SME legal needs remain unmet LSB research reveals

SME legal needs remain unmet LSB research reveals

The Legal Services Board (LSB) has published a follow up report to the one published in 2013 looking at the legal needs of small businesses. The report links the success of small firms to the ease with which they can access the support and advice they need – especially in relation to the law and dispute resolution.

The key findings from the report include:

  • Legal problems faced by small businesses appear to have declined in incidence but remain costly;
  • The number of legal problems reported to be faced by small businesses reduced significantly over the last two years reflecting better trading conditions;
  • One in five owners who reported legal problems said these led to health problems;
  • Engagement with legal service providers is limited – the large majority of small businesses have little contact with legal advisers and fewer than one in 10 firms employed in-house lawyers or had a retainer with an external provider;
  • When advice was sought, accountants were consulted more often than lawyers;
  • Only 13 percent of small businesses viewed lawyers as cost effective and almost 50 percent use legal service providers as a last resort to solve business problems.

Legal Services Board Chairman, Sir Michael Pitt, said:

“Access to good quality and affordable legal services helps small businesses to start up and grow.

 

This research – the largest ever survey of its kind –provides further worrying evidence that their legal needs are not being satisfactorily met. These findings suggest that small business access to and use of legal services has improved little since we first looked at the issue two years ago.

 

But this also presents an opportunity. There continues to be a huge section of the business community whose legal needs are not being catered for. This is an opening which the legal sector should be addressing!

 

Legal problems can have serious negative financial and health consequences for small businesses and their owners. Many of these issues can be avoided by accessing legal help at the right time. The legal sector needs to look at what it can do to fill this advice gap. In doing so it will create the customers of the future.”

The 2015 “legal needs of small businesses” report can be found on the LSB web site here, whilst, for comparison purposes, the 2013 report “legal advice for small businesses” can be found here.

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