What does subscription legal service provide to enterprises? What are the features and advantages for clients? How is the cost of legal services calculated?
Subscription legal service for business is a legal support of companies and entrepreneurs on a permanent basis, which provides legal advice on business, taxation and licensing, round-the-clock legal support of managers and owners of companies, legal analysis of business documents of the company and counterparties, legal support during inspections of regulatory authorities, litigation of the company, representation in state bodies and institutions.
Comprehensive legal support is also used by businesses when launching various atypical projects (investment funds for commercial and residential property, innovative financial payment services, neobanks, electronic money institutions, virtual assets, etc.), or in extremely problematic situations (criminal cases, tax audits, legal disputes in courts of various instances, active raider actions against the company, etc.).
Subscription legal support for business: advantages
Based on our experience in supporting the activities of Ukrainian companies, we can highlight the main advantages of subscription services:
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Ongoing legal support for business
Businesses receive a full package of professional legal services. These can be provided either round-the-clock or on a limited package agreed with the client (for example, a certain minimum or maximum number of legal services or a certain number of hours of a lawyer’s work). The cost of services will also vary depending on the subscription package chosen.
A monthly legal support package may include the following services:
- provision of oral and written legal advice on business activities;
- Compliance audit for compliance with corporate, antitrust, tax and other laws;
- due-diligence of counterparties;
- legal analysis of the company’s current financial and business documentation;
- development of necessary agreements with counterparties;
- support during audits by regulatory authorities;
- tax disputes;
- economic and corporate disputes;
- legal support of negotiations with counterparties and state authorities;
- registration of business entities and their internal subdivisions;
- business structuring;
- defence of a company in criminal proceedings (white collar crimes);
- other agreed legal services.
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Legal security of the company
Through long-term co-operation, legal advisors are informed about the specifics of the client’s business, as well as its legal weaknesses and strengths. As a consequence, the legal advisors can maximise the legal security of the company under subscription services. This can be done, for example, by developing and introducing individual anti-raider clauses in the company’s constituent documents, developing safe schemes of business and asset ownership in Ukraine, conducting business structuring, including with the participation of non-resident companies, etc.
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Optimisation of time and costs for resolving legal issues
When using subscription support services, managers of enterprises are considerably freed from such problematic issues as resolving disputes with counterparties or competing companies, communication with regulatory authorities and the like. The saved time can be spent on other strategic tasks (for example, business expansion and entering new markets, which has a positive impact on the profitability of the enterprise).
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Improving the efficiency of the legal department/division of the company
Experience shows that the best results are achieved when a company has an in-house lawyer (or legal department) on the one hand, and independent lawyers (legal consultants) on the other. In this case, in-house lawyers can concentrate on current legal work, while engaged lawyers can solve more important and complex legal tasks (comprehensive support of atypical start-ups, preparation of legal opinions on problematic business issues, assistance in structuring the company, entering international markets, communication with regulatory and law enforcement authorities, support of tax audits, representation in courts and state authorities, etc.).
If the company does not have in-house lawyers, it is possible to engage external lawyers to perform current legal work at the company, which is usually performed by in-house employees:
- legal analysis of incoming and outgoing correspondence of the enterprise
- consulting on labour law issues
- legal analysis of personnel documentation
- amendments and additions to contracts with counterparties
- participation of lawyers in weekly or monthly meetings of the company’s management, etc.
Features of subscription legal support for business
In addition to the above advantages, there may be special points that you should pay attention to from time to time:
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Speed of processing legal requests
In practice, the duration of processing legal tasks by engaged lawyers can be longer than, for example, in-house lawyers. This is due to the fact that legal advisors may simultaneously support several business projects or provide comprehensive support to several companies. Sometimes such requests require more in-depth work (analyses of special legislation, court practice, official clarifications of regulatory authorities, etc.), which also affects the duration of legal work.
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Scope of legal services
In the absence of clear agreements on the detailed scope of legal services (maximum number of monthly services), misunderstandings may arise between companies and lawyers regarding the scope of services provided. For example, a client company constantly sends its lawyers requests for consultations, analyses of legal documents, drafting of contracts, etc. The client company is forced to provide legal services to the lawyers. With such co-operation, after some time the lawyers will consider that they are over-fulfilling their obligations. But on the part of the company such a situation will not be understandable, because there is a valid contract for permanent legal support, and payment for the cost of services is made in full and without delays.
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Financial issues
Co-operation with lawyers on the terms of subscription support requires from the company corresponding financial expenses. Under certain conditions, such costs can be very significant, in particular, in the case of legal support of business on the terms of an unlimited package of legal services (that is, if there is no limit on the number and type of legal services).
In addition, there may be some financial misunderstandings between companies and lawyers about the order of payment for the cost of services. For example, if there are no legal enquiries for a certain period of time, the enterprise may have questions about the expediency of paying for non-existent services of legal advisors for such periods of time (as compared to other periods of active cooperation).
CONCLUSIONS: Subscription legal support of business is a convenient and effective tool for ensuring proper legal work at the enterprise. At the same time, in order to prevent possible misunderstandings between the business and legal advisors, it is recommended to agree on all procedural and organisational issues (regarding the scope and procedure for providing legal services, determining the cost of services and the order of payment, etc.) at the beginning of agreements on such cooperation.
Based on an article on the Ukrainian online platform “ДІЯ.БІЗНЕС”: https://business.diia.gov.ua.
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Lotysh Andriy - lawyer, managing partner