SMEs are facing at least 8 legal issues costing them billions each year. According to the latest YouGov survey, SMEs are having to spend £13.6bn each year in legal fees, which broken down to per hour, totals £7 million. This means SMEs are facing on average at least 8 legal issues each year because of neglected their legal side of the business.
The survey was sent to SMEs within 20 sectors and studied by Cebr (Centre for Economics and Business Research).
It found the most popular legal issues dealt with by SMEs were;
13.2% – Disputes
12.5% – Employees and Key Contractors
11.4% – Customers and Suppliers
9.2% – Terms and Conditions
9.1% – Software
The costs are high within;
£1.7bn – Disputes
£1.6bn – Employees and Key Contractors
£1.6bn – Customers and Suppliers
Regardless of the significant money spent on fixing legal issues, SMEs are generally overly optimistic, in fact of those who were surveyed, just 12% believe it is ‘likely to pose a significant risk’ to their enterprise. On the other hand, when asked if these costs would damage other businesses opposed to their own 25% responded.
Chairman of LawBite, Clive Rich comments;
“SMEs wrongly assume that risky outcomes are more likely to happen to other businesses than to themselves.”
A potential cause for the significant losses SMEs are dealing with is their hesitance to use lawyers when issues arise. The survey exposed that SMEs feel at unease when dealing with law firms. Out of those surveyed, just 8% believe that legal fees are a good value for money. And only one fifth of SMEs surveyed describe law firms as ‘good’ when easy access was a factor while 70% expressed legal is not easy and hard to understand.