The biggest barrier to small businesses securing proper legal assistance lies in price transparency. A recent report, commissioned by the Solicitors Regulatory Authority (SRA) shows that small business owners value clear, accessible pricing above other factors when they are seeking legal help.
More than 4,000 SME owners and managers were questioned by YouGov and Europe Economics in the report. Results show that small businesses are the most affected by price, with almost two-thirds of respondents citing solicitor’s fees as a barrier to engaging legal assistance.
The general perception that solicitors always have high costs is so strongly ingrained that many respondents say they never even look at legal providers. This attitude shifts when legal firms openly advertise their pricing structure.
Half of SME owners say they are more willing to research legal providers, if they can see the fee structure clearly displayed on their website. This shows that the legal sector is not fully trusted by small businesses and they believe they will struggle to meet unpredictable costs. It’s such a strong expectation that many are hesitant to approach legal experts at all.
Many respondents say that instead of seeking legal representation, they look for cheaper options, including employment consultants or HR experts. Others rely on their own instincts and experience to rectify matters internally.
Not transparent enough
Although fee structures are freely available from legal firms, they are not always shown clearly online. And this is the first port of call for most small business owners today. Legal firms should view publishing prices online to get secure new business.
Many solicitors see fee transparency as a compliancy-only issue. This survey shows that this is losing them clients from the small business community.
This research shows that the firms publishing clear, accessible fee information are benefiting from opening communication channels with SMEs. By ensuring that expectations are understood on both sides, there would be an upsurge in small business owners using legal representation.
Cost dictates choice
When small business owners need a service, their choice is often dictated by costs. This applies to suppliers, contractors, employees and everything else required to run a small business. Business owners have an expectation that costs for services are transparent and achievable. The legal sector is no different.
The report shows that small businesses almost exclusively rely on the Internet, and that customer testimonials are key, when they choose a legal service. Most business owners research legal service providers every time they need one, rather than return to a solicitor they’ve used before.
Just over 40% of small businesses report that they will spend time researching when looking for legal advice. Three-quarters said they would look further into providers if there was easily available pricing information online.
Good for small businesses
The report says: “This research suggests that firms that do publish price information could benefit from increased contact from small businesses as their expectations about the costs of using a solicitor is lower when costs are publicly available. And firms that publish price information may gain, or at least retain, market share in an increasingly competitive market.”
This is key information for legal firms, but more so for small businesses. Business owners that need legal assistance should engage professional help, with this report showing that the expectation of exorbitantly high prices and prohibitively rising costs in the legal sector is not always the case.
James Turner, Managing Director of Turner Little Limited says: “Small businesses that need legal assistance or representation shouldn’t cut corners. Attempting to deal with legally sensitive issues, either internally or by engaging cheaper consultancy help, can be a fatal error.
“While it’s understandable that the legal sector is seen as prohibitively expensive by SME owners struggling with cashflow, this isn’t always the case. It’s likely that we will see more legal firms publishing their fee structure more transparently on websites. If legal firms refuse to be transparent and understand that the market is becoming more competitive, then they will lose out.
“It’s good news for small business owners that solicitors understand the need to be transparent. By busting the myth that all solicitors are hugely expensive, the legal sector can forge much more meaningful and lasting customer relationships with small business owners. In turn, this will mean small business managers and owners aren’t taking risks when dealing with potentially legally tricky issues.”
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.