Solicitors still top choice for SMEs

Solicitors remain the professionals of choice for small businesses seeking legal advice despite growing interest in the sector on the part of banks and other professional advisers, according to Legal Services Board research released today.

Prepared by Professor Pascoe Pleasence and Dr Nigel Balmer, 'In need of advice? Findings of a Small Business Legal Needs Benchmarking Survey' canvassed 9,703 SMEs in December 2012 - the first survey on this scale.

"The talk was that solicitors were losing that business to accountants but this is not borne out in the findings," said LSB chief executive Chris Kenny (pictured).

The report estimates that SMEs face an aggregate number of 1.8m legal issues every year, costing an estimated £100bn to the sector.

Of those surveyed, 91 per cent said they took action when identifying a legal issue, and while 52 per cent decided to handle the matter alone, 12 per cent of those seeking professional assistance turned to solicitors - the highest source of advice.

Altogether, 17 per cent of all legal problems resulted in approaches for advice from reserved providers. The next professionals down where accountants, representing 8 per cent, followed by trade or professional bodies at 4 per cent.

Nearly half of all legal problems encountered by SMEs related to disputes with other businesses (48 per cent). In comparison, only 18 per cent were with members of the public, 17 per cent with government bodies.

Problems with employees accounted for 10 per cent, although this was where businesses were most likely to take action.

Asked whether online legal providers had any impact on the SME sector, LSB head of research Alex Roy replied it was too early to say.

Roy also suggested it would be unlikely the government would set up a publicly-funded legal assistance service where the market was able to supply it. Earlier this year the Consumer Panel called on the government to set up a legal service similar to NHS Direct for consumers.

"The government already provides a fair amount of generic information for businesses," Roy said. "The problem is when services are tailored to individual cases. This is where the market could provide a solution."

The research also contained less uplifting news for solicitors, with only 13 per cent of respondents saying lawyers provided a cost effective means to resolve legal disputes.