Many small businesses struggle to access legal help
36% of small businesses face legal challenges, but many struggle to access help—leaving issues unresolved and hindering growth, according to LSB survey data.
A survey by the Legal Services Board (LSB) shows that small businesses encountering legal problems often fail to receive adequate support, leaving unresolved issues that hinder growth. The study, based on responses from 10,352 businesses, found that 36% faced at least one legal challenge in the past year, with nearly one in five reporting these issues delayed or blocked investment. A legal need, defined as a situation where the perceived seriousness exceeded the business’s capability to resolve it without professional help, was experienced by 11% of businesses. Of these, only two in 10 received assistance.
Businesses tend to address legal problems independently before seeking external help. When they do reach out, they rely more on informal sources than formal legal advice. 24% consulted independent advisers, often turning first to accountants (26%) or tax specialists (21%), while 18% spoke with solicitors. Not-for-profit groups like chambers of commerce were contacted by 16%, and 10% sought guidance from other regulated legal professionals. Only 6% used AI tools such as ChatGPT for support. The data also shows an increase in businesses actively comparing different advice options, a change from findings in 2021.
Legal capability, the ability to manage legal risks effectively, emerges as a critical factor in business success, comparable in importance to financial or digital skills. However, only 10% of small businesses have any internal legal resources. The LSB proposes integrating legal awareness into existing business support structures, such as startup programs, Growth Hubs, or accountancy services, to bridge this gap.
Businesses with higher legal confidence are more likely to seek help early and achieve better results. The LSB’s report stresses that improving access to justice requires more than simply expanding legal services. It also demands that businesses can recognize their legal needs, obtain reliable information, and efficiently handle support systems. Without these improvements, legal challenges, though common, will continue to impede investment, productivity, and overall growth.
