The true cost of ignoring legal problems

I was astonished to read a recent article in Law Society Gazette which highlighted some research about the reluctance of businesses to use legal services.

The research, commissioned by the Legal Services Board, showed that just one in eight small businesses will turn to a solicitor to solve a legal problem despite many suffering financial loss as a result.

It found only 12 per cent of legal problems resulted in demand for advice from solicitors’ firms with more than of half of respondents opting to handle legal problems on their own.

Just five per cent of small businesses had an in-house expert and eight per cent had legal retainer contracts.

The cost of ignoring legal problems

More than 45 per cent of the 9,703 small businesses surveyed in the YouGov poll said legal problems had a tangible effect on their company in loss of income, additional costs or loss of reputation.  Respondents were asked to estimate the monetary value of the adverse consequences of these problems, reporting a median value of £1,200 per problem.

Despite my surprise at these findings, I do understand why businesses, particular smaller businesses, are reluctant to use legal services.  Many businesses have been put off using a solicitor because of the potential for costs to spiral and a perceived lack of value for money.

The truth is that many law firms have failed to keep pace with demand for more cost-effective legal solutions, a demand driven by these more austere times.  Traditional ‘on the clock’ charging structures do put a lot of SMEs off picking up the phone to their lawyer for fear of running up a large legal bill.  There has to be an alternative.

An alternative to ‘on the clock’ legal costs

This was the main reason behind the launch of our HD Anytime product, a fixed fee legal services retainer aimed at businesses.

Since we launched HD Anytime in 2011, it has proved to be a popular solution for many businesses, because it offers proactive advice that focuses on preventing legal problems arising in the first place, rather than just remedying them.

We see this as a partnership problem solving approach that encourages the client to work with their solicitor without fear of incurring unlimited costs, while protecting their business at the same time.

For more information on HD Anytime, or help with any legal matter, contact me on 01772 258321 or John.Chesworth@harrison-drury.com