Small businesses’ unmet legal needs present a big opportunity for developers of IT to deliver legal services, according to research released by a government-backed technology initiative. The study, carried out for LawtechUK and the Legal Services Board suggests that many small and medium-sized enterprises do not know when or whether to involve lawyers – and some do not recognise when they have a legal problem.

Other conclusions included that, 'across the board, SMEs are frustrated that getting legal issues resolved can be costly and time-consuming'. Businesses 'are looking for solutions that are good value for money, won’t take up too much of their time, and that provide reassurance'. 

Business people working on laptop

Many SMEs do not know when or whether to involve lawyers

Source: iStock

The study involved questioning 40 SMEs from different sectors, including 10 which had previously used lawtech. It found that most SMEs can see a role for lawtech, particularly for finding a legal service provider in the marketplace and preparing legal documents.

The LawtechUK initiative, which has received £2m in government funding, has already identified small business as an opportunity. Its Lawtech UK Report 2021 published earlier this year concluded that UK SMEs could make cost savings of up to £8.6bn each year by using lawtech products and services. 

Meanwhile the Legal Services Board - which sees technology as key to its mission 'to reshape legal services' - estimates that only a quarter of small businesses obtain professional help to deal with legal issues, while half try to handle them alone. Only one in 10 small business owners view lawyers as cost-effective.

Jenifer Swallow, LawtechUK director, said that lawtech could give small businesses access to legal support 'that is timely, affordable, convenient and reassuring'. This does not necessarily involve doing away with human lawyers: 'The debate is often framed around technology replacing existing services,' she said, 'but our research shows that lawtech offers new opportunities for legal service providers to meet the unmet needs of SMEs and make many people’s lives easier in the process.'