Do you know why legal advice is so important to companies? However, the accompaniment of a professional in the area of law becomes increasingly essential for the organizational routine. Since it is considered a preventive action with regard to general business decision making. Maintaining legal advice for companies makes all the difference. But after all, why does a company need legal advice? Keep reading this article and get to know all the principles of this service that is crucial for the company’s survival in the competitive market.
What is Legal Advice?
To understand the concept of legal advice, it is necessary to start from the premise that the role of a lawyer is necessary since the foundation of an institution.
This is because legal advice can be provided to guide entrepreneurs on certain issues that guide labor, social security, contractual rights, and other obligations under administrative laws.
In addition to providing peace of mind and security, the legal advisory service aims to help the business avoid losses and protect itself against problems that may arise from the legislation, such as fines and other types of punishment.
Simply put, legal advice should be seen as preventive advocacy, in which the main objective is to manage the corporation in the most correct and favorable way possible.
Good advice is able to provide financial stability for those seeking advantages in negotiations and long life for their business.
Most Common Legal Areas for Business Monitoring
The main purpose of legal advice is to develop tools that will support companies so they can carry out their tasks through legal procedures.
Therefore, companies may deal with legal matters with the following areas:
- Civil right
- Labor law
- business law
- Tax law
- Contract law, among others.
When providing legal advice, the responsible professionals need to establish close contact with the different sectors to carry out a more assertive work and align the company according to the law.
What does Legal Advice Really do?
Legal advice can work in two ways: litigation or preventive.
In the first case, the lawyer will represent the company in the classic way: directly in the courts, as well as in public administration bodies.
The second context refers to a practice that has been growing considerably in recent times, given the work that surrounds the prediction of risks and possible issues involving lawsuits.
See below the various fronts of action that make up a legal area in companies:
- Preparation of a company’s articles of incorporation
- Hiring professionals and developing employment contracts
- Advice for starting a business
- Contractual analysis of service/suppliers
- Adequacy to the requirements of the Ministry of Labor regarding employee safety and health
- Conformity to the Labor Reform
- Advisory Advocacy.
Functions of a Legal Counsel in the Corporate Universe
Interpretation of Laws
It is a fact that every entrepreneur should focus on the core business of their organization, right?
However, given numerous legislations integrated, it is complicated to follow the renewals of standards and, consequently, deal with so much bureaucracy involved in the daily process.
This is why legal advice for the company is so significant, because it correctly interprets the laws in order to facilitate their understanding and application.
A basic example of a situation is when closing contracts with suppliers.
Drafting of Contracts
As mentioned above, the professional will be responsible for interpreting the laws and applying them to their clients, whether individuals or companies.
But those who believe that the function is restricted to this are wrong.
The lawyer is responsible for drafting contracts based on a thorough evaluation of clauses, which could be risky in the certificates signed by their clients, in order to prevent future adversities.
The legal advisor must keep up to date to adapt the company to the new obligations that may be applicable.
This ends up taking legal advice to another important function: helping the organization to choose strategic decisions according to the legal basis in force in the country.
Therefore, an effective consultancy is provided for companies to act with greater productivity and safety.
Considered an essential aspect, risk prevention prevents the company from suffering the consequences of legal proceedings and onerous fines.
The legal counsel will be responsible for developing a work within the legal compliance, to avoid legal problems.
What are the Benefits of Hiring a Legal Counsel for Companies?
Check below the main advantages of legal advice can bring to the organizational culture:
Redemption of tax credits and defenses (judicial or extrajudicial): this is one of the benefits that legal advice can offer since most demands require the assistance of a lawyer;
Timeliness of actions: represents the need for certain actions to be filed within the correct period, in order to avoid losses and future setbacks. Therefore, the legal advisor will be able to guide the entrepreneur as to the terms and conditions in the most diverse legal actions;
Saving losses in the labor sphere: with the support of legal advice in the Human Resources sector, the chances of divergences with labor liabilities or doubtful contractual clauses occurring.
But after all, why does a company need legal advice?
Many people question whether it is really necessary to have legal advice.
And yes, it is extremely important to strengthen the active permanence of an organization in the market.
Statistical data indicate that many businesses face crises in their first years of existence, due to lack of legal knowledge.
An example that clearly portrays the need to invest in hiring legal advice is the preparation of a service provision contract.
In this way, the consultancy will ensure the rights and duties in the relationship between a company and a new client, for example, ensuring that this partnership does not bring harm to both parties.
Therefore, the dimension of the role of legal advice for better tax planning, preventive action in meeting deadlines, and judicialization is understood.