New research shows failure to deal with legal issues costs in excess of £100bn every year Authoritative new research published this week shows that small businesses are being let down by legal services providers and need to fight back, according to Riverview Law, the fixed-priced legal services business. The benchmarking survey of nearly 10,000 small businesses by the Legal Services Board (LSB) – the largest study of legal need ever conducted among this group – finds that:
- Over the previous year, 38% of small business experienced a ‘significant’ legal problem; nearly half of these problems resulted in a negative financial impact on the business, with the average cost of each problem put at £6,700. Scaled up across the UK, this means a cost to business of £100bn.
- Many businesses handled legal problems alone and only 13% agreed that lawyers provide a cost effective means to resolve legal issues.
- Legal problems caused health issues for one or more people working in a fifth of small businesses.
- Having a legal retainer was strongly linked with dealing with everyday problems.
The LSB says it plans to use the research to challenge legal regulators to help small businesses and Riverview Law has vowed to support the LSB in its efforts. Katy Robson, product manager for the SME services offered by Riverview Law, says: “Small businesses know they’re running a risk by doing it themselves but don’t pick up the phone to a lawyer because they’re worried about the cost. Yet the LSB research shows that this can often be a more costly way for them to operate. “What does this say about the way legal advice is currently provided? It simply isn’t good enough. I would encourage small businesses to demand more from their legal services providers. For too long solicitors’ firms have done business the way that suits them, rather than their customers. In the 21st century, that cannot continue.” Riverview Law has issued its own guidance to small businesses about how to approach their future legal requirements. It advises them to:
- Get as much as you can for free: The ‘ticking clock’ is one of the biggest gripes businesses have with lawyers, having to pay for every piece of contact. You should be paying for bespoke legal advice, not a document a lawyer just pulls out of a drawer. Fortunately, there
- is a lot of free information out there, look for lawyers that provide free library access to a range of documents and will talk to you for free.
- Negotiate hard: Start your conversation with any firm by saying you require price certainty. If they won’t agree, walk away, there are plenty of lawyers out there who will.
- Prevent not cure. Don’t wait for the worst to happen; take a pro-active approach to your legal affairs by reviewing the areas of your business affected by legislation and getting a legal health check or document review which can reduce/remove future issues. The LSB research found that having a legal retainer was strongly linked with problems occurring more frequently but having a lower financial impact and indicated the value of legal services provided in this way.
Riverview Law works with thousands of SMEs providing free advice via its online legal library and a free call with one of its lawyers so that SMEs can test the service. Additionally it provides fixed price annual contracts covering all legal requirements SMEs typically have. It also offers fixed price quotes for ad-hoc legal requirements if businesses do not want an annual contract. Customer case studies can be reviewed here.