Small businesses are often reluctant to employ lawyers due to perceptions of high fees, confusing terminology and poor communication. But a failure to seek legal advice is costing SMEs £13.6bn a year in additional costs to sort out disputes and subsequent legal complications, according to a YouGov survey.
The survey found that SMEs face an average of eight legal issues every year, with incidents being particularly high in the food, finance, insurance and property sectors. The majority of business owners accepted that using the services of a lawyer could reduce risk and overall costs but were still resistant to do so, citing concerns over complex documentation and poor value for money. So how can you protect your business and save money on legal fees?
Identify the risks
If you have limited resources for legal fees it is crucial to identify which areas are the most important to safeguard. This will involve a consideration of how likely it is that a problem will occur, along with an estimate of the likely cost or impact of such a problem. Spend your money on the areas that are business critical. Ownership documentation and contracts are likely to be high on the list of matters to prioritise.
When it comes to legal matters, it rarely pays to put things off. If you are going to spend money on legal services, do so as early as possible before issues arise. If a problem does occur, never ignore it. A dispute with a supplier, customer or employee will only escalate if not faced head-on. Grasp the nettle and work to find a resolution. Doing so will often means it never becomes a matter for the lawyers, saving you time and money.
Legal fees quickly escalate if a dispute gets to court, but there are alternatives. Conciliation is often the first step and involves a trained conciliator helping both parties find a solution they can agree too. Mediation can be a similar process to conciliation or can be more formal and involved. A further step is arbitration that normally involves an independent arbitrator considering evidence and making a decision that can be legally binding. There are costs involved with all these forms of alternative dispute resolution, but they are normally much quicker and cheaper than court proceedings. A dispute with a supplier, customer or employee will only escalate if not faced head-on.
Look beyond the local
Small businesses have traditionally used local law firms, but with electronic signing of forms and a range of digital communication this is no longer necessary. There may be a specialist law firm whose economies of scale mean they can offer a better value service, or perhaps they are based in a part of the country with lower costs that they can pass on to you. Shop around and don’t limit yourself geographically.
Let the tech take the strain
There are more than 100,000 lawyers working for practices throughout the UK. The challenge is to find the one who will offer you the level of service, expertise and fees to suit your business and budget. Recent advances in technology have made this process much easier. LawBid acts as marketplace where you can post your requirements and law firms can get in touch with a quote and an explanation of how they can help. Access to so many lawyers has significantly shifted the balance of power towards the client with increased choice driving down costs.
When you find yourself needing legal advice for your business, visit lawbid.co.uk to post your legal requirements and receive competitive quotes from specialist solicitors nationwide.