A recent study by LegalShield reveals that many small businesses are facing serious financial setbacks due to avoidable legal issues—yet most still avoid hiring legal counsel.
The report, released in recognition of National Small Business Month, shows that nearly 1 in 5 small businesses lost over $5,000 last year because of preventable legal troubles. Additionally, 47% reported losses of at least $500, while 40% missed new business opportunities due to fear or uncertainty around legal matters.
Despite these challenges, 60% of small business owners said they avoided hiring a lawyer, citing concerns about cost and complexity. The reluctance to seek legal help stems from outdated beliefs that are costing businesses both time and money, according to LegalShield.
The findings also reveal that 83% of small business owners believe affordable legal services are vital, yet 61% worry about unintentionally breaking laws or regulations. Alarmingly, 25% have considered closing their business due to legal stress, and over one in four spend 3–5 hours weekly addressing legal tasks.
“Waiting until you’re in legal trouble is like ignoring health problems until surgery is needed,” said Michael Fiffik, a LegalShield provider attorney. “Proactively working with an attorney helps businesses avoid fines, navigate contracts, and stay compliant.”
Warren Schlichting, CEO of LegalShield, emphasized the hidden costs: “Every hour spent dealing with legal issues is time taken from running and growing a business. Legal services should be easy, accessible, and affordable.”
The study surveyed 299 small business owners and managers across the U.S. as of April 5, 2025, with participants from diverse age groups and regions, ensuring a representative sample.
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News Source: Finance.yahoo.com
