Not all lawyers… is the legal system inefficient and self-serving?

By Nick Harvey, Managing Partner

There’s a lot to unpack in the most recent Legal Services Board ‘Small Business Legal Needs’ report, which surveyed 10,228 businesses across England and Wales. 

In part one of my analysis of the report, I wrote about there being an issue with a ‘last job mentality’ in the legal system. 

The other most concerning issue that struck me whilst reading the report is the fundamental lack of faith with lawyers and the legal system itself. Seeing the statistics about our industry presented so starkly is disheartening to say the least. 

• Just 10% view lawyers as cost-effective, while more than nine in ten view law ‘as a game in which the skilful and resourceful are more likely to get what they want’. 
• 85% of respondents agreed with the statement that ‘taking a case to court is generally more trouble than it’s worth’.
• 20% of small businesses surveyed have low legal confidence, and do not feel confident in reaching a fair and positive outcome when dealing with legal scenarios.

Who do businesses turn to when things go sour? Lawyers aren’t even at the top of this list – with accountants being the most commonly used source of help (22%), followed by solicitor’s firms (16%) and then independent not-for-profit advice organisations such as the Chamber of Commerce, Citizens Advice Bureau etc (10%). 

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How do we restore faith in the legal system? 

Certainly, this is a broad, overarching issue that I cannot possibly attempt to address with one blog post – but I can at least try to offer some solutions on how our industry can help itself.

Some of these sentiments are entirely understandable – lawyers charge by the hour and some law firms (not all – I hasten to add) have no problem in racking up bills before a case has even got off the ground. 

All too often clients find out the hard way that they don’t have a legal leg to stand on, despite spending thousands in fees. Or a case is dragged out for so long that by the time it limps into court, both parties are exhausted or have run out of cash to finance it.

Unscrupulous firms such as these tarnish the reputation of the legal industry as a whole. When unknown time and cost is at stake, it breeds a complete lack of trust in the system.

The Legal Services Board report also details how the experience and outcomes of small businesses improve when they have high legal confidence. They are more likely to shop around for legal support, more likely to seek help from an independent adviser or support service, and more likely to receive an outcome in their favour. 

Everybody wins when businesses are more informed about their options and what legal help is available.

 

Is there another way?

What if the costs could be controlled more? And a realistic timeline given for resolving an issue?

It’s for this reason that we cap our fees at 30% of the total recovered. This gives our client an element of control back – they also know that they won’t be billed for anything in the unlikely event that we lose a case.

We do this by backing cases that we’re confident that we can win, and take a portfolio approach to cases. Most often these are referred to us through our network of the top accountancy firms in the UK. 

We also focus heavily on mediation (known as ADR) so that most of the disputes we deal with are settled long before ever reaching a courtroom. This is usually when costs start to spiral in the traditional legal system.

Escalate acts as the lawyer, funder and insurer all in one – so decision making and deal making is far easier and faster, as there is only one stakeholder. 

As for timelines, our target is to settle all cases within 12 months, maximum. The backlog of cases has worsened since Covid, resulting in the average wait times for cases to reach court increasing to all-time highs of over 51 weeks for small claims, and 75.5 weeks for multi/fast track claims. 

This is why we always aim to avoid the courts, and settle before then, but our clients also have peace of mind that their case will be fully funded all the way to the High Court if necessary. 

We have a stack of successful case studies to back up our belief that the system can work more efficiently and diligently for SMEs. Ultimately, the lack of faith in our profession is concerning, and we can do so much better than the current status quo. 

If you or your business has a dispute but you do not have the funds to take it forward or do not want to be exposed to unknown financial risk, please get in touch to find out how we can help you.