According to the IRN Legal Services for SMEs Report, which surveyed 383 Small and Medium sized business owners and senior executives, nearly fifty percent of SME businesses are expecting to increase their requirement for legal services and legal advice over the next year and a half. Currently, SME legal advice from law firms is required by one third of small business owners to assist with business legal issues.
“law firms and solicitors are the main source of legal advice but they are only used by a third of SMEs in this survey reflecting the competitive nature of this particular legal advice sector.”
Why is an increase in demand for SME legal advice expected?
Following the pandemic, most businesses will have made changes to how they work. With the end of the furlough scheme coming closer, a large proportion of these businesses will require employment law advice for cutting staff and making redundancies. Unfortunately, more than half of the businesses surveyed within the report stated that they expect to make redundancies in the coming year.
Others will require business legal advice surrounding financial issues changes of contracts and business issues that may arise as the result of new ways of working. As many businesses are now allowing for increased working from home, compliance issues may arise as a result; and therefore, many will seek the advice of solicitors to ensure their new flexible ways of working do not result in legal problems. Compliance issues may include, data protection breaches, cyber security issues, as well as employee safety whilst working from home.
What does this mean for solicitors?
This is positive news for those working within the employment law and commercial law sectors as increased business is to be expected over the next eighteen months. Within the report, it has also been stated that SME’s would prefer more flexible pricing models to pay for their solicitor’s time in completing legal work. Although hourly rates are the most used methods of payment currently, the majority of those surveyed stated that they would prefer other methods, such as fixed fees or retainer contracts.
According to the report, “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.”