Establishing Legal Departments in Companies

 

According to a Harvard Business Review statistic published in 2020, several U.S. companies lost millions of dollars due to their failure to establish legal departments and to engage specialized lawyers capable of providing effective legal advice that protects corporate interests.

Objectives of Establishing a Legal Department in Companies

The legal department system in companies aims to achieve the following objectives:

  • Providing the necessary legal support to the company from the initial stages of its establishment.

  • Reviewing administrative decisions and ensuring their compliance with applicable laws and regulations, while safeguarding the legality of business operations.

  • Facilitating the defense of the company’s rights before all courts and competent judicial authorities.

  • Reaching optimal legal solutions for all activities and operations carried out by the company.

Key Functions of Legal Departments in Companies

  • Drafting executive bylaws and internal regulations that comply with labor laws and applicable regulations in the Kingdom.

  • Supervising the compliance of managers, administrators, employees, and all staff members with such regulations.

  • Following up on all cases related to the company and defending its rights and assets before courts and judicial authorities.

  • Providing legal advice on decisions and procedures adopted by the company and ensuring lawful business conduct.

  • Developing legal strategies that provide comprehensive protection for the company.

Importance of Empowering Legal Department Systems in Companies

The importance of an effective legal department system includes:

  • Obtaining appropriate legal advice regarding labor law and corporate regulations in general.

  • Drafting and reviewing all contracts entered into by the company, as well as drafting financial and administrative regulations.

  • Registering trademarks and patents and protecting the company’s intellectual property.

  • Protecting the company from penalties, financial fines, and similar legal risks.

  • Representing the company before courts and judicial authorities and defending its rights and assets.

  • Enhancing legal awareness within the company.

Our Legal Department Establishment Services

  • Establishing legal departments for all governmental and private companies of various types.

  • Developing legal department regulations and systems in compliance with Saudi laws and labor market requirements.

  • Providing legal support from the company’s inception, including supplying specialized legal staff, legal consultations, drafting administrative manuals and guidelines, and preparing bylaws.

  • Reviewing administrative decisions and ensuring compliance with applicable laws and regulations.

  • Drafting and legally reviewing all contracts, agreements, memoranda, and internal regulations.

  • Following up on legal cases in which the company is a party.

  • Representing companies and institutions before courts and competent judicial authorities.

  • Resolving disputes between the company and related parties such as clients, employees, and management.

  • Managing legal expenditures, analyzing internal and external costs, managing contracts, tax litigation services, and providing periodic legal performance reports.

  • Managing legal documentation in accordance with the highest security standards for storing confidential data and limiting access to authorized personnel only.

  • Implementing integrated legal operational solutions to improve efficiency, enhance productivity, achieve corporate objectives, and gain a competitive advantage.

  • Developing legal department systems to protect corporate interests, reputation, and customer trust.

How to Choose a Professional Legal Department Lawyer

Key criteria for selecting a specialized legal firm include:

  • Extensive professional and academic experience.

  • Strong reputation and continuous alignment with global best practices and legal developments.

  • Recommendations from previous clients with proven experience.

  • Effective and transparent communication with clients, including regular updates on legal matters and developments.

  • Prompt response to client inquiries, particularly in matters that require urgent legal attention.

  • Availability of specialized legal teams and clarity of provided services in line with company needs.

  • Utilization of advanced technologies and digital systems to deliver legal department services efficiently.

Our Methodology for Establishing Legal Department Systems

Establishing a legal department requires developing a tailored strategy after thoroughly understanding the company’s internal business operations, including its type, size, scope of activities, and industry. This enables us to appoint suitable legal professionals and establish a legal department system that meets the company’s specific needs.

Companies in the Kingdom of Saudi Arabia vary in structure and include general partnerships, joint stock companies, limited liability companies, limited partnerships, cooperative companies, partnerships limited by shares, and others. Each type has its own legal requirements, based on which we design and implement the appropriate legal department system.

Key Sections of a Corporate Legal Department System

A legal department system typically includes several divisions covering all legal aspects of the company, including:

  • Legal Advisory and Opinions Division

  • Legal Studies, Research, and Projects Division

  • Contracts and Agreements Division

  • Legal Transactions Division

  • Litigation and Disputes Division

  • Investigations Division

  • Judgment Enforcement Follow-up Division

It is worth noting that legal department systems and their divisions should be continuously developed and updated. Such development significantly contributes to a company’s competitive advantage, strengthens its reputation, and enhances its standing among competitors and clients, ultimately achieving the company’s highest strategic objectives.