How We Reached Our Verdict

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This article is the second in a series of special reports on small business and the professions. It summarizes a national study of smaller companies and their attorneys. The primary research for the report, conducted in December 1981 and January 1982, included two mail surveys supplemented by telephone interviews with a cross section of small business executives and practicing attorneys.

A four-page questionnaire was mailed to a random sampling of 4,995 INC. subscribers, followed by a two-page questionnaire sent to a random sampling of 5,008 attorneys. The latter group included more than 4,800 members of the American Bar Association's corporate law section and small business committee.

Excluding undeliverable, incomplete, and late returns, the net subscriber response rate was 22.1%. Some 993 subscriber returns were tabulated by computer to generate 46 cross-reference summaries. The net response from attorneys was 5.4%, providing 270 valid returns for statistical summaries.

The subscriber respondents represent all 50 states and the District of Columbia, 24% of them with headquarters in the Northeast, 13% in the southeast, 40% in the Central region, and 23% in the Mountain/Pacific states. Separated into seven industry categories, the majority of respondents are in manufacturing (32%) or wholesale/retail businesses (25%). Other major groups include business services (17%), professional services (13%), and construction/real estate (7%).

The attorney respondents represent 42 states and the District of Columbia; 22% of them are based in the Northeast, 19% in the Southeast, 36% in the Central region, and 23% in the Mountain/Pacific states. While the respondents ranged from sole practitioners to law firms with as many as eight offices and 140 partners, about two out of three represent small law firms with one office and no more than 5 partners.

Other vital statistics of the two respondent groups include the following:

Subscribers (993)

Avg. annual sales ($ mil.) $5.1

Avg. number of employees 62

Privately held corporation 84%

Publicly held corporation 6%

Proprietorship 7%

Partnership 3%

Use outside attorney 94%

Attorneys (270)

Avg. number of partners 10

Avg. number of employees 54

Median number of clients 250

Gen. practice: business law 72%

Gen. practice: litigation 6%

Business and litigation 11%

Specialist 11%