A National Small Business Poll on "The Use of Lawyers" was conducted in May - June of 2005 by the National Federation of Independent Businesses (NFIB). The survey reflects the feelings of over 750 small business employers about their legal services.
As a lawyer, if you serve or want to serve this sector, understanding them as a market and understanding their needs and typical use of legal services will be very helpful.
If you're a CPA, perhaps after reading the following, you will be more inclined to network with your local attorneys.
Over the next days, I'll report what I consider to be much more interesting details (such as the surprisingly high number of customers who paid flat fees for their legal services!!), but in the meantime, here is the executive summary of the survey and a link to it if you are a data hound.
> 69% of small business owners say that they have trust and confidence in lawyers and the legal profession compared to 31% who do not.
> Most small-business owners use lawyers: 65% of small employers (defined as employing 5 to 250 people) sought advice or other assistance from a lawyer in the last year. The figure rises to 78% when the reference period is the last three years.
> Median legal expenses, of those who incurred them in the last year, were between $4,000 and $5,000. However, 10% or respondents incurred expenses of $25,000 or more. Legal costs in the last year appear to be atypically high.
> 78% percent claim to have an on-going relationship with a lawyer or law firm. Those relationships appear reasonably stable over time.
> Just 13% changed their primary lawyer/law firm in the last three years. The most frequently cited reason for changing is the need for expertise followed by a lack of legal competence.
> 55% of those who consulted a lawyer in the last year sought preparation of one or more legal documents. Most frequently: letter(s), contract(s), and papers to file, or response to, an actual or potential law suit.
> 41% of those seeking a lawyer’s help (or over one in four in the population) were involved in at least one legal dispute during the last three years. The median number of disputes involved in was between one and two.
> Overwhelmingly, most disputes are resolved informally out-of-court. Only 12% of legal disputes between small-business owners and other parties are resolved in court.
> The most frequent topics for legal disputes are debtor/creditor relations and/or debt collection (21%), and contracts (19%). The most frequent party to these disputes are customers (47%) followed by suppliers (25%).
> The median total legal cost to settle a dispute is about $5,000. Two-thirds of resolved disputes result in no money or anything of monetary value exchanging hands.
Many thanks to Anita Campbell of the Small Business Trends blog for posting about this survey. Anita's post is one of reassurance to attorneys that a majority of small businesses are, in fact, happy with their legal services despite general population surveys (such as the ABA's) that show less positive perceptions.