Small businesses don’t view lawyers as cost effective, survey finds

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5th November 2015 14:35 - Professional Services

A recent professional services survey, conducted on behalf of the Legal Services Board (LSB), has revealed that just 13 per cent of small businesses believe that Small businesses don’t view lawyers as cost effective, survey findslawyers “provide a cost-effective means to resolve legal issues”.

The survey findings also revealed that just 10 per cent of small businesses have used a lawyer in the last 12 months, a decrease from 20 per cent in 2014. The report did outline, however, that the decline was not as sharp for accountants, with 49 per cent in 2015, in comparison to 60 per cent in 2014.

The small businesses who sought help with a legal issue were found to be more likely to involve an accountant, at a rate of 21 per cent, in comparison with 15 per cent who said they would contact a lawyer. A further 5 per cent said that they would use a barrister. The market researchers said that these findings were a reflection of business’ relationships with accountants.

The online survey – which 10,528 people from small businesses and not-for-profit organisations took part in – also revealed that the number of respondents who agreed with the statement: “lawyers provide a cost-effective means to resolve legal issues” rose from 12.3 per cent, to 13.4 per cent since 2013.

When the respondents who had used a lawyer in the last year were asked whether they found the search for a suitable legal services provider easy, 53 per cent agreed and 18 per cent disagreed.

The researchers discovered that there was a large increase in the amount of people who believed that “law and regulation provide a fair environment for business to succeed”, from 30 per cent in 2013, to 45 per cent this year. The researchers attributed the rise to “improving economic conditions as well as improvements in the regulatory environment”.

According to the study, there was also a sharp decline in the average number of legal problems which a small business experienced, from 21 to 13.

When looking at the businesses that experienced legal issue, caucasian business owners/managers were found to have less legal problems than those who were minority ethnic or disabled.

Although businesses did not think that lawyers were cost effective, when those who had sought the help of a lawyer were asked what the most important factor in the choice of provider was, 30 per cent said that reputation was most important, 25 per cent said specialist knowledge and just 16 per cent said the cost.

The businesses that had used a solicitor in the last 12 months were found to be most likely to look for advice on trading issues, closely followed by tax, commercial property, employment and business structure.

Of the businesses in the survey, just 5 per cent said that they had in-house lawyers. The larger firms in the survey were more likely to use solicitors.

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