Using PEST analysis to identify external influences
A Legal Services Commission case study

Page 2: External factors

The LSC has to work within a changing environment and respond to many factors over which it may have no control.

Many of these factors relate to government policies which impact on social, legal and economic areas of the UK. They also include the decisions of legal bodies, such as courts in the UK or European Union (EU), changes in the law and even changes in society. They are 'external' factors because they are problems arising from groups or forces outside of the LSC”s control.

PEST analysis

When assessing the main impact of external factors on any business or organisation, it is helpful to group these together using the acronym PEST. This stands for the four areas that represent the most common external influences. These are:

• Political factors for example, new laws and regulations or decisions made by governments
• Economic factors changes in the economy, people”s spending power, patterns of wealth
• Social factors changes and trends in society, for example, the number of people aged over 60 in society
• Technological factors changes in techniques or equipment that can lead to the development of new goods and services or new ways of doing things