Does legal education impact on how small businesses see the world?

There are some interesting findings on attitudes risk and the incidence of legal problems in small businesses in the new study done by my colleagues Pascoe Pleasence and Nigel Balmer for the Legal Services Board. That study has drawn attention principally because it suggests a large latent market for legal problems. Small businesses have a large volume of legal problems which are not tackled with the assistance of legal advice. The median value of such problems was of the order of £1,2000 (though the mean value was much higher). Interestingly, also, whilst solicitors dominate service to this sector, accountants appear close behind.

The findings that particularly caught my eye were of a different kind though were about attitudes to risk. The following table summarises their data on their risk indicators. Interesting more respondents (and it is a very large sample) took the view that law and regulation provides a fair environment for business than did not (although the differences are not large) and a strong majority saw legal processes as essential to enforcement of their rights. The latter is interesting at a time when court fees are being increased. The stronger sentiment is also that lawyers are not seen as a cost effective means of resolving legal issues (although an interestingly large minority are unsure on this and those who have used lawyers appear less likely to say this than those who have not). Shortcuts appear not to garner support in competition terms. Interestingly, the importance of compliance with the spirit of the law splits views:

Because the data is available on the LSB website I did some quick analysis of the different attitudes of those who were lawyers or had legal training who responded to the survey. There were 301 who described themselves as “qualified lawyers or had had training to deal with legal issues”. As a shorthand, I am going to call this group the lawyers. The lawyers were more likely to agree a business can’t get ahead without taking risks (79% to 71%). Slightly less likely to agree overall that product or service quality was more important than profit margin (79% to 85%). They were more likely to agree being competitive involved taking shortcuts (27% to 13%). They were more inclined to agree that law and regulation provide a fair environment for business to succeed (47% to 33%). They were more inclined to agree that it was more important to comply with the spirit than the letter of the law (41% to 29%) and more inclined to agree legal processes are essential to enforce businesses rights (65% to 57%). Similarly, they were more inclined to agree lawyers provide a cost effective means to resolves disputes (40% to 16%).

There is an intuitive sense to this: those with legal training or qualification were more prone to see commerciality as necessitating risk and corner cutting and more responsive to the concerns of the law (although being responsive to the spirit rather than the letter of the law can have two different meanings). As they tended to work in (slightly) larger organisations, this may be as much a reflection of their organisations as it is of the impact of legal training. Also we do not know precisely what the nature of legal qualification or training the respondents had. Nevertheless, it is an interesting indication that legal training might have some impact on how people see the world once they are within it.