Legal Insights: Small Business' Use of Legal Services - Priori

Legal Insights: Small Business' Use of Legal Services

By Alexandra McKinney

Priori Legal conducted a survey of over 100 small business owners to understand how they use legal services from search and selection to ongoing usage. A full version of the report is available here.

Everyone knows that the small business sector is vital to the American economy. In January, President Obama reiterated this sentiment, stating small businesses were “the lifeblood of our economy” as they’ve created most of the nation’s new jobs and have led the revival of the economy. Statistics support his claim. Since the mid-1980s, the number of small businesses in the U.S. has increased 49% and those businesses have added over eight million jobs in the past ten years alone.

Yet there is surprisingly little data about small business use of legal services. Since Priori launched in September 2013, we’ve had a rare glimpse into how hundreds of small businesses are using legal services. When an entrepreneur comes to Priori, they briefly describe their legal issue and Priori hand-selects 3-5 lawyers from our vetted network who can help. While all lawyers offer a 25% discount off their usual rates through Priori, their usual hourly rates run a wide range, from $75-$650 per hour. One trend we’ve seen in our own client-base is that only 20% of clients choose the least expensive lawyer. On the other hand, a recent Wall Street Journal study found that nearly 75% of businesses surveyed said they would be less likely to use a “pedigreed” firm for high-stakes matters if they could save 30% on their total bill.

Taken together this suggests when small businesses use legal services they look for value: top lawyers at reasonable and transparent prices. In February 2014, Priori conducted its own survey of owners and managers of small to medium sized businesses. The survey was constructed to comprehensively examine the ways smaller businesses seek and use legal services.

Small Business Legal Advice | Findings & Insights:

Searching Online for Small Business Legal Advice

Findings: When presented with a pressing legal question, 61.3% of small businesses report searching online for information on online forums, websites, or message boards.

What It Means: The majority of business owners look to the Internet for insight into their legal needs. Even if most businesses don’t go online with the intention of finding a lawyer (more on that below), the very fact that they are searching online in the first place offers a tremendous opportunity for entrepreneurial small business attorneys to attract and capture this clientele.

Finding a Small Business Attorney

Findings: In searching for a small business attorney look to the following top 5 sources of information:

  1. Friends or family members who are lawyers (44.3%)
  2. Friends or family members who are not lawyers (42.5%)
  3. Colleagues or business acquaintances who are not lawyers (34.0%)
  4. Colleagues or business acquaintances who are lawyers (32.1%)
  5. Finally, search for a lawyer online (21.7%)

And of the 21.7% of business owners who searched for a lawyer online, only 20.6% hired a lawyer—meaning that only 4.47% of those surveyed have hired a lawyer online.

What It Means: There is ample room for growth. Even though small business owners are searching for legal advice online, that usually does not translate into actually hiring a lawyer online. Overwhelmingly, the survey identified that small businesses searched for their lawyers using recommendations from their personal and professional networks. But change is happening. As lawyers promulgate more high-quality content online, social tools allow friends and colleagues to recommend lawyers through online channels, companies like Priori build vetted communities, and consumers grow more comfortable finding all sorts of services online, online searchers may see more they like online and be more inclined to actually hire a lawyer.

What Matters in Finding a Lawyer

Findings: The three most important factors in small businesses’ decisions to hire a lawyer were that the lawyer was highly recommended by others (74.5% listed as a top 3 factor), had experience dealing with the small business owner’s specific legal problem (67.0% listed as a top 3 factor), and had experience in the small business owner’s industry (63.2% listed as a top 3 factor).

What It Means: Even though many small business owners do not have large legal budgets, these findings suggest that when they are dealing with legal problems, they prioritize a lawyer’s skills and experience over cost-savings. The first generation of legal services online focused on offering deeply discounted pricing. As services like Priori start to aim at a more sophisticated audience and vet for quality, more business owners will likely come online to search for lawyers.

Our survey found that small businesses are continuing to gain confidence in looking to technology for finding lawyers and finding legal advice. They want lawyers who are skilled experts and can advise them over the lifecycle of their business. And while they’re gaining comfort working through online channels, trust is still the most important factor. This is an opportunity for lawyers (and for services like Priori) to create high-quality content, so small businesses get the best of all worlds: efficient technology-enabled service leading to lower prices while maintaining high-quality. Based upon what we see with our clients at Priori, these are all trends we expect to continue in the next year.


Priori Legal distributed this survey to a pool of online survey respondents who “owned or managed a small to medium business." The survey yielded 120 completed responses. The responses were scrubbed to exclude respondents who failed to indicate that they owned a small to medium business in the screening question. In addition, respondents who clearly did not own a small to medium business based on their answers to the subsequent questions or who answered these questions so inconsistently that the validity of the response was questionable were removed. After scrubbing the data, 106 valid responses remained for analysis.


Photo Credit: Joe Gratz via Compfight cc

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