Small businesses would rather turn to their accountant than risk high costs of using legal professionals, Federation of Small Businesses says
SMALL BUSINESSES would prefer to sort legal issues out themselves or turn to a trusted accountant rather than use formal legal services, according the Federation of Small Businesses.
In a response to an ongoing Competition and Markets Authority study of the legal services market, the FSB noted that perceptions around the high costs of engaging legal professionals and the open-ended nature of legal proceedings often played into the hands of accountants.
Because of the high cost of legal services compared to the value of the issue at stake lawyers are seen as a last resort option for small businesses after first seeking self-help solutions or using accountants, the FSB said. Many small businesses, like consumers, consider the cost of legal services to be high and so value for money is low, and too often simply an ‘opinion’ which in the end can only be tested in court.
The existing relationship between businesses and their accountants also plays a role, the FSB found. Their deeper knowledge of the business’s situation can help find the most appropriate course of action.
“[Accountants] might be trusted because of their expertise and existing relationship with the small business and can help the small business find the best option in what is a difficult to navigate sector,” the FSB wrote in its response. “They by-pass the need for the business to search the market for providers because they have options readily available. They rationalise some of the available market information into a form understandable and usable by a small business, which then enables them to make a more informed (if not fully informed) choice.”