Proactive vs. Reactive Legal

Help! I need a lawyer. Proactive vs. Reactive legal

Surprisingly, many businesses still resist taking proactive legal measures. Most companies implement a range of preventative measures in other areas to reduce their exposure to various business risks. Why should legal matters be any different?

Reacting ‘after the fact’ to legal issues can end up being time consuming and costly, and cause further unforeseen problems, resulting in litigation, lasting brand or reputation damage, or in extreme cases, business failure.

In this article we’ll unpack the difference between the provision of proactive and reactive legal services, and outline the main benefits of being prepared for worst case scenarios, before they occur.

Proactive vs. Reactive

From a legal perspective, being proactive in business means mitigating risks; that is, identifying, analysing, and preparing for all possible outcomes in an attempt to minimise damage to the business – whether it’s financial, operational, or brand damage – caused by legal matters.

Reactive legal services are those which are only employed after your business experiences an issue, crisis, or, worse, has legal action taken against it.

Imagine investing time and resources into reviewing and negotiating a complex contract, for example, with an important new client. Agreed upon and signed, the contract is then filed and forgotten about.

The project – let’s say it’s a construction job – then gets underway. An unforeseen problem occurs, and work is delayed. By the time the contract is extracted to determine your right to an extension, it’s too late! Your client was to be notified immediately of any delays, and you’ve missed your chance to do that.

In this scenario, a proactive approach to the management of contracts would have enabled you to negotiate an extension with your client within the terms of your contract, hopefully avoiding ‘hot water’ and potentially costly further delays to the project.

The benefits of being proactive can be applied to many areas of the law, including but not limited to: business formation (trademarks, for example), contracts, employment, data protection, compliance and disputes.

Ready for anything

Discovering after the fact that the new logo and branding you’ve poured thousands of dollars and hours into creating is too similar to a competitor’s, and having to start all over again, could have been avoided if you’d fully investigated comparable brands before you started.

Hours spent negotiating and drafting contracts at the outset isn’t enough, either. In order to mitigate risk, contracts need to be managed effectively and consistently on an ongoing basis. Investing in this process means that in long run your efficiency will be increased, and your brand, business, and commercial relationships will be protected. Without the in-house legal skills to manage this, outsourced legal support may be the ideal solution.

Instead of scrambling to engage a lawyer once a problem occurs, thinking proactively will mitigate as much risk as possible during the negotiation and review period, ensuring you are abreast of your rights and obligations during the entire process.

Clarity of cost

By engaging on a regular basis with a legal adviser, you will also have a clearer picture of what’s required up front financially, rather than possibly ending up in a situation where you will pay ‘anything’ to be extricated from legal matters that have already arisen.

Peripheral Blue offers clients a subscription model, which not only encourages proactive engagement, it enables us to create longer-lasting, more dynamic relationships with clients.

By being transparent and consistent in costing, our clients are able to utilise all of their available hours, every period, which in turn enables us to provide the most exceptional service possible across all areas of legal, policy, and contract management.

Proactive thinking

Engaging legal services proactively requires a shift in mindset.

At Peripheral Blue, we work collaboratively with clients so that they understand the value in our innovative approach; challenging and encouraging them to think outside the square regarding the traditional provision of legal advice and support.

As a result, our clients have seen first-hand the benefits of our being able to proactively and efficiently identify potential business risks on their behalves, freeing them up to focus on what they do best – operating and building their businesses.

Taking a proactive approach makes sense, and will inevitably save your business money in the long run. For advice on how to ensure your business is ahead of its legal game, contact a PB Lawyer today.