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Small businesses 'missing out on legal advice'

Posted by: Laurence Simons 30/05/13

Times are tough for small businesses in the UK, with demand falling and the cost of trading increasing. Many have been forced to get rid of their stainless steel cafetieres and replace them with own-brand instant coffee, while others have encouraged staff to bring in their own desks and chairs.

While these strictures are difficult, a more serious concern could be their inability to access legal advice, because of a perceived lack of value or confusion over the pricing models offered by law firms.

This could also be bad news for people in legal careers - regional legal organisations often rely on business from small to medium-sized enterprises (SMEs) to top up their coffers, and it would clearly be in the best interests of both parties to come to some kind of resolution.

According to a major Legal Services Board (LSB) research project, 52 per cent of firms in the UK now handle their legal issues in-house, while only 13 per cent believe that lawyers offer a cost-effective solution to problems of this kind.

While one reason for this perception may simply be the engrained perception of lawyers as gimlet-eyed money-making machines, inefficient pricing models are also playing a part.

Knights Solicitors managing partner David Beech told Legal Week that hourly rates and bad processes often prove to be the sticking point between legal firms and smaller organisations looking for advice.

"Law firms need to charge what clients want to pay rather that what the clock says - they have to find cost effective ways of delivering the same services for less," he declared.

The LSB expressed its hope that this will incentivise the creation of these methods, especially as firms scrabble for superiority in a crowded marketplace.

Strategy director Crispin Passmore said: "Seven out of eight consumers say lawyers aren't offering a cost effective way to resolve problems, so it appears law firms aren't doing as good a job as they could be doing. We need to have more choice and a more competitive market."