Legal advice is the service that a lawyer or a law firm provides to an organization in order to provide legal security for the business in its different areas.
Running a business is not an easy task. In addition to all the necessary knowledge of the field of activity, having knowledge of different areas of law is essential to avoid future problems. And it is in this area that legal counsel works.
Opening a legal entity, doing the corporate division, problems with contracts, errors in the purchase of materials from suppliers, legal disputes, all of this is common in the daily life of a company. And these problems, if not managed correctly, can cause huge breaches in accounts.
In the hypercompetitive scenario that the current economy presents, preventing unnecessary expenses, reallocating resources correctly, and having a strategic view of the business are essential for companies that want to remain competitive with their competitors.
That’s why we wrote this article talking about legal advice and what its applications are within the corporate world. You’ll see what legal advice is, how it works and what benefits it brings to the prevention of litigation and cost savings in the business. Good reading!
What is legal advice for?
The main objective of legal advice is to provide specialized services in the areas that the company needs in order to prevent costs and damages, reduce errors and failures due to lack of legal knowledge and look for ways to make the company’s legal area beneficial to it.
By bringing legal knowledge into the organization’s activities, the legal advisor brings more security to the company’s actions, in addition to saving money by reducing litigation and problems related to legislation.
By having someone or a team assigned to look for ways to make the business less likely to suffer lawsuits, be charged for problems related to current legislation, and look for administrative ways to resolve conflicts, the balance of expenses with litigation decreases, and the security of managers to focus strictly in business increases.
Differences between legal advice and Legal consultancy
Many people, including lawyers, use the terms “legal advice” and “Legal consultancy” as synonyms, but the two are different services, with different purposes and objectives.
Legal advice is a technical activity that aims to prevent legal damages, helping different sectors of a company to organize their activities in accordance with current law.
The legal advisor actively works within the organization in a strategic way to reduce litigation expenses, create and monitor the legality of contracts, understand the branches of law necessary for the business and seek less costly and more efficient ways to resolve conflicts.
Legal consultancy, on the other hand, is an activity that aims to provide information and guidelines for the client to identify or resolve problems of a legal nature in the business, in addition to pointing out changes that can improve the company’s performance.
The legal advisor, then, usually works in a reactive way to the problems presented, in addition to not acting directly in the activities and sectors of the company.
It analyzes specific company situations and points out possible solutions to the problems encountered.
Thus, we can say that legal consultation is a more punctual and theoretical activity, which aims to show problems and improvements, but not necessarily to correct them.
While legal advice works actively and strategically within the company, preventing problems and creating solutions for those who come forward.
Practical example of legal advice
Imagine a company whose job is to provide gardening services. This company, which is still in its infancy, has two experts in the field under contract, but it needs a third person to do a great job.
This third person is called for that job and, by showing that they are good at it, they are called to work at the company, but without a contract and without providing the necessary equipment to perform the service.
A legal advisor aims to see the problems that this type of hiring can cause the company. The legal liability, in this case, is growing and will eventually turn against the company.
The legal advisor, then, has the role of preventing the company from litigation, legal and legal problems, checking the current laws, creating service contracts with clauses that protect the employment relationship, analyzing taxes and fees to be paid, and others.
Although the role of the legal advisor is currently more active and preventive, it also has the function of reducing losses in situations where a legal dispute is inevitable.
In our previous example, if the worker who was not hired went to court in search of their rights, it is the legal advisor’s role to try to resolve this through the least onerous ways, proposing agreements or mediations that resolve the conflict without the need for litigation.
Importance of legal advice for companies
Seeing the example above, the role of the legal advisor within a company is to act actively, avoiding legal disputes and complications that the organization may have, unlike a common lawyer, who is reactive to legal problems.
Having legal advice, therefore, is an important strategic advantage for companies of all sizes and activities, as dealing with legal and legislative issues and legal situations is inevitable in any of them.
All businesses need to produce and sign contracts, be aware of the laws specific to their industry, and know what taxes and fees must be paid. In addition, tax or labor problems are common in the market and present high expenses in the balance of accounts.
Strategically investing in quality legal advice means, in the long run, preventing problems that occur due to the absence of qualified personnel to deal with problems in these areas, generating costs that, over time, could be invested in the company’s competitive growth.