MILAN, 9 August 2004 Legal news, law news, law firm news & re…

MILAN, 9 August 2004 Legal news, law news, law firm news & research at LAWFUEL – Independent research commissioned by Baker & McKenzie Milano S.t.P. reveals that small to medium Italian companies believe bureaucracy, misinformation, limited knowledge of regulations compliance and low risk perception play a key role in slowing down development and growth. 81% of entrepreneurs and managers interviewed state there have been too many new regulations introduced recently in Italy.

The survey, conducted by market research company Astra/ Demoskopea, involved interviews with 248 senior managers and entrepreneurs in Central-Northern Italy. The research highlights the difficult relationship existing between SME’s and bureaucracy. Of those interviewed 69% believe new laws are too complex, 58% are concerned about the continuous amendments to these regulations, and 53% believe the law-making process does not take entrepreneurial needs into consideration.

Methods used by participants to update themselves on regulations are trade press (76%), industrial associations (75%) and external consultants (72%). A minority of those interviewed are currently working with more than one specialised law firm (35%). 60% stated that the only situation in which they instruct a law firm is when a problem arises.

Of the recent or future changes to the regulatory framework mentioned by entrepreneurs and managers the laws regarding safety and health at work were referred to most (50%), followed by the new Privacy Code and Data Security regulations (50%) and thirdly, the reform of corporate law and its implications on groups of companies (49%).

Within this research Professor Enrico Finzi, President of Astra/Demoskopea, outlined five clusters among managers and entrepreneurs when considering their relationship with laws and regulations:

the unwary, misinformed and ill-equipped (40%)
the concerned and quality-aware (17%)
the informed and comfortable (16%)
the conscious traditionalist (15%)
the informed, most concerned and lobbyist (12%)

The widest profile, ‘the unwary, misinformed and ill-equipped’ consists of managers or entrepreneurs of companies with a turnover between €10 and 99 million and with a number of employees between 15 and 99 (45%). They believe there are too many laws (76%) and that these are too complex (66%). To update themselves on regulations 73% turn to external consultants; 72% prefer to read economic or financial publications and 67% utilise trade association support.

Gianfranco Di Garbo, a Partner with Baker & McKenzie Milano S.t.P., underlined the lack of knowledge regarding regulations compliance among SME’s and highlighted one important example. This relates to the awareness of Law 231/2000, regarding the anti-crime measures adopted by companies. An insufficient knowledge of this provision, its partial application or simply a misunderstanding of the wording, may give the impression that if an employee commits an administrative crime, the company would pay a fine. In fact this would involve evaluation by a criminal judge and administrative sanctions may even cause the company to collapse.

Mr. Di Garbo said, “This is one of many examples in which a company headed by a ‘unwary, misinformed and ill-equipped’ manager could face great difficulties. Today, the role of a law firm consists of more than solely providing legal advice, it needs to ensure compliance. The findings of this survey give us a greater understanding of the needs of our clients and help us to provide an enhanced service.”

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