The Legal Profession: Views from Small Business Owner-Operators

By Ireland, R. Duane; Fowler, Joe W. et al. | Journal of Small Business Management, January 1985 | Go to article overview

The Legal Profession: Views from Small Business Owner-Operators


Ireland, R. Duane, Fowler, Joe W., Nord, G. Daryl, Journal of Small Business Management


Establishing and operating a small business is not easy, but professional help is available to small business operators. Accountants, site location analysts, financial experts, and lawyers are among those who can provide useful advice. The research reported in this article explores the nature and extent of interactions between members of the legal profession and Oklahoma small business firms. Data were compared with results of a similar study conducted in Connecticut.

An attorney's services can be valuable to small business operators in many ways. For example, legal advice is needed not only when a business is involved in litigation, but also when selecting the business organization's form (e.g., a sole propertorship or a partnership). when engaging in real estate transactions, and when conducting complicated contract negotiations.

The degree of satisfaction which small business clients derive from interactions with attorneys depends in part on mutual trust and confidence. The client must trust the lawyer's expertise and discretion, and the lawyer needs to feel sure that the client has provided all of the information that is necessary and relevant to solve the problem at hand.

Despite potential benefits of establishing an ongoing relationship with a lawyer, some people have unfavorable impressions of the legal profession and its practitioners. If small business operators share this perspective, they may be neglecting a valuable resource. It has been implied, for example, that there is a link between profitability and use of legal services, but this supposition has not been examined empirically. Identification of the kinds of legal services sought by small business owner/operators is a first step in the study of the contribution of the legal profession to small business. Only one researcher has attempted such an investigation at the time of this writing. One purpose of the current research is to enlarge upon this previous work. Taken together, the results of the two studies may suggest ways of conducting further research to determine whether a link does, in fact, exist between use of legal advice and business success or profits.

In addition to establishing the groundwork for future research, the objectives of this study were to identify (1) owner perceptions of major business problems; (2) the degree of trust and confidence which small business operators have in the legal profession; (3) types of problems for which they seek legal services; and (4) their satisfaction with legal services received. The study was conducted in Oklahoma; results are compared with those of Davies, whose sample consisted of business owner/operators in Connecticut.

METHOD

Davies surveyed members of the Connecticut Small Business Federation by means of a mail Questionnaire. The authors used the same questionnaire, which assesses owner perceptions of major business problems, confidence in attorneys, use of legal services, and the types of problems for which legal services were sought. The National Federation of Independent Business agreed to provide address labels for 1,500 randomly selected members of the Oklahoma NFIB (total membership 12,000). The questionnaire was mailed to this sample, together with a cover letter explaining that the aim of the study was to discover how small business persons perceived the ability of the legal profession to assist with various problems. Of the total mailing of 1,500 questionnaires, 488 were returned, a response rate of 32.5 percent. This response rate compares favorably with that reported by Davies (20 percent). The Statistical Package for the Social Sciences (SPSS) subprogram CROSSTABS was used to generate two-way cross-tabulation tables. Frequency tabulations of all items and chi-square analysis of selected items were conducted, along with the cross-tabulations necessary for comparative analysis. The data were partitioned, compared, and analyzed by the following firm characteristics, in association with each variable on the survey instrument: form of business, industry type, firm size (as measured by annual sales volume and number of employees), and number of years in business.

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