Considering how extensive they are, it’s difficult to know the ins and outs of all the laws pertaining to managing and operating a business.
However, effective and well-planned legal strategies are the key to maximizing success in the corporate world. The law can often be limiting and restrictive, but when used to one’s advantage, it’s incredibly rewarding.
It’s not enough to treat local and international legal policies as mere parameters within which business is conducted. These days, law firms are facing intense competition as corporations invest in internal legal teams and strategists. These experts are hired by companies who are looking to seize and maintain a long-term competitive advantage.
According to researchers, there are five legal pathways that companies can take when it comes to shaping their policies. They are:
(1) avoidance—wherein companies avoid paying heed to the law and the consequences of their decisions
(2) compliance—this approach leads to companies working within the limits of the law, which is considered unwelcome and restrictive, but also necessary
(3) prevention—here, the law is viewed as guidance, with companies and executives actively seeking legal counsel. MIT Sloan refers to this as a “proactive instead of reactive” approach to law
(4) value—the law in this pathway is essential when trying to add value to a company’s products or services. That is to say, the company’s legal teams work to maximize return on investments through the use of law, factoring in important stakeholders—both internal and external. In fact, the legal team itself becomes a stakeholder in this approach
(5) transformation—this is when companies successfully integrate legal frameworks into their corporate strategies and business models. It can be a tricky transition to make, especially for companies that have operated for a while without following this model, or have no resources to do so.
It’s about figuring out your company and its executives’ understanding of legal models and frameworks to see which pathway suits your organization more. To learn more about what legal strategy works for you, get in touch with me through my website.