Small businesses do not believe lawyers provide a cost effective means to resolve legal issues and should be a last resort when solving business problems.
SMEs have little faith in lawyers with only 11 per cent believing that lawyers provide a cost effective means to resolve legal issues whilst half say lawyers are at the bottom of the list when business problems have to be resolved. Around half of those reporting a legal issue said it had a negative impact on the business. Meanwhile total annual losses to small businesses due to legal problems is estimated at £40bn. Over one million individuals in SMEs suffer ill health as a result of these legal problems.
The research, which was carried out by the Legal Services Board, found that around a third of small business had a legal problem in the preceding 12 months. Levels of incidence have fallen in all problem areas except regulation. The most frequent issues across the three surveys are: late or non-payment for goods or services provided; goods and services not as described; and liability for tax owed. Other businesses were the main source of problems, nearly 44 per cent of businesses said. The findings were based on an online survey of 10,579 owners and managers of small businesses - defined as having fewer than 50 staff.