an external legal services firm with which they held a retainer. When businesses did pursue professional help and advice with their legal challenges, this was more often the advice of an accountant rather than of a solicitor.
Nearly half of all small businesses responding to the survey either agreed or strongly agreed with the statement that professional legal services represented a “last resort” when it came to dealing with relevant problems faced by their business. This compares to a mere 12 % who said that they either disagreed or strongly disagreed. This is perhaps explained b the fact that a mere 13% of respondents said that seeking the help of a lawyer was, in their opinion, a cost-effective solution to problems.
Usage of legal services from external providers has also declined since 2013. However, the report says the past two years have seen a significant reduction in the number of legal issues that small businesses encounter as a result of “better trading conditions,” so this could partly account for the decline. Nonetheless, legal issues remain an expensive problem for smaller businesses, costing them an estimated total of £9.7 billion annually.
Legal Services Board chair Sir Michael Pitt expressed disappointment at the survey’s findings. “Access to good-quality and affordable legal services,” he said, “helps small businesses to start up and grow.”
The findings of the Board’s new research, he continued, “provides further worrying evidence that their legal needs are not being satisfactorily met.”