The un-met need the legal market must address

16 Aug 2013

In April this year, the Legal Services Board published research that should have sent shockwaves through the industry.

Focusing on small businesses, the In Need of Advice? research paper had some stark warnings for the legal industry’s relationship with what could, and arguably should, be a core area of business interest.

Of 9,703 small businesses surveyed, 38% had a legal issue of some form or another over a 12 month period. Of this figure, only 29% of small businesses sought formal independent help. Of this second figure, just 32% sought that legal help from a solicitor.

That adds up to the fact that, out of a core focus group – over 3,500 small businesses with a legal problem – the legal market managed to attract just 342 companies.

Currently the legal industry is engaging in business dealings with less than 10% of small businesses with a legal issue.

Perhaps some in the legal market consider businesses this small (some surveyed were sole traders) to not be their core market. In some cases, I would agree. Some firms are just not setup to deal with the types of legal queries that would arise from these sorts of companies.

But then, if they are not currently setup to deal with them, why is this? The report estimates that the legal problems it discusses were worth some £100 billion per annum in lost revenue to the companies involved. If that is not a market worth chasing, whether firms are currently setup to do so or not, then I do not know what is.

Whilst the report then has much to say about the potential market, it also has something to say about the state of firm’s current interactions with these clients. 35% of the small businesses who experienced legal problems and sought professional advice from someone who wasn’t a solicitor, turned to an accountant (21%), a trade body (9%) or a HR consultant (5%) respectively.

In many cases, the businesses turned to these individuals or organisations because they were often in contact with them anyway. The fact that solicitors still top this list at 32% might be seen as a success but with 21% going to their accountant regarding a legal matter, it seems to me as though the list actually speaks of a failing in communication between the legal industry and their potential clients.

To back this up, the LSB created a ‘word cloud’ of frequently used phrases by the small businesses surveyed. Pleasantly, this features prominent use of the words ‘professional’, ‘knowledgeable’, ‘qualified’ and ‘experienced’. Unfortunately it also prominently features the words ‘expensive’, ‘high fees’, ‘jargon’ and ‘self-interested’.

This suggests to me two things, around the topic of communication;

1) There is an issue with products and positioning: you are not selling what they want or are selling it in the wrong way.
2) There is a degree of lack of trust.

For those interested in a piece of the small business market – and I would suggest that many of you should be – solving these two issues must be at the core of your offering.

The LSB survey then, suggests that there is a huge un-met need in the small business market, a potential for firms to grow in this area and a tangible amount of revenue available for those who wish to do so. Addressing this area is not just an option for firms who wish to grow in a newly competitive market, it is a necessity.

Philip Jepson picture By Philip Jepson. Phil is the Chairman of Jepson Holt Ltd., which he established in 2004. His main focus in the business is helping law firms grow their businesses and lawyers develop their careers. You can find him on , Twitter & LinkedIn.