YouGov Survey shows legal issues are costing UK SMEs nearly £7 million pounds per hour

At the end of 2016, we commissioned YouGov to survey 1000 SMEs all over the UK across 20 different business sectors to highlight the impact of not taking care of a business's legal needs. Not only that but we also asked about their general attitudes to the law and lawyers to see whether there was a correlation... there certainly was! Read on for the highlights of what we found... We found that UK SMEs are losing more than £13.6 billion per year or nearly £7 million an hour from neglecting their legals.  Companies are experiencing around 8 issues on average every year! With around 5 million SMEs in the UK, which make up 99% of companies in the private sector, this potentially has a significant impact on the UK economy.  This makes particularly interesting reading in a post-Brexit, pre-election environment, which already includes new inflation and tax pressures on the UK’s smaller businesses.  The most common legal issues faced by the UK’s 5 million SMEs day-to-day were found in five key areas:

With the highest amounts estimated to have been lost in:

Given the number of incidences of these kinds of issue, SMEs are over-optimistic about the prospects of future losses occurring because of these problems - with only 12% thinking these issues are ‘likely to pose a significant risk’ to their business.  Interestingly, this percentage more than doubles (25%) when they are asked to forecast whether these problems are likely to affect other businesses rather than their own. ‘SMEs wrongly assume that risky outcomes are more likely to happen to other businesses than to themselves.’ Clive Rich, LawBite Chairman A likely cause for these extraordinary levels of loss is SMEs’ reluctance to use lawyers. The Survey reveals a deep unease with traditional law firms.  Only 8% say that legal fees are good value for money. Only 1 in 5 SMEs rate law firms as ‘good’ in terms of ease of access and over 70% of respondents say that legal documentation is not easy to understand. There appears to be a direct correlation between the negative attitudes of businesses to using lawyers (and law firms) and the amount they are at risk of losing per year. There is a reluctance to spend money on something they believe to be expensive, slow and generally inaccessible. The good news is that, new, emerging law-tech firms such as LawBite provide fast and simple access to expert lawyers at a fraction of the usual price. Such firms are shaking up the legal landscape and proving to be a disruptive force in a typically traditional industry, using technology to slash costs by half in most cases.  Here are LawBite, for example, SMEs can take a free Legal Health Check in the first instance to identify their legal risks and speak to an expert lawyer to prevent or reduce potential damage to their business. Technology continues to be a dominant force for change across all industries and can prove to work in the favour of smaller UK businesses, where reducing costs is so crucial to their success. Remember to take our FREE Legal Health Check to see where you could be exposed or submit an enquiry to one of our LawBriefs for a free 15-minute consultation. Read the full YouGov Survey Report here.