News and Media Research Centre
University of Canberra
Building 9, Level C, Room 10
10/09/2024 |
Faculty of Business, Government and Law
Legal lifeline for local businesses
Canberra's small businesses are vital to our economy and innovation. According to public data, they account for 32.7% of Australia’s gross domestic profit and employ 42% of Australia’s workforce (Australian Bureau of Statistics, 2022), despite 97.5% of businesses in Australia employing less than 19 people (Australian Small Business and Family Enterprise Ombudsman, 2022). The small business sector is growing, too: up by 15% during the 2021 financial year and 3% in the 2022 financial year.
Small businesses are sources of innovation, culture and connection in our local community: developing and offering unique products and services, sponsoring community groups and initiatives, hosting local talent at their venues, employing local people. All these things and more contribute to the vibrancy and diversity of local communities and economies, but, unfortunately, it is much harder to survive as a small business.
Challenges facing small businesses
Small businesses face varied and significant challenges and are more vulnerable to threats than larger businesses. Their vulnerability takes several forms:
- Economic vulnerability: small business owners usually earn incomes below the average Australian wage, and their employees are typically paid less than half the wage of someone working at a large business. Their cash flow can be severely impacted by late invoice payments and fluctuations in demand. Economic uncertainty, such as inflation, significantly impacts small businesses. The survival of small businesses is much lower than those of larger ones, and there is often a form of personal economic risk to the director(s) of a small business.
- Complexity of the law: laws and industry standards govern every business sector and the details and interpretation of them can be difficult to understand and can exist at both Federal and State/Territory levels. Access to expert advice and services comes at significant costs.
- Lack of expert knowledge: expert knowledge can be limited due to the small number of employees. Staff often “wear multiple hats”: salesperson, human resources manager, payroll officer and finance manager, product developer, website manager, IT support and cyber security, social media content producer, CEO and more. Also, small business is more likely than larger business to be in regional areas, where access to professional expertise can be challenging.
The Small Business Legal Advice Clinic
A UC researcher’s understanding of this complex landscape built the case for an effective low-cost or pro-bono legal service in our community for small business operators and led to a partnership between the University and Legal Aid ACT. The Small Business Legal Advice Clinic was established in 2014 and sees between four and six small business clients each week, providing free legal advice on leases, employment contracts, debts, closing or winding down a small business, and general regulations for small business operators.
The Clinic also sees between five and ten UC law students assisting solicitors volunteering through Legal Aid ACT in advising small business clients. The practical experience helps develop the students’ ethical awareness and soft skills like communication with clients, enhances their real-world problem-solving skills and encourages students to think more broadly about access to justice issues.
Between 2014 and 2024, the Clinic provided over 1,000 consultations and involved over 100 UC law students who have then graduated as qualified legal professionals.
In the case of the Small Business Legal Advice Clinic, it was a UC researcher’s understanding, work and teaching in law that led to a practical service to be delivered in partnership with industry for our community. Access to the Clinic has assisted small business operators navigate some of the legal challenges they face, reduced financial strain, and built the resilience of these businesses so they may continue to operate in our community.
When legal needs are unmet, issues can escalate, ultimately costing the business and public more. Offering expert legal advice can prevent unresolved issues from escalating, and resolving issues reduces litigation and additional economic costs. Legal issues can also have broader impacts on business operators, such as stress-related illness, relationship breakdowns, and financial strain. Offering access to expert advice can help mitigate impacts on the mental and physical health of small business operators.
Learn more and enquire about the Small Business Legal Advice Clinic on Legal Aid ACT’s website or contact the Legal Aid Helpline on 1300 654 314.
Researcher
The Small Business Legal Advice Clinic was established by Professor Maree Sainsbury from Canberra Law School in the Faculty of Business, Government and Law, in partnership with Legal Aid ACT.
Learn more
‘Legal assistance for local small businesses’ (The RiotACT, 2014)
Program leader for UC, Professor Maree Sainsbury, received the Pro Bono Service Award at the ACT Law Awards in 2021 for establishing the Small Business Legal Advice Clinic.
More information on the Small Business Legal Advice Clinic can be found on Legal Aid ACT’s website.
