Business Times takes a look at how small businesses can get the legal advice they need without breaking the bank.
Seeking legal advice in the UK can be a costly and time-consuming process for small businesses. So much so, that it has become something of a last resort. In fact, a recent report by Deloitte showed that in 2015 around 55 per cent of UK small businesses and individuals had a legal matter worth pursuing – but only 20 per cent went ahead and sought the required legal support.
Research shows that 38 per cent of small businesses experienced significant legal problems last year, with an average cost of £7,000. That can be enough to impact running costs and in some cases can mean the difference between remaining afloat or not.
To make matters worse, those businesses who can afford some level of legal support are not overly enamoured by the quality of services they receive, with only a small number of businesses feeling they get value for money from their chosen legal service provider.
It is inevitable that every business will require legal advice or representation at some stage. In a perfect world, it would be smooth sailing all the way – but who lives in a perfect world?
In order to strive forward and flourish, what is really needed is quick, good quality advice and the funds in place to clear any hurdles that stand in the way.
The legal industry has changed a lot over the past few years – adapting to the demands of small businesses – and there is light at the end of the tunnel. Some £10 billion is the estimated amount of annual losses recorded by the UK’s small businesses due to legal issues.
Read that again. £10 billion! And the cost isn’t only financial, with over 20 per cent of business owners reporting ill health as a direct result of lengthy and expensive law suits.
Additionally, half of every small business involved in legal action believes they don’t get good value for their money and, as stated earlier, more and more turn to lawyers as a last resort.
Fortunately, there are lots of options out there that can help you keep costs to a minimum and give you some great advice. It’s worth looking at your local academic institutions as many of these will run part-time courses helping you get to grips with the legal business basics.
You could also approach centres such as the Citizens Advice Bureau or local startup groups. Many of these organisations host networking events which provide great opportunities to meet business owners who have had similar experiences, so are well placed to pass on their words of wisdom.
Finally, a number of these centres, and indeed law firms themselves, run drop in clinics where owners can have one-on-one sessions with lawyers. Be sure to take advantage of these where possible.
With Legal Services Board chairman Sir Michael Pitt claiming that access to affordable and good legal representation is showing no sign of improvement, something has to give.
Desperate times call for desperate measures… But what shouldn’t you do?
It is not only litigation that costs money – for start-up businesses there is a legal minefield to negate that could be eased with the help of a legal professional, but fear of costs mean that many businesses will opt for DIY methods instead – a choice that often proves more costly in the long run.
So, what can you do?
You may question what this means – that’s because it’s a new concept. Legal Cost Finance has created a means of covering the costs involved in all types of legal matters, contentious and non-contentious, which can be repaid over a period of time that suits the business.
This means there is, in effect, a clear path to justice for those who need it most, and it means that all sides are happy. The small business can spread their legal cost payments to suit their budget, while the lawyer knows they will be paid in full and on time.
Dr Yuri Rapoport, CEO and founder of Legal Cost Finance says, ‘We identified the areas we felt people and businesses were struggling to get access to justice, and provided a solution. We have a range of payment plans available that suit every possible situation – all tailored to suit each case.’
Unlike ‘litigation funding’, which is limited to contentious legal cases and claims a stake in the proceeds of a case outcome, ‘direct financing’ provides a means that is not restricted to any particular type of legal matter, and is not tied to the chances of success, plus it’s available for all types of legal costs.
The UK is reputed to have the best legal justice system in the world – yet if those who need to use it are unable to access it because of the costs involved, then the quality of the legal system means very little. However, finally, there is at least one solution – payment plans – representing a tangible way forward for small businesses facing expensive and/or unexpected legal bills.