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Legal Services for UK SMEs 2021: Consumer Research Report

  • ID: 5361779
  • Report
  • July 2021
  • Region: United Kingdom
  • 39 Pages
  • IRN Research
Almost Half of All SMEs are Expecting to Increase Their Demand for Legal Advice in the Next 18 Months

Legal Services for UK SMEs Research Report 2021 is based on responses from 383 owners and senior executives.


SMEs have a wide and varied range of legal needs and almost half have regular needs, i.e. a legal issue at least once a month.


These legal needs are addressed in numerous ways: law firms and solicitors are the main source of legal advice for SMEs but they are only used by a third of SMEs in this survey reflecting the competitive nature of this particular legal advice sector.


There are clear opportunities in this sector for legal advice providers as almost half of all SMEs are expecting to increase their demand for legal advice in the next 18 months and, in particular, will be looking for more legal advice related to redundancies, new ways of working, employment contract changes, and financial issues following the pandemic. Over half of SMEs surveyed are expecting to make some staff redundant once furlough ends.


There are also opportunities for more flexible pricing models: hourly fees still account for the most used payment method but more SMEs would prefer other options like fixed fees or retainer/subscription based models. Flexible approaches to the client-advisor relationship are shown by the fact that over a quarter of SMEs have already embedded external legal advisors into their business at some point to fill staff gaps or to work on specific projects for example.


Other headlines from the survey include:


  • 65% of respondents had consultations with their legal advisor during the pandemic and half of these used video for these consultations. Over 8 out of 10 were comfortable with the video consultation and would be happy to continue to use this approach.
  • Price information on a law firm website would be a factor in persuading an SME to use that firm over another that did not publish prices: 80% of participants agree with this.
  • Around three-quarters would be interested in other professional services offered by law firms. A similar percentage would consider legal services from accountants.

1. EXECUTIVE SUMMARY


  • Overview
  • Almost half of SMEs have at least one legal issue every month or more
  • Employment, tax, contracts, health & safety - main legal issues
  • Various sources used for legal advice but led by law firms and solicitors
  • Over a quarter have brought external advisors into their business at some point
  • No standard approach for the procurement of legal services
  • Over a third use law firms/solicitors a few times a year
  • A clear majority use the same solicitor for both business and personal advice
  • Around 8 out of 10 are satisfied with most service features from legal advisors
  • Choice factors led by experience and reputation
  • A mix of fee models but hourly fees still important
  • Video consultations popular in pandemic and over 8 out of 10 comfortable with these
  • Clear interest in other professional services from law firms and vice-versa
  • Price information on a law firm website is an influence on choice
  • Redundancies likely for majority plus more hybrid working
  • Almost half of SMEs are expecting their demand for legal advice to increase
  • The need for Brexit-related legal advice will be here for a while

2. INTRODUCTION


  • Report coverage

3. LEGAL MATTERS ARISING FOR SMES


  • Minority are dealing with legal issues very frequently
  • Almost half are expecting to see their demands for legal advice to increase
  • Employment and redundancies after COVID lead future demand

4. LEGAL ADVICE AREAS


  • Employment law leads the way for legal advice

5. SOURCES USED FOR LEGAL ADVICE


  • Solicitors/law firms main sources used but 14 other sources are also options
  • Various approaches used when procuring legal services
  • Over a quarter have embedded external legal professionals into their business

6. USE OF SOLICITORS AND LAW FIRMS


  • Most using law firms and solicitors are regular users of these advice sources
  • Over three-quarters use same law firm/solicitor for a range of legal advice
  • Most service features are rated as good or better
  • Top quality indicators - experience/reputation, understanding of business sector

7. PAYING FOR LEGAL ADVICE


  • Hourly fees for legal advice still important for SME users
  • 8 out of 10 SMEs would prefer a fixed fee option but other options also popular

8. CONSULTATIONS DURING THE PANDEMIC


  • Half involved in a video consultation during the pandemic
  • Large majority comfortable with video consultations

9. LEGAL/OTHER SERVICES OPTIONS AND PUBLISHED PRICES


10. SMES AFTER BREXIT AND COVID


  • Flexible working for most after COVID but redundancies for a majority of SMEs
  • Brexit increases demand for legal advice both in the short and long run

List of Figures
Figure 1 Demographic breakdown of survey sample (%)
Figure 2 Frequency of legal issues for SMEs (Base - 383 replies)
Figure 3 Changes in demand for legal advice in next 18 months (Base - 383 replies)
Figure 4 Areas of legal advice needed
Figure 5 Sources used for legal advice - first contact and other contacts
Figure 6 Procurement methods for legal advice services
Figure 7 Use of various legal advice services by SMEs
Figure 8 Frequency of use of law firms/solicitors by SMEs
Figure 9 Use of law firms and solicitors for specific legal matters and client feedback
Figure 10 Client satisfaction with any legal advisor used
Figure 11 Criteria considered important when choosing a legal representative (score from 1 to 5)
Figure 12 Fee models used for legal advice
Figure 13 Fee models preferred for legal advice
Figure 14 Consultation methods during the pandemic
Figure 15 Consultations during the pandemic - consumer agreement with statements (%)
Figure 16 Legal services delivery, professional services provision - consumer agreement with statements (%)
Figure 17 SME employment and work models after COVID
Figure 18 Brexit’s impact on legal issues for SMEs