Project Name: Legal Issues Encountered in Corporate Operations and the Role of Legal Advisors in Management
Project Time: 2023 Fall
With the development of China’s economy and intensified market competition, the demand for legal advisors in enterprises is gradually increasing. However, many companies still need to hire legal advisors due to insufficient understanding of their role. The function of legal advisors in enterprises varies from one company to another. This activity aims to investigate the role of legal advisors in enterprises through interviews and questionnaires.
Jiayi Wei (Duke Kunshan University), 2026
Zihan Chen (Duke Kunshan University), 2026
Jiaming Xue (Duke Kunshan University), 2026
Before our research, there was limited data on how firms conduct risk management from a legal perspective. While some information exists on how firms should establish their legal framework in managing business, there is a notable gap in understanding how these firms implement these practices.
- 57 valid research samples(10% foreign enterprises,84% private enterprises, 5%state-owned enterprises &others)(10% listed). On average: 5.4 legal disputes per year for each enterprise.
- Main issues: contract disputes(encountered by 75%enterprises), Labor relations(52%) and equityissues(25%).
- Handling: 72.4% of the enterprises own an internallegal department and/or consult external lawyers for assistance. The rest mainly relies on self-mediation.
The legal advisor primarily handles contract review and dispute resolution in the enterprise. For enterprises that have not yet hired a legal advisor, the main concerns are cost and business size constraints.
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To help enterprises improve their abilities to prevent potential legal risks, there are two main strategies:
- Improve risk prevention mechanisms: Theperson in charge of the enterprise should have a certain awareness of legal risks, clarify the loss (economy, reputation, etc.) that may be caused to the enterprise by relevant legal risks, and take preventive measures in advance.
- Budget planning: To avoid problems such as the “inability to cope with sudden legal disputes” caused by insufficient funds, enterprises can setaside part of their annual profits for legal consultation/legal dispute resolution.
Prevention is better than remedy. Our research reveals that even orders amounting to less than ten thousand yuan may result in a loss of 70-80% of the order value in the event of a legal dispute. Therefore, we strongly recommend that businesses undergo regular legal consultations.
The Zhong Yin Law Firm was established in January 1993 and is one of the earliest partnership law firms in China approved by the judicial department. Its headquarters are located in Beijing, and it currently has branches in 34 cities, including Shanghai, Tianjin, Chongqing, Shenzhen, Guangzhou, and Kunshan. The firm has also established the first cooperative law firm in China consisting of partnerships from the Mainland, Hong Kong, and Macao: the Zhong Yin-Li Tu-Fang Shi Alliance Firm, as well as a Qianhai branch of the Zhong Yin-Li Tu-Fang Shi Alliance Firm. It currently employs nearly 3,000 lawyers and staff members. Zhong Yin Law Firm is actively expanding into overseas markets, building a global legal service system, and promoting leading levels of expertise in various fields through practice. The firm has established strategic cooperative relationships with legal institutions in more than a dozen countries, including the United States, Germany, France, and Canada. It has trained many international lawyers proficient in multiple languages, including English, French, Japanese, Korean, and German, enabling them to provide legal support to clients. This ensures that Zhong Yin Law Firm’s clients can quickly obtain comprehensive and efficient legal services on a global scale.