Just one in eight small businesses will turn to a solicitor to solve a legal problem despite many suffering financial loss as a result.

Research published today by the Legal Services Board found only 12% of legal problems resulted in demand for advice from solicitors’ firms. More than of half of respondents opted to handle legal problems on their own.

Just 5% of small businesses had an in-house expert and 8% had legal retainer contracts.

More than 45% of the 9,703 small businesses surveyed in the YouGov poll said legal problems had a tangible effect on their company in loss of income, additional costs or loss of reputation.

Respondents were asked to estimate the monetary value of the adverse consequences of these problems, reporting a median value of £1,200 per problem.

If the value of the adverse consequences of problems is scaled up to the volume of all problems in all UK businesses, it points to a loss to small businesses in excess of £100bn a year.

Chris Kenny, chief executive of the LSB, said the research shows that law firms are missing the opportunity to contribute to growth – and to grow themselves.

‘The findings of this research serve as a wake-up call,’ he said. ‘It isn’t meant to criticise. That would be too easy. Instead it is intended to highlight the gaps that exist and the opportunity they present.’

Kenny (pictured) said the research provided an ‘open window’ to what small businesses want and he urged solicitors to prove that legal advice ‘shouldn’t just be seen as the last port of call’.

Businesses were more likely to make use of the internet in connection with legal problems, going online on 43% of occasions where they had a problem.

The internet was most likely to be used for problems concerning regulation and intellectual property.

Just over half of respondents agreed that legal processes are essential for businesses to enforce their rights, but just 12.6% felt lawyers provide a cost-effective means to resolve legal issues.

Small businesses’ legal problems were mainly with other businesses (48%), with individuals (18%), with government (17%) and with employees (10%).