UK SMEs encounter 8 legal issues a year
Posted on in Business News , Cycles News
A survey commissioned by online legal tech firm LawBite found that SMEs experience on average 8 legal issues every year.
According to the survey, the most common legal issues faced by the UK's 5 million SMEs day-to-day were found in five key areas:
- Disputes (13.2%)
- Employees and Key Contractors (12.5%)
- Customers and Suppliers (11.4%)
- Terms and Conditions (9.2%)
- Software (9.1%)
With the highest amounts estimated to have been lost in:
- Disputes (£1.7 billion)
- Employees and Contractors (£1.6 billion)
- Customers and Suppliers (£1.6 billion)
Despite the huge amount SMEs are losing in these cases, just 12% think 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.
Clive Rich, LawBite Chairman said: ‘SMEs wrongly assume that risky outcomes are more likely to happen to other businesses than to themselves.'
A likely cause for these extraordinary levels of loss is SMEs' reluctance to seek legal advice. The Survey reveals a deep unease with traditional law firms, with only 8% saying 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.
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