Most of the disputes that end up at a company’s courtroom door are in fact the delayed consequence of decisions taken long before proceedings were ever issued. A poorly structured supply contract, a board resolution not recorded in due form, or a carelessly drafted notice of termination returns months later as a serious financial burden. Corporate legal advice intervenes at precisely the first link in that chain: it is a continuing service relationship intended to place the undertaking’s activities within the framework drawn by legislation.
The scope of the service is not confined to giving opinions. Reducing commercial relationships to contract, preparing corporate documents, conducting negotiations, auditing regulatory compliance and, where necessary, pursuing a dispute before the courts are all carried out under the same roof. What distinguishes advisory work from classic litigation representation is timing: counsel does not wait for the problem to arise but seeks to reduce the likelihood of its arising in the first place. Litigation representation, by contrast, concentrates for the most part on resolving a dispute that has already emerged.
In this briefing note we examine, in turn, what legal counsel means, how preventive and remedial services differ, the principal areas of expertise offered to companies, the available routes to dispute resolution and the fee models encountered in practice.
What Is Corporate Legal Counsel?
Legal counsel is a professional support relationship that monitors the whole of an undertaking’s legal requirements on a continuing basis and seeks to minimise the risk of sanctions it may face. Counsel oversees the company’s daily workflow from a legal standpoint: drafting or reviewing contractual texts, bringing the operation of its decision-making organs into line with legislation and, where a dispute arises, determining the course to be followed.
This relationship has a second dimension. Counsel is not merely a restrictive supervisory mechanism; it also ensures that the opportunities, incentives and flexibilities arising from freedom of contract which legislation affords the undertaking are actually identified. A properly structured legal foundation can translate into a tangible competitive advantage.
Not every undertaking needs support of the same intensity. Volume of activity, headcount, the weight of sector-specific regulation and the presence of international relationships are the principal criteria determining the scope of the service. The common point, however, is this: a company whose legal footing has been soundly established is markedly better placed in terms of both sustainability and capacity for growth.
Preventive Legal Advice
Preventive advice rests on preventing a problem from arising rather than on resolving it. The undertaking’s routine activities are passed through a legal filter, high-risk transactions are identified in advance and the necessary measures are taken before any loss has occurred. The core components of this approach may be grouped under the following headings:
- Mapping and managing risks: the legal risks to which the undertaking may be exposed are identified and strategies are devised to reduce the likelihood of their materialising.
- Securing regulatory compliance: activities are monitored for compliance with the legislation in force, and practices giving rise to administrative sanctions and criminal liability are forestalled.
- Building the documentary infrastructure: contracts, protocols, internal policies and similar texts are either drafted from scratch or reviewed in their existing form and their deficiencies remedied.
- Regulating commercial and administrative relationships: every connection, from the employer–employee relationship to the supply chain, and from customer relations to the dealership structure, is placed on a legal footing.
- Answering day-to-day legal questions: doubts arising in the course of the workflow are swiftly resolved before a decision is taken.
- In-house training and awareness: briefings for staff embed legal awareness within the company, so that mistaken practices are prevented at source.
This work has a direct financial return. Litigation costs, damages payments and the time lost to a dispute are, in most cases, many times the cost of preventive measures. Particularly in commercial undertakings operating on a regular basis, securing compliance and reducing risk is a factor that directly affects business continuity.
The Relationship Between Remedial Advice and Legal Practice
Both services are directed at resolving an existing legal problem; the route they take and their scope, however, are not the same.
Remedial legal advice means providing opinions and guidance directed at resolving a dispute that has already emerged. A lawyer working within this scope may represent one of the parties to the dispute, manage the litigation process, or act as intermediary in concluding the disagreement through negotiation and mediation.
Legal practice, by contrast, describes a broader professional framework. A lawyer defends the client’s rights before the courts, prepares legal texts, conducts negotiations with the opposing party and appeals against the decisions handed down. Put briefly, legal practice is a profession encompassing both representation and advice, whereas remedial advice is a mode of that profession focused on problems that have already arisen.
Why Is Legal Counsel Necessary?
Relegating legal matters to second place usually produces consequences that are difficult to reverse for commercial undertakings. The contributions that a continuing advisory relationship makes to an undertaking may be summarised as follows:
- Long-term cost advantage: resolving a problem at an early stage is far more economical than litigation costs and substantial damages awards.
- Eliminating risk before it arises: potential disputes are identified in advance and costly conflicts are avoided.
- Protecting corporate reputation: a company that acts in accordance with legislation maintains its credibility in the eyes of its customers and business partners.
- Solutions structured by sector: since every field of activity has its own requirements, the service is shaped around the undertaking’s structure rather than around standard templates.
- Scope for rapid intervention in a dispute: producing a solution without losing time once a problem emerges prevents commercial activity from being interrupted.
- A strong position in the market: an undertaking whose legal uncertainty has been reduced negotiates investment and collaboration from a more advantageous position.
- Confidence at management level: the soundness of the legal footing reduces the concern of managers and employees about liability.
When all these elements come together, counsel ceases to be an item of expenditure and becomes an investment supporting the undertaking’s growth.
Principal Advisory Areas Offered to Companies
Legal counsel is tasked with identifying and resolving the problems the undertaking may encounter in the course of its activities. In this way the company can do business within legal limits, reduce its risks and prevent disputes from arising. The service headings most frequently requested in practice are examined below.
Company Formation and Governance
This heading covers guiding the undertaking from the moment of formation and managing the corporate matters that arise throughout its activity. Determining the appropriate company type, preparing the formation documents, negotiating contracts, regulating relations among shareholders and maintaining regulatory compliance during operations all fall within this scope. A properly constituted corporate structure prevents a significant proportion of the shareholder disputes that might otherwise arise later.
The formation process
- Conducting registration with the trade registry.
- Determining the company type appropriate to the activity (limited liability company, joint stock company and the like).
- Obtaining the tax identification number.
- Preparing the documents required for formation and submitting them to the relevant authorities.
Preparation of corporate documents
- Drafting the articles of association or revising the text in force.
- Preparing internal directives and rules relating to governance.
Continuing operational support
- Holding general assembly meetings in a manner compliant with legislation.
- Transactions relating to increases or reductions in capital.
- Drafting board of directors’ resolutions.
- Processes relating to a change in the company’s legal form.
Negotiation and relations between organs
- Conducting contractual negotiations aimed at preventing disagreements that may later arise among shareholders.
- Regulating the governing organs and the relations between them.
- Constituting organs such as the general assembly and the board of directors and managing their operation.
- Determining the rights and obligations attaching to shareholders.
Compliance, audit and reporting
- Designing programmes to secure the undertaking’s compliance with the regulations to which it is subject.
- Periodic auditing of regulatory compliance.
- Preparing legal reports and submitting them to management.
Data security
- Establishing the infrastructure and privacy policies relating to the protection of personal data.
Employment Law Advice
Employment law counsel aims to ensure that the undertaking discharges in full the obligations it owes to its employees, that employment relationships are placed on a written footing, and that actions for employee entitlements are avoided. Acting in accordance with legislation at stages such as recruitment, the setting of working conditions, disciplinary processes and the termination of the employment contract markedly reduces the risk of damages arising later. The principal work carried out in this field is as follows:
- Drafting notices of termination and the associated documents
- Adapting employment contract texts to current legislation
- Preparing formal warning notices to be sent to employees
- Completing personnel files
- Producing the written records required to be kept at the workplace
- Managing the processes relating to termination of the employment contract
- Guiding the human resources department in its day-to-day practices
Contract Law Advice
Contract counsel means providing legal support at the stages of reducing commercial relationships to writing, performing them and, where necessary, amending them. The aim is to produce texts that define the parties’ rights and obligations clearly, that facilitate proof should a dispute arise, and that align with statutory requirements. Where the course to be followed in the event of breach has been settled in advance in the contract, the time taken to resolve a dispute is also shortened.
- Drafting contractual texts and reviewing existing drafts
- Preparing partnership and collaboration protocols
- Preparing the contracts underpinning supply and employment relationships
Commercial Law Advice
Commercial law counsel ensures that the legislation governing the undertaking’s commercial transactions is correctly interpreted and applied. Structuring commercial agreements, obtaining the necessary permits and licences, observing competition-related restrictions and complying with consumer legislation are all assessed within this scope. Commercial activity is thereby sustained without interruption and financial risks are kept under control.
- Application of the statutory rules relating to commercial activity
- Obligations arising under competition legislation and consumer protection
- Legal requirements arising from electronic commerce
Tax Law Advice
Tax counsel is directed at ensuring that the undertaking correctly understands its tax obligations and acts in accordance with legislation. Since the position taken during examination and audit processes also determines the course of any action brought later, legal support at this stage is of particular importance.
- Providing legal guidance during a tax examination
- Managing discussions to be conducted with the tax authority
- Resolving problems that may arise from an examination report or an imposed penalty and setting out the available options
- Participating in settlement discussions held during the audit process
- Bringing an action for annulment against tax penalties imposed contrary to procedure and to statute
Other Areas of Corporate Legal Advice
Intellectual Property, Trade Mark and Patent Advice
Counsel in this field focuses on protecting the intangible assets the undertaking holds. Registering assets such as trade marks, patents, designs and copyright, defending the right in the event of infringement, and reducing licensing relationships to contract are all carried out within this scope. Protecting creative output and technological innovation means, in most sectors, directly protecting competitive strength.
- Registration and protection of trade marks, patents and copyright
- Pursuing legal remedies against infringements of intellectual property rights
- Preparing licence and collaboration agreements
Competition Law and Regulatory Advice
Competition counsel ensures that the undertaking’s conduct in the market complies with the relevant legislation. Identifying agreements that may be restrictive of competition, assessing the risk of abuse of a dominant position, and examining merger and acquisition transactions from the standpoint of the need for clearance all fall within this scope. Preparing the defence in the event that the undertaking becomes the subject of an authority investigation is likewise part of the service. The undertaking is thereby able to act in the market along a line compliant with both the law and ethical standards.
Information Technology Law Advice
As technology-based activity has gained weight, information technology counsel has become a distinct field of expertise. Protecting digital assets, securing data, establishing an appropriate legal framework for transactions concluded electronically and building the contractual infrastructure of software projects are all assessed in this field. Determining preventive measures against data breaches and cyber attacks is addressed within the same scope.
KVKK Compliance Advice
The Personal Data Protection Act No. 6698 (KVKK) has introduced binding standards as regards the processing, storage, security and use of data. Compliance advice manages from start to finish the process by which the company meets those standards.
Within this scope, existing data processing activities are examined, privacy notices and explicit consent texts are prepared, retention and destruction policies are established, the necessary technical and organisational measures are determined, and staff training is planned. At the end of the process the undertaking is in a position to process personal data in accordance with the Act and to discharge its statutory obligations.
Online Legal Advice
The spread of remote working models and digital business processes has made it commonplace for legal support to be delivered through online channels as well. Provided by video conference, email and other digital means of communication, this service allows undertakings to obtain a rapid opinion irrespective of physical distance. Particularly where an urgent decision is required, online advice substantially reduces lost time.
Resolving Companies’ Legal Disputes
Representation in Mediation and Litigation
If a dispute has arisen notwithstanding preventive measures, the process is then conducted through remedial services. At this stage the problem is characterised in legal terms, the course to be followed is determined and, where necessary, the litigation process is managed. Preparing legal texts, constructing the claim and the defence, representation at hearings and appealing all fall within this scope. The same support is provided in mediation and settlement discussions, which are routes to resolution outside litigation.
- Concluding disputes effectively and within the shortest possible time
- Conducting mediation and arbitration processes
- Determining the defence strategy to be followed at the litigation stage
Managing Enforcement and Debt Recovery Proceedings
Enforcement law counsel is directed at enabling the undertaking to recover through legal channels the receivables it has been unable to collect. Determining the receivable to be made the subject of proceedings, preparing the enforcement file, managing the attachment and sale stages, and bringing the actions required against the debtor’s objections are all carried out within this scope. Since the orderly operation of debt recovery directly affects the undertaking’s cash flow and hence its financial stability, this service is among the priority headings for most companies.
Legal Advisory Fees
The legal advisory fee is the sum an undertaking pays in return for the legal service it receives. The scope of that sum includes giving opinions, drafting contracts, reviewing documents, conducting litigation and all similar work.
The fee may be set differently for each undertaking, since the intensity and nature of the service vary from company to company. The sum is fixed by a contract made between the parties and, as a rule, drawn up in writing. That contract further sets out which services will be provided, how frequently advice will be given and how the payment arrangements will operate. Clarifying the scope and the sum before the service relationship is established prevents disagreements that might otherwise arise later.
How Is the Fee Determined?
In fixing the sum, factors such as the scope of the work, the expertise it demands, the time to be spent and the value of the dispute are assessed together. There is, however, a floor here: no sum may be agreed below the amounts provided for in the Minimum Attorney Fee Tariff prepared by the Union of Turkish Bar Associations and published in the Official Gazette.
Subject to that limit, fees may be structured on different models according to the undertaking’s needs. The parties may choose one of the methods below or adopt a hybrid model combining them.
Payment Models
Fixed monthly fee
This is the most widespread model in practice. The parties agree on a particular sum, generally paid in monthly instalments, and advisory services are provided in return for the agreed period. The model’s principal advantage is predictability: the undertaking can plan its legal budget in advance. This is the method preferred by companies requiring continuing support.
Hourly fee
Under this model the sum is calculated on the basis of the time spent on the service. As the hours worked increase, so does the amount payable. Since the complexity and duration of the work are reflected directly in the sum, it is suited to short-term or discrete matters of defined scope. In practice the time spent is recorded regularly and invoiced periodically.
Project-based payment
This rests on agreeing a fixed sum at the outset for a particular matter, action or project. It is used where the scope can be defined clearly in advance and makes it easier to keep the budget under control. Merger transactions, one-off compliance projects and contract packages of defined scope are examples suited to this model.
Success fee
Under this method payment is tied to the matter or the action being concluded in the client’s favour, and is generally agreed as a given percentage of the value obtained. Because it is indexed to the outcome, it arises particularly in relation to receivables whose recoverability is doubtful and in high-value disputes.
Structuring the Advisory Relationship
Whether a corporate legal service operates effectively depends on the team providing it knowing the undertaking. In a relationship in which the business model, the growth objectives and the sector-specific requirements have not been grasped, the opinions produced will struggle to find application in practice even where they are correct on paper.
For this reason Independent Legal structures the advisory relationship not as a standard service package but as a working arrangement shaped around the undertaking’s operational structure. Lawyers practising in different fields of law working together makes it possible to address in an integrated manner those matters at which areas such as commercial, employment, tax and intellectual property law intersect.
Independent Legal’s Assessment
Corporate legal counsel is, in practice, a service to which recourse is often had too late. Undertakings generally consider establishing an advisory relationship only after receiving a formal notification, after proceedings have been issued, or after encountering an administrative sanction. By that stage, however, the scope for intervention has narrowed and the window in which the risk could have been prevented has closed. Because the value of legal support remains invisible in the disputes it prevents, it is frequently underestimated.
Clarifying the scope at the outset when establishing a continuing advisory relationship is at least as important as the service itself. Where it is not settled in writing which matters fall within the scope of the advice, which will be charged separately and how frequently reporting will be carried out, the relationship itself may turn into a source of dispute.
When a corporate legal service is being structured, it is appropriate to pay particular attention to the following points:
- Setting out clearly in the advisory contract the scope of the service, the fee model and the payment schedule
- Assessing contractual, human resources and tax processes as an integrated whole rather than separately
- Taking an inventory at the outset of the sector-specific regulations to which the company is subject and of its KVKK obligations
- Keeping the records and documents relating to the operation of the decision-making organs in good order, so as to strengthen the evidential footing against shareholder disputes
- Creating standard contract templates for recurring commercial relationships, so as to shorten negotiation time
- Assessing in advance, in terms of cost and time, the routes to resolution outside litigation once a dispute arises
Independent Legal provides advisory and litigation services across the whole process of corporate legal counsel for companies, from establishing the corporate structure through to pursuing disputes.