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Lawyers making almost $40k a year from SMEs

Adam Zuchetti and Naomi Neilson
Adam Zuchetti and Naomi Neilson
18 September 2019 1 minute readShare

More than half of SMEs say they are contacted by their lawyer far too often, an industry survey by NAB has revealed, which also found SMEs spend an average of almost $40,000 a year on legal services.

The inaugural NAB Australian Legal Services Industry Survey indicated lawyers need to consider whether they are contacting their SME clients too often — particularly in light of the finding that one in three SMEs said they have changed law firms within the past five years.

Some 30 per cent of lawyers said they contact their clients every few days, despite just 6 per cent of SMEs wanting this level of frequency in communication with their lawyer. Most preferred to be contacted once every one to three months.


Nevertheless, lawyers are the second most widely used professional service provider by SMEs.

The results are based on a survey of 750 SMEs and 70 legal service providers Australia-wide.


“It’s not entirely clear what’s driving lawyers to contact their SME customers more frequently than they desire, but it does appear that it’s an interruption to the other parts of running their business that they would, ideally, like to receive,” said Brett Moore, NAB’s customer executive for professional services.

NAB’s findings showed that SMEs are happy to receive emails, and often preferred them to discussions by phone or in person.

Another concern for business operators was how often lawyers seek feedback on their services. Almost 30 per cent of SMEs said their lawyer never sought any feedback, while one in six lawyers admitted the same.

“Feedback can be a gift — even though it can be difficult to hear sometimes,” Mr Moore said.



“It can help lawyers deepen their relationship with existing clients and increase the likelihood they’ll be referred to others.”

Lawyers, SMEs at odds over pricing

Perhaps surprisingly, less than half of the SMEs polled (40 per cent) said that legal fees are too high.

But the way in which they are billed also remains a point of contention.

According to NAB’s report, 40 per cent of SMEs are billed hourly, well above the 25 per cent who prefer this type of price setting from their lawyer.

Fixed-fee options are the preferred option by most SMEs (40 per cent), ahead of value-based billing (17 per cent), a retainer (12 per cent) and other (6 per cent).

That was in stark contrast to what lawyers believe their SME clients actually want. More than two-thirds ranked either “other” options (38 per cent) or hourly billing (34 per cent) as their clients’ preferred pricing method. Just 20 per cent ranked fixed fee ahead of all others.

In total, SMEs are spending an average of $39,000 each year on legal services, the report said.

NAB’s research comes after Adelaide-based employment lawyer Thea Birss told My Business costs are turning off many SME owners from seeking legal advice, instead leading them to navigate Australia’s “absurdly complex” workplace laws on their own, often with devastating results.

Lawyers making almost $40k a year from SMEs
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Adam Zuchetti and Naomi Neilson
Adam Zuchetti and Naomi Neilson

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at [email protected]

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