[Direct answer]It's necessary. Corporate executives are deeply involved in governance decisions, financial and tax affairs, financing and investment, bidding and tender, and supplier management, etc. They may be implicated in crimes such as embezzlement, misappropriation of funds, commercial bribery, false invoicing, and illegal absorption of public deposits due to flawed decisions or the actions of others, and their personal criminal responsibility cannot be covered by the company. The value of personal criminal legal consultants lies in pre-compliance assessment and decision-making control, crisis response during the process, and seamless connection with defense after the event. According to Article 34 of the Criminal Procedure Law of the People's Republic of China (amended in 2018), a criminal suspect has the right to appoint a defense attorney from the date of his/her first interrogation by the investigating organ or the date of taking compulsory measures. Establishing a consultancy relationship in advance can enable professional assistance to be initiated at the first critical moment. Relevant arrangements can be referred to herein.Enterprise legal advisory servicesAndCriminal defense legal services.

1. Problem background and typical scenarios

The criminal risks faced by executives are different from those of ordinary positions: first, there are "decision-making-related" risks. Excessive behaviors in signing and approving documents, fund allocation, and related transactions may directly constitute crimes; second, there are "environmental-related" risks. Executives who implement false invoicing, commercial bribery, and illegal fund-raising to meet performance targets are often prosecuted together with those who actually carried out or were aware of these actions; third, there are "implicated-related" risks. The actions of partners, relatives, or subordinates may affect the executives themselves. Typical scenarios include: signing invoice approval forms knowing there are no real transactions, instructing the finance department to transfer funds to related parties, accepting benefits from suppliers in procurement bidding, and participating in fund-raising after the enterprise's capital chain breaks down and the fund-raisers report the case to the police. Once these situations enter the investigation process, the executives' personal freedom, professional reputation, and family assets will be directly impacted. By that time, if they seek legal help, it's often too late to take the best response measures.

II. Key points of contention

  • Corporate consultants are not the same as personal consultants. The service recipients of corporate legal consultants are enterprises. When executives are under investigation, the company may not hire lawyers to defend them based on its own interests, and there may even be conflicts of interest. Executives therefore need independent personal consultants and lawyers to defend them.
  • Conflict of interest rules: Article 39 of the Law of the People's Republic of China on Lawyers prohibits lawyers from acting as agents for both parties in the same case, or acting on matters where there is a conflict of interest between themselves and their near relatives; when the interests of the company and its executives are in conflict, the same lawyer team cannot "pursue both sides' interests at the same time".
  • The connection between pre-emptive prevention and post-event defense: Compliance reviews in the consulting phase, meeting records, and document retention may become important evidence to prove the absence of subjective intent in the future; the first statement made after being investigated and the timing of applying for bail directly affect the outcome of the case.

III. Professional analysis by Henglue Lawyers

The experience gained by Henglue Lawyers in handling cases involving criminal charges against corporate executives is that risk management should be implemented in advance. At the pre-event stage, personal criminal legal consultants will sort out a list of high-risk areas based on the executive's job responsibilities, including fund approval, seal management, related-party transactions, tax arrangements, and supplier selection. They will conduct compliance assessments for major decisions in advance and, if necessary, provide written legal opinions and advise on the reasons for refusing to sign agreements. For the firm's internal investigations and audit interviews, they will guide executives in providing truthful and restrained statements to avoid self-incriminating remarks. At the mid-event stage, when receiving notifications from the public security authorities for summons or assistance in investigations, lawyers can inform them of their rights and obligations, accompany them to handle family and work handovers, and promptly formalize the defense process. Timely intervention during the investigation stage can help apply for bail pending trial and put forward preliminary opinions that the suspect did not commit a crime. At the post-event stage, decision-making documents, approval processes, and meeting minutes preserved during the consultation phase can be organized and used as defense evidence to prove the absence of subjective intent, compliance with orders, or fulfillment of due diligence obligations. If complementary arrangements are needed for both corporate and individual compliance, they can be designed in conjunction with other measures.Business and contract dispute resolution services for enterprisesTeam collaborative evaluation.

IV. Practical suggestions and legal basis

At the legal basis level: Article 34 of the Criminal Procedure Law of the People's Republic of China (amended in 2018) stipulates that a criminal suspect has the right to appoint a defense attorney from the date of his/her first interrogation by the investigating organ or the date of the adoption of coercive measures; during the investigation, only lawyers can be appointed as defense attorneys; the investigating organ shall inform the criminal suspect of his/her right to appoint a defense attorney when conducting the first interrogation or adopting coercive measures. Article 39 of the Lawyers Law of the People's Republic of China stipulates the prohibition of conflict of interest rules. Crimes such as embezzlement, misappropriation of funds, and bribery of non-state employees are stipulated in the relevant articles of the Special Provisions of the Criminal Law of the People's Republic of China, and the specific characterization should be determined by the judicial organ based on the evidence of the individual case. At the practical advice level: executives should manage their personally signed documents separately from the company's files and keep copies; raise objections to obviously illegal and irregular orders in writing; contact a lawyer before accepting questioning or being summoned for questioning; and family members should contact a consultant lawyer to initiate a power of attorney as soon as possible and not "explain" matters to the case-handling organ on their own.

5. Henglue Law Firm's Reminder

The cruelty of criminal risks lies in their irreversibility: freedom, reputation, and career prospects are often re-evaluated during months of investigation procedures. Rather than seeking help everywhere after being summoned, it's better to establish a personal criminal legal advisor relationship when everything is going well - it serves as a compliance guardrail in normal times and a first line of defense in times of crisis. When selecting an advisory lawyer, focus on their practical experience in criminal defense, their familiarity with corporate operations, and their crisis response mechanisms. At the same time, note that there may be conflicts of interest between the company and individuals, so personal advisors should be independent of corporate advisors. If you or your family are facing related risks, it is recommended to seek help as soon as possible through legal channels.Special services and other case servicesOrBeijing Henglu Law FirmConsult and understand the specific arrangements for the connection between criminal compliance and defense.

Q1: What behaviors of executives are most likely to lead to criminal prosecution?

High-risk situations include: using one's position to appropriate company assets for personal gain or dispose of them privately (embezzlement); misappropriating company funds for personal use or lending to others (misappropriation of funds); accepting kickbacks from suppliers in procurement and bidding (bribery of non-state employees); falsifying performance data or accepting fraudulently issued VAT invoices; raising funds from the public in the name of enterprises or individuals (illegal public deposit-taking); and disclosing or failing to disclose important information in violation of regulations. Whether an act constitutes a crime depends on subjective intent, the manner of conduct, and quantitative standards. The same act may be characterized differently under different evidentiary circumstances. When in doubt, decision-makers should first conduct a compliance assessment and not comfort themselves with "industry practices".

Q2: The company has legal advisors. Do executives still need to hire their own lawyers separately?

Suggestions. The clients of corporate legal advisors are enterprises, and their duties are to safeguard the company's interests. When executives are under investigation, the company may not hire lawyers to defend them for reasons such as reputation protection and responsibility separation. If the investigation targets the company's decision-making, the interests of the company and those of the executives may even be directly conflicting. According to Article 39 of the Law of the People's Republic of China on Lawyers, lawyers are not allowed to handle matters involving conflicts of interest. At this time, corporate advisory lawyers are often unable to continue providing defense assistance to the executive in question. The clients of personal advisors are the executives themselves, and the content of the communication only serves to safeguard their personal rights and interests. The two sets of services cannot replace each other, and instead, they should maintain independence to avoid conflicts.

Q3: What do criminal law consultants usually do on a daily basis?

The daily tasks include: organizing a list of criminal risks corresponding to job responsibilities and updating it regularly; conducting criminal compliance assessments of major contracts, fund arrangements, and related transactions; providing guidance on how to respond to internal investigations and audit interviews within the company; organizing criminal risk training for employees and executives; and preserving decision-making evaluation opinions, which can serve as evidence of diligent performance of duties in the event of disputes. Crisis response includes: informing clients of their rights and arranging accompaniment after receiving summonses or notifications of assistance in investigations; communicating with family members and coordinating with attorneys; applying for bail pending trial; conducting preliminary communication with investigating authorities; and ensuring a smooth transition to criminal defense procedures. The frequency and depth of services can be specified as needed in the consulting contract, and it is recommended to elaborate on the crisis response clauses separately.

Q4: What can a consultant lawyer do when being summoned by the public security organ?

Before being summoned, lawyers can inform the summoned person about the summoning procedures, their rights and obligations during interrogation, and matters needing attention, such as the right to refuse to answer questions unrelated to the case and the right not to be forced to incriminate themselves. During the summoning period, family members can communicate with lawyers to make arrangements. If coercive measures are taken against the summoned person, lawyers can immediately handle formal authorizations to become defenders, intervene in the investigation stage in accordance with Article 34 of the Criminal Procedure Law of the People's Republic of China, meet with the client, understand the suspected charges and main facts, apply for bail pending trial, and put forward preliminary opinions on the innocence or lightness of the crime to the case-handling organ. The earlier the intervention, the more controllable the flaws in the statement and procedural risks will be. It is essential not to wait until the case has been "qualified" before seeking a lawyer's help.

Q5: How are the fees for criminal legal consultants usually calculated?

The common model is an annual advisory fee plus a separate fee for crisis response: daily compliance consulting, risk assessment, and training are included in the annual fee; once the investigation process begins, services such as meeting with clients, applying for bail, and defending in court are billed separately as criminal defense cases, typically based on the case stage (investigation, review and prosecution, first-instance trial), complexity, and the lawyer's seniority. When signing the contract, it is important to clarify the crisis response mechanism and fee arrangements to avoid delays in appointing a lawyer due to fee negotiations at critical moments. Additionally, it should be noted that risk-based fees are not allowed in criminal litigation representation, and quotes that solicit clients with "result guarantees" should be approached with caution. All fees must be paid into the law firm's official account.

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, to avoid missing the statutory time limit. →Intellectual property protection legal services·Beijing Henglu Law Firm