What it Means
The legal function of a business is its bulwark against potential risks and the guardian of its rights, interests, and obligations. Spanning across various facets of a company—from HR to intellectual property, and from contractual dealings to regulatory compliance—it is the linchpin that ensures all operations remain within the purview of the law.
This function encompasses a myriad of responsibilities: drafting employment contracts, ensuring workplace rights, safeguarding intellectual property, navigating regulatory landscapes, drafting supplier and partner contracts, and much more.
Why it Matters
Company Y is a growing SaaS firm. As they develop, they use a combination of in-house legal counsel and specialty law firms to help them with:
Trademarking: They decide to trademark their product's unique name, ensuring brand protection. Company Y needs help with the initial filing process, including ensuring that they are not infringing upon any existing trademarks. They also need guidance in navigating any conflicts or challenges that may come up during the process or after the trademark is granted.
Supplier Contracts: As they source hardware components from various vendors, their legal team drafts watertight contracts, detailing obligations, payment terms, and dispute resolution mechanisms.
Employment and Onboarding: As the team expands, the legal function ensures every new hire's contract is clear, fair, and compliant with labor laws. The CEO wants to build a new sales team with a variable comp structure, but she had no idea that compensation agreements in the U.S.A. are bound by state law. Luckily, she's got an in-house counsel for that.
Regulatory Adherence: Before launching, the legal team reviews the product against software regulations in the targeted market, ensuring no legal hiccups post-launch. The team realizes that software sales tax laws are very complicated in the U.S.A., so they contract with a third-party firm specializing in it.
This proactive legal approach not only ensures a smooth product launch but also positions the company securely against potential future challenges.
Stack it - Resources & Tools
Legal Software Solutions: Platforms like LegalZoom or RocketLawyer provide boilerplate legal templates as well as help in managing legal documentation, maintaining compliance, and tracking legal issues.
Consult with Local Law Schools: Many law schools offer clinics where students, under the supervision of experienced lawyers, provide free or low-cost legal services to SMEs.
Books: "Business Law and the Regulation of Business" by Richard A. Mann and Barry S. Roberts offers a comprehensive view of the legal facets of business operations.