Over the previous year, 38 per cent of small businesses experienced a ‘significant’ legal problem with nearly half of these problems resulting in a negative financial impact on the business, according to a study by the Legal Services Board.
The average cost of each problem is £6,700, meaning an overall cost of £100 billion to UK business.
Furthermore, legal problems caused health issues for one or more people working in a fifth of small businesses, the study of 10,000 respondents finds.
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.’
Riverview Law has issued its own guidance to small businesses about how to approach their future legal requirements.
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.
Prevention, not cure
Don’t wait for the worst to happen; take a proactive 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.
