Seeking legal advice in the UK can be a costly and time-consuming process for small businesses. So much so, that it has become something of a last resort.
The rising cost of accessing justice are pressuring businesses to consider private sector financing solutions.
In fact, a recent report by Deloitte showed that in 2015 around 55% of UK small businesses and individuals had a legal matter worth pursuing – but only 20% went ahead and sought the required legal support.
Research has shown that 38% of small businesses experienced significant legal problems last year, with an average cost of £7,000. That can be enough to impact running costs and in some cases can mean the difference between remaining afloat or not.
To make matters worse, those businesses who can afford legal support are not overly enamoured by the quality of services they receive, with only a small number of businesses feeling they get value for money from their chosen legal service provider.
It is inevitable that every business will require some legal advice or representation at some stage. In a perfect world, it would be smooth sailing all the way – but who lives in a perfect world?
In order to strive forward and flourish, what is really needed is quick, simple advice and the funds in place to clear any hurdles that stand in the way.
The legal industry has changed a lot over the past few years – adapting to the demands of small businesses – and there is light at the end of the tunnel.
London-based legal support business Legal Cost Finance may not have ridden in on a white charger, but for many businesses, that’s exactly what it means.
Let’s put things into context a little.
Some £10 billion is the estimated amount of annual losses recorded by the UK’s small businesses due to legal issues.
Read that again. £10 billion! And the cost isn’t only financial, with over 20% of business owners reporting ill-health as a direct result of lengthy and expensive law suits.
Additionally, half of every small business involved in legal action believe they don’t get good value for their money and, as stated earlier, more and more turn to lawyers as a last resort.
With Legal Services Board chairman Sir Michael Pitt claiming that access to affordable and good legal representation is showing no sign of improvement, something has to give.
Let’s return to Legal Cost Finance.
The brainchild of CEO and founder Dr Yuri Rapoport, Legal Cost Finance may have arrived just in the nick of time. Legal Cost Finance uniquely offer finance via ‘payment plans’ to cover the costs involved in all types of legal matters, contentious and non-contentious, which can be repaid over a period of time that suits the business.
It means there is, in effect, a clear path to justice for those who need it most, and it means that all sides are happy. The small business can spread their legal cost payments to suit their budget, while the lawyer knows they will be paid in full and on time.
Dr Rapoport said: “We identified the areas we felt people and businesses were struggling to get access to justice, and provided a solution. We have a range of payment plans available that suit every possible situation – all tailored to suit each case.”
It is not only litigation that costs money – for start-up businesses there is a legal minefield to negate that could be eased with the help of a legal professional, but fear of costs mean that many will opt for DIY methods instead – a choice that often proves more costly in the long run.
Dr Rapoport continued: “There is no situation that we cannot assist with. We’ve created three colour-coded plans to cover all scenarios.
LawPlan Orange, for example, is for small businesses with a preference to spreading their legal costs and requires no large upfront payments ‘on account’ to a lawyer from the businesses own cash reserves. LawPlan Purple is for businesses involved in costly litigation. It eases strain on cash flow by managing unpredictable legal costs. It also offers flexible repayment periods to minimise impact of litigation.”
In fact, The Bar Council were so impressed by Legal Cost Finance, they added them to a select list of their official service partners in 2014.
Unlike ‘litigation funding’, which is limited to contentious legal cases and claims a stake in the proceeds of a case outcome, Legal Cost Finance provides ‘direct financing’ that is not restricted to any particular type of legal matter, is not tied to the chances of success, and is available for all types of legal costs.
So finally, it looks like there is a solution for small businesses facing expensive or unexpected legal bills. Onwards and forwards…