The legal needs of small businesses Our research allows an understanding of how small businesses respond to the legal A guest article from Robert Cross, Research problems they face, what drives their Manager at the Legal Services Board, outlines the findings of new research into responses, and what prevents them from small businesses responding in certain ways. This is something The Legal Services Board’s “Legal needs of we all have a stake in: small businesses are small businesses 2013-2017” report was the engine of the economy, employment and published at the beginning of February. The growth. report analyses the findings of a legal needs survey of 10,579 small businesses, and is broadly representative of the 5 million small businesses which constitute 99% of all businesses in England and Wales. It shows high rates of problem incidence – 31% per This understanding helps move debates about annum – but low usage of legal services. Only these issues from the conceptual to the 24% of legal problems result in the use of practical; informing a policy response from lawyers. The report also allows comparisons regulators as necessary, but also providing the to be made with surveys undertaken in 2013 basis for law businesses (and competitors and 2015. such as accountants, professional service firms and banks) to design services and Background products, and delivery mechanisms that meet What is a legal need? Well it’s a term very small businesses’ needs more effectively. familiar to those of us who are concerned Key findings with improving access to justice, supporting the rule of law and protecting and promoting Around a third of small businesses (31%) had the consumer interest. A legal need is an a legal problem in the preceding 12 months. issue of everyday life that is amenable to legal This has fallen significantly from 36% in 2013. advice – for a small business this might mean The most frequent issues across the three taking on employees, protecting intellectual waves of the survey are: late or non-payment property, expanding into new premises, for goods or services provided; goods and accessing bank finance, and of course more services not as described; and liability for tax formal disputes. It’s not that legal advice is owed. There have been significant falls in the essential for these issues; more that good incidence of legal problems, except legal advice can help firms tackle these issues regulation. effectively, manage risk and resolve disputes.
The legal needs of small businesses A guest article from Robert Cross, Research Manager at the Legal Services Board, outlines the findings of new research into small businesses The Legal Services Board’s “Legal needs of small businesses 2013-2017” report was published at the beginning of February. The report analyses the findings of a legal needs survey of 10,579 small businesses, and is broadly representative of the 5 million small businesses which constitute 99% of all businesses in England and Wales. It shows high rates of problem incidence – 31% per annum – but low usage of legal services. Only 24% of legal problems result in the use of lawyers. The report also allows comparisons to be made with surveys undertaken in 2013 and 2015. Background What is a legal need? Well it’s a term very familiar to those of us who are concerned with improving access to justice, supporting the rule of law and protecting and promoting the consumer interest. A legal need is an issue of everyday life that is amenable to legal advice – for a small business this might mean taking on employees, protecting intellectual property, expanding into new premises, accessing bank finance, and of course more formal disputes. It’s not that legal advice is essential for these issues; more that good legal advice can help firms tackle these issues effectively, manage risk and resolve disputes. Our research allows an understanding of how small businesses respond to the legal problems they face, what drives their responses, and what prevents them from responding in certain ways. This is something we all have a stake in: small businesses are the engine of the economy, employment and growth. This understanding helps move debates about these issues from the conceptual to the practical; informing a policy response from regulators as necessary, but also providing the basis for law businesses (and competitors such as accountants, professional service firms and banks) to design services and products, and delivery mechanisms that meet small businesses’ needs more effectively. Key findings Around a third of small businesses (31%) had a legal problem in the preceding 12 months. This has fallen significantly from 36% in 2013. The most frequent issues across the three waves of the survey are: late or non-payment for goods or services provided; goods and services not as described; and liability for tax owed. There have been significant falls in the incidence of legal problems, except regulation.