[Direct answer]Legal advisory services generally cover eight major modules: contract drafting and review, labor and personnel employment compliance, corporate governance and equity documents, intellectual property layout and protection, accounts receivable and debt collection, administrative and industry compliance, daily legal consultation and training, and litigation and arbitration representation. According to Article 29 of the Lawyer Law of the People's Republic of China (amended on September 1, 2017), lawyers serving as legal advisors shall provide legal opinions in accordance with the agreement, draft and review legal documents, and represent clients in litigation, mediation or arbitration. Enterprises often sign contracts on an annual basis, and it is recommended to list the service items and response deadlines in the entrustment contract (such as issuing a written review opinion within 48 hours for important contracts). Beijing Henglu Law FirmCorporate Legal ServicesThat is, it can be customized by module. For more details, please refer to the following link:Beijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 29 of the Law of the People's Republic of China on Lawyers (amended on September 1, 2017)

The article clearly stipulates the statutory duties of lawyers serving as legal consultants: to provide opinions on relevant legal issues as agreed, draft and review legal documents, represent clients in litigation, mediation or arbitration activities, handle other legal matters entrusted by clients, and safeguard the legitimate rights and interests of clients. The legislative purpose is to incorporate legal consultancy services into professional norms, and the scope of services shall be subject to the provisions of the entrustment contract. In practice, the most common misunderstanding is "whether this matter is within the scope of services". Therefore, when signing the contract, the service modules, response deadlines, and whether litigation representation is included should be listed item by item to avoid relying on verbal promises.

2. Article 919 of the Civil Code of the People's Republic of China (effective January 1, 2021)

A commission contract is a contract in which the principal and the agent agree that the agent will handle the principal's affairs. A legal advisory contract is, in nature, a paid commission contract, under which the law firm handles the enterprise's legal affairs in accordance with the agreement. According to Article 929 of the Civil Code, if the principal suffers losses due to the agent's fault in a paid commission contract, the principal may request compensation. This reminds enterprises of two points: first, the scope of services should be clearly stated, and the law firm does not necessarily have the obligation to handle matters that are not agreed upon; second, the liability for fault, the obligation of confidentiality, and the method of document handover should all be included in the contract. Only when there are omissions can there be a basis for accountability and compensation.

3. Practical adjudication guidelines

Regarding disputes over routine legal services, courts generally determine whether the services have been provided based on the provisions of the agency contract and the actual performance of the services: failure to provide the specified modules constitutes a breach of contract; unspecified major matters (such as a lawsuit) are often deemed to require separate retention and separate fees. There are three pitfalls that enterprises are most likely to fall into: only comparing prices without considering response deadlines and team configurations; mistaking litigation cases as being included in routine legal fees; and relying entirely on verbal communication without keeping written records. The standard practice is to conduct a review of the service list once a year, and require lawyers to provide written opinions and keep records for important contracts and major decisions.

II. Practical Experience of Henglue Law Firm

Based on Henglue's practical observations in handling corporate legal affairs and commercial disputes, the value of legal advisors lies in the "prevention stage": contract versions being chaotic, verbal amendments to contract terms via WeChat, unverified accounts receivable, and no written confirmation of handover procedures upon employee departure are the four most common sources of litigation. Judges highly rely on written evidence in such cases, as oral agreements are nearly impossible to prove. Therefore, the first task of advisory lawyers after getting involved is usually to establish a contract filing system for the enterprise, standardize the stamping process and evidence retention mechanisms, and fix the evidence needed for future litigation at the time the business transactions occur.

Common disputes also include: disagreements between shareholders over dividends and voting rights; regulations in labor employment being deemed invalid due to failure to undergo the public announcement procedure; and disputes over the validity of external guarantees due to lack of resolution procedures. Most of these issues can be prevented at a very low cost during the contract signing and bylaw design stages. If the dispute has already arisen, the enterprise should promptly entrust a lawyer to evaluate the situation, and the handling of commercial contract disputes can be referred to for reference.Business and contract dispute services for enterprises，账款追索可参考Creditor-debtor relations and enforcement case servicesOther types of legal matters can also be handled throughSpecialised legal servicesDocking.

III. Frequently Asked Questions

Q1: How do long-term legal advisors typically charge for their services?

It is common to charge fees on an annual basis, with the price being influenced by the size of the enterprise, industry risks, service lists, and response deadlines. There are also options for monthly or modular billing. Before signing a contract, the law firm should be required to list the service modules, the lead attorney, and the response standards in a written contract. For frequent litigation or major mergers and acquisitions, fees are usually negotiated separately to avoid disputes afterwards if everything is clearly agreed upon in advance.

Q2: Are legal advisors and lawyers who litigate the same thing?

It's not exactly the same thing, but they are usually different services provided by the same group of practicing lawyers. Consultants focus on prevention: reviewing contracts, regulating employment, and participating in negotiations; litigation focuses on dispute resolution after the fact. The two complement each other's capabilities. Consultants with litigation experience are better able to identify where contractual loopholes might arise, so when selecting a consultant, it's important to first consider whether they have handled similar disputes before.

Q3: Is it necessary for small companies to hire legal consultants?

It's necessary, but it can be configured as needed. The risks of small and micro enterprises focus on three aspects: contracts, labor employment, and receivables. You can start with the basic version of legal services to set up contract templates, employee handbooks, and reconciliation processes. You can also purchase individual services at key stages such as major contract signing and equity changes, which is much cheaper than litigation and compensation after the fact.

Q4: Can legal advisors help collect debts?

Yes. Sending lawyer's letters, issuing payment reminders, negotiating repayment plans, and initiating lawsuits and asset preservation are all common components of advisory services. It's better to address debt arrears as soon as possible. Generally, the statute of limitations for civil creditor's rights lawsuits is three years, and the right to win the lawsuit will be lost if it exceeds the statute of limitations. The earlier the advisor gets involved, the more likely it is to secure the creditor's rights when the evidence is complete and the other party has the ability to pay.

Q5: What clauses should be paid attention to when signing a contract with a legal consultant?

The key points to focus on are the following five aspects: whether the service list is itemized, the commitment on response time (e.g., responding to important contracts within 48 hours), the allocation of lead attorneys and teams, whether it includes litigation representation and preferential billing, and the mechanisms for terminating the contract and refunding fees. Oral commitments are not legally binding if they are not included in the contract. It is safest to check each item one by one before signing the contract.

IV. Suggestions for Protecting Rights and Interests

  • Startups: First, hire a lawyer to set up contract templates, employee handbooks, and stamping procedures. Then, discuss business expansion and prevent risks before signing contracts.
  • Growth stage enterprises: Conduct a compliance check at least once a year, with a focus on reviewing external contracts, guarantee resolutions, equity trusteeship, and labor employment issues.
  • When encountering defaulted payments: First, save the invoices, delivery receipts, and chat records. Within the three-year statute of limitations, send a letter of reminder and consider applying for preservation of evidence.
  • Before renewing the consultant contract: Review the list of services provided in the previous year item by item, and adjust the modules with slow response and incomplete coverage into the new contract.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Intellectual property protection legal services·Beijing Henglu Law Firm