Lawyers? Small businesses still prefer advice from accountants

Lawyers are still failing to persuade the small business community they are anything but a risk, the Conservative Party conference has heard.

Martin McTague, policy director for the Federation of Small Businesses, said most of his members would prefer to fall back on self-help, advice from friends or even an accountant for legal support, rather than a lawyer.

Speaking at a conference fringe meeting on access to justice, McTague said there is a mismatch between lawyers and their clients, with small businesses feeling unable to approach law firms because they do not understand the process.

‘The legal services market is basically broken,’ he said. ‘There is a clear knowledge gap when you talk to a lot of our members. They are not clear when you go from a commercial issue to a legal dispute and they resist having to cross that boundary.’

He added: ‘There is a lot of fear about the legal profession. It is something to be avoided. It is all about risk and not knowing what price you are going to end up paying – there is a real sense they are stepping into a minefield of issues.’

McTague conceded that City businesses have negotiated fee reductions with their lawyers, but said this fee pressure had not trickled down to small and medium sized companies.

His views echo the FSB’s response 18 months ago to the Competition and Markets Authority, which was then studying the legal services market for a report published in December.

The Solicitors Regulation Authority responded to the report last week with a proposal to mandate law firms to publish prices on their website, in a move intended to access unmet legal demand from individuals and smaller businesses.

Speaking at the same event as McTague, SRA executive director Richard Collins said the regulator expected opposition to the plans from sections of the legal profession. ‘There remains a massive reticence [to publish information],’ said Collins. ‘There is a huge unwillingness to share with the public what services can be provided and what they might cost.

‘We will do more over the coming period to work with the profession to be much more open and to provide information to third parties so they might set up comparison sites.’