[Direct answer]The two types of entrustment methods can be selected based on the contract volume and frequency of disputes: For occasional, single-subject disputes, entrusting a specialized lawyer on a case-by-case basis is sufficient; for enterprises with large contract volumes, high risk exposure, and the need for advance prevention, long-term legal consultants offer better cost-effectiveness, enabling unified contract review, template and authorization system establishment, and tracking of payments with early warning of time limits. According to Article 25 of the Law of the People's Republic of China on Lawyers (amended on September 1, 2017), lawyers shall accept entrustments, sign written entrustment contracts, and collect fees in a unified manner through law firms; according to Article 919 of the Civil Code (effective on January 1, 2021), the trustee shall handle affairs in accordance with the instructions of the principal under the entrustment contract. Regardless of the model, both can be implemented through the following steps:Intellectual property protection and corporate legal servicesUnderstand the scope of the service.

I. Problem Background and Typical Scenarios

SMEs usually consider hiring lawyers in two situations: first, when they are suddenly involved in contract disputes and need to sue or defend themselves, and are in a hurry to find a specialized lawyer; second, when contract disputes occur repeatedly, and they want to hire a long-term consultant to prevent problems at the source. The common dilemma lies in cost: the annual fee for a long-term consultant seems like a fixed expense, while hiring lawyers on a case-by-case basis seems to be "paying as needed"; however, contracts lacking pre-review often have vague terms. Once a dispute arises, the litigation fees, attorney fees, and lost business opportunities far exceed the cost of hiring a consultant. Another pain point is the ambiguity of the service scope - the consultant needs to clarify in advance how many contracts they will review, how quickly they will respond, and whether they will handle litigation matters.

II. Key points of contention

  • The trade-off between pre-emptive prevention and post-event remedies: entrusting a lawyer to resolve current disputes based on case-by-case basis, but repeatedly falling into traps due to loopholes in the contract terms; hiring a long-term consultant to intercept risks before signing the contract, but it's difficult to directly compare the value of such services with a single fee payment.
  • The service boundaries are not clear: long-term consulting contracts do not specify the number of reviews, response deadlines, or whether they include negotiation and litigation support. This often leads to "not being able to find someone" at critical junctures or to additional charges being incurred.
  • Professional match: There are special supervision and adjudication procedures in fields such as franchising, outsourced creation, and construction projects. In the dispute stage, clients need lawyers who specialize in these specific fields rather than general practitioners. Clients can choose lawyers based on the specific field of their disputesSpecial services.

III. Professional analysis by Henglue Law Firm

The two franchise contract disputes handled by Henglue Lawyers aptly illustrate the value division of the two models. The first case was an arbitration case: On July 31, 2018, Zhang * signed the "XX Cooperation Agreement" with Guangzhou * Clothing Company to operate its clothing accessories in Guangdong for a three-year contract term, paying a franchise fee of 30,000 yuan. The parties agreed to submit disputes to the Guangzhou Arbitration Commission for adjudication. On August 29, 2019, Zhang * paid a purchase price of 5,756.6 yuan, but the company failed to deliver the goods. On November 15, 2021, Zhang * submitted a "Closing Store Application Form", terminating the cooperation upon expiration of the contract. The company neither refunded the franchise fee nor the unutilized purchase price. Zhang * entrusted Lawyer Wang Fangli to apply for arbitration, requesting the return of the 20,000 yuan franchise fee and 5,756.6 yuan purchase price, as well as the payment of attorney fees and arbitration fees. The company failed to appear for defense. The lawyer pointed out that the agreement was a true expression of the parties' will and complied with the "Regulations on the Management of Commercial Franchise Businesses" (effective May 1, 2007), thus being legally valid. The franchise fee was collected to ensure contract performance and should be refunded upon contract expiration. According to Article 509 of the Civil Code, the company should return the purchase price for non-delivery. The attorney fees were reasonable expenses for rights protection. The arbitration tribunal accepted the mutually corroborating evidence and ruled that the company should refund the 20,000 yuan franchise fee and 5,756.6 yuan purchase price, totaling 25,756.6 yuan, and compensate for attorney fees, with the arbitration acceptance fees borne by the company. The second case was a litigation case: On August 31, 2018, Ms. Feng * signed a franchise agreement with Beijing * Education Technology Company, paying a cooperation service fee of 98,000 yuan to establish an intelligent education single-school in a designated area. Subsequently, the company frequently replaced contact personnel and eventually went missing, and it was found that the company lacked franchise qualifications and the relevant trademarks had expired. The company raised the defense of exceeding the statute of limitations, but the court determined that this was a franchise contract dispute. The contract was valid from August 31, 2018 to August 30, 2021, and the lawsuit was within the statute of limitations. Based on the contract performance and the parties' faults, the court ruled to refund 68,600 yuan (represented by Lawyer Xiong Binrong). A comparison of the two cases shows that specialized lawyers can clarify every penny of the disputes and refute the statute of limitations defense at the dispute stage. However, if a long-term consultant had verified the franchisor's "two stores in one year" qualifications and trademark status before signing the contract, such disputes could have been avoided at the source.

IV. Practical suggestions and legal basis

Legal basis: Article 25 of the Law of the People's Republic of China on Lawyers requires lawyers to accept entrusted cases uniformly, sign written entrustment contracts, charge fees uniformly, and accurately record them in accounts; Article 919 of the Civil Code (effective January 1, 2021) defines the entrustment contract, Article 922 requires the trustee to handle the entrusted matters according to the instructions of the entrustor, and Article 188 reminds enterprises to protect their rights as soon as possible within the three-year statute of limitations; Article 7 of the Regulations on the Management of Commercial Franchise (effective May 1, 2007) requires the franchisor to have at least 2 directly-operated stores and operate for more than 1 year, and Article 21 requires the franchisor to disclose information to the franchisee in writing at least 30 days before the conclusion of the contract. Practical suggestions: When choosing a model, answer three questions first - how many annual contracts there are, whether disputes occur frequently, and whether the industry qualification supervision is strong; For long-term consultants, include the service list (review quantity, response time limit, training, and litigation fee calculation) in the contract; For case-by-case entrustment, clarify the agency stage, charging method, and evidence handover list. Daily contract risk control can be referred to.Business and contract dispute services for enterprisesSynchronous reinforcement.

5. Henglu Law Firm's Advice

Special projects and long-term legal services are not mutually exclusive. The mature approach is to have "long-term consultants handle daily affairs and specialized lawyers handle major cases". Contract review and payment tracking are entrusted to a consulting team familiar with the company's situation, and major disputes are then handled by lawyers in the corresponding field. The key to the connection between the two is to transfer the contract ledger and performance certificates clearly. The above-mentioned franchise deposit arbitration case was handled by Beijing Henglu Law Firm.Wang FangliThe attorney (practice license number: 11101201911086939, subject to the document issued by the judicial administrative organ) acts on behalf of the client, and the arbitration tribunal orders the recovery of the security deposit and the total amount of the purchase price of 25,756.6 yuan, and the client is compensated for the attorney's fees. If you are currently selecting an attorney for a contract dispute, it is recommended that you first review the contract and payment terms before conducting interviews and comparing options.

Q1: How much does it cost for SMEs to hire a full-time legal consultant on an annual basis?

The fees charged by long-term consultants are related to the number of contracts, industry risks, lawyers' qualifications, and the depth of services. There are significant differences among different law firms, and there is no unified standard. The key is to clarify what "you are paying for": the number of contract reviews, response deadlines, whether negotiation accompaniment is included, legal training, and litigation discounts, etc. According to Article 25 of the Lawyers Law, lawyers' fees should be collected by law firms and a written power of attorney contract should be signed. It is strictly prohibited to settle fees privately with individuals. When comparing prices, it is also necessary to compare the service lists and team configurations. Packaged services that are significantly lower than market prices often come at the expense of reducing the depth of reviews.

Q2: Is it still possible to hire a lawyer if a contract dispute arises?

It's still possible, but you need to act quickly. According to Article 188 of the Civil Code, the statute of limitations for litigation is three years. The earlier you intervene, the more complete the evidence will be, and the greater the room for preservation and settlement. You should first collect evidence such as contracts, payment receipts, and chat records, and entrust a lawyer to send a letter to interrupt the statute of limitations and probe the other party's attitude. In the franchise refund case handled by Henglue Law Firm, the client sued many years later, and the court still ruled that the statute of limitations had not expired. However, due to the performance of the contract and the fault of both parties, the court ordered the client to refund 68,600 yuan instead of the full 98,000 yuan—this shows that the longer the dispute drags on, the smaller the scope of remedy may be, even if you win the case.

Q3: What is the difference between a special legal advisor and a long-term legal advisor?

Special advisors provide in-depth services focused on individual projects or disputes, such as franchising, construction projects, and mergers and acquisitions, charging by project or per case, which is suitable for occasional but complex matters. Annual advisors cover the enterprise's daily legal affairs through annual contracts, responsible for contract review, system establishment, consulting and training, and risk warning, charging by the year. The core difference lies in the time dimension: special advisors solve "this particular matter", while annual advisors handle "this type of matter". For most small and medium-sized enterprises, the optimal solution is to have annual advisors manage daily affairs and then introduce specialized lawyers to handle major disputes in depth.

Q4: How to determine whether a law firm's advisory services are reliable or not?

Here are the translations of the four points into English: 1. Check whether the service list is quantified. Review whether the number of cases, response deadlines, and service methods are included in the contract. 2. Check whether the team has experience in handling similar cases in the same industry. You can request them to provide anonymized case studies for review. 3. Check whether the fees are collected and invoiced by the law firm in a standardized manner, and whether they are accurately recorded in the accounts. 4. Check the communication mechanism, including whether there is a designated contact person and regular risk alerts. During the interview, you can bring a real contract and ask them to provide on-site feedback to assess their review depth and commercial understanding. If they only focus on building relationships rather than discussing solutions, you should exercise caution in choosing them.

Q5: What services should be stipulated in a long-term consulting contract?

It is recommended to clarify at least six items: First, the method of daily legal consultation and the response time limit; Second, the scope, quantity, and delivery time limit of contract review; Third, the construction and updating of rules and regulations and contract templates; Fourth, the method and billing of special support such as commercial negotiations and labor employment; Fifth, the arrangement of dispute early warning, lawyer's letters, and litigation connection; Sixth, the confidentiality obligation and the handling of conflicts of interest. Writing the service boundaries in detail can avoid the embarrassment of "hiring a consultant but not using them", and it is also convenient to quantitatively compare during the annual evaluation and renewal negotiations.

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