What can lawyers do for enterprises? Nowadays in China, legal services are growing vigorously; however, there are still many people associate lawyer with “going to court” only. In fact it is only small part of lawyers’ role. Even when the enterprise has hired a lawyer as legal adviser, they are not fully leveraging lawyer’s functions. We believe, apart from the necessary procedures, as the legal adviser, non-litigation risk control shall become lawyers’ work centrality to control the cost of enterprise’s potential legal risk.

As we all know, the law itself has dual functions of prevention and relief. As to the enterprise, maintaining the interests only through litigation not only cost money or time, but also probably lead to fail due to insufficient prevention. Therefore, counselor’s role of risk control in non-litigation legal field is an inevitable choice for enterprise’s developments.

Specifically, the work and roles of a legal counselor for enterprises are mainly embodied in the following respects:

(1). Review contract, promote risks in day-to-day operations

Company will continuously trade with outside for survival and development, and the transactions are confirmed through negotiation or contract. And in this process the rights and obligations of both parties are not only beneficial for development, but also have traps and crisis. Along with the development of legal system, legal professionals gradually accept “autonomy principle” in signing contract; as long as the contents of the contract does not violate the law, the judge will not correct it, even some unfair regulations. Therefore, review and examination of the contract is very important in the trade.

If the contract’s contents are not reviewed before signature, once the contract is signed and sealed, it may be too late to find out the loopholes or traps. In addition, with the development of market economy, laws, regulations and judicial interpretations are increasing continuously, so the requirements for reserving and updating legal knowledge are higher; in that case, only unprofessional personage can not take the charge of contract review.

Therefore, as legal advisers, lawyers can use their professional knowledge and experiences when review contract, which can be more effective to help enterprises deal with daily operations, in order to prevent potential risks, and it has its far-reaching significance.

(2). Analyze legal risks and standardize operation behaviors in joint venture, merger, division or investment.

When enterprises come to a certain degree of development, they generally need to achieve a new level of form through changing the form of enterprises, including joint, merger, division or investment. Any form is different from the general trade, which may involve enterprise’s long-term development planning, and may even spend lots of money. In this process, if enterprises do not take risks prevention seriously, the pace of enterprise may be disrupted, influencing enterprise’s long-term development.

Especially, the powerful group companies need legal advisers. Money flows or equity transfer between head company and each subsidiary company, the effective control of subordinate enterprise, as well as foreign investments of group company and each subsidiary company, so these actions all need legal counsel to provide legal opinions from the angle of law and policy, and need lawyers to provide legal support at significant moments, to safeguard the company’s business decision to be legitimacy and feasibility. Therefore, as enterprise’s legal advisers, lawyers are very important.

(3). Act as the enterprise’s agent in contract dispute or such legal dispute’s mediation, arbitration and litigation activities, to safeguard the legal rights and interests of enterprises.

In present market environment, it is not realistic for an enterprise to avoid lawsuit completely, after all, lawsuit is the main way for rights remedy. Even the most outstanding legal adviser cannot ensure the enterprise doesn’t appear lawsuit. The lawyer can endeavor for the largest interests for company if gets proper cooperation. 

Lawsuit is a pretty professional business, not only acquiring adequate legal knowledge, but also litigation experiences. In lawsuit, sometimes only a word or words may have decisive influence on the results of case. So the opportunity participants grasp is becoming increasingly important, and this needs litigation experiences.

Litigation experience contains both utilization of the knowledge, but also includes the understanding of different areas’ lawsuits. From this point of view, professional lawyer is the most appropriate to deal with lawsuit for enterprises.

In addition, enterprise’s legal advisor can also use legal means to strengthen the management of contract, labor personnel, financial and commercial secrets, review the legitimacy of their rules and regulations, as well as assist to promote laws and regulations to employees, and thus conduct special legal training to optimize internal operation mechanism, staff’s legal consciousness and sentiment.

To sum up, enterprise’ legal adviser has more and more important roles participating in decision-making, operations, enterprise management, preventing and dealing with various legal disputes. If enterprise intends to develop better, the legal adviser’s roles cannot be ignored. Professional legal advisory service is one significant condition for enterprise to lead an impregnable position in commercial world.