Tiếng Việt
中文 (中国)
日本語
In the context of a rapidly developing market economy and increasing international integration, alongside new opportunities, Vietnamese businesses are also facing many challenges in their operations. One of the challenges is the timely update and compliance with Vietnam’s diverse and complex legal system.
In such a situation, seeking legal advice from specialized units has become an optimal solution for all businesses. This article will analyze in detail the crucial role of legal consulting in Vietnamese businesses today.
Ensuring Legal Compliance and Minimizing Legal Risks
All issues related to the establishment, operation, and activities of Vietnamese businesses are governed by a diverse legal system, including various fields such as corporate law, commercial law, labor law, tax law, environmental law, etc.
One of the main roles of legal consulting is to support businesses in ensuring compliance with legal regulations. Lawyers and legal experts are tasked with providing information, guidance, and assistance to businesses in developing internal policies and processes to ensure legal compliance.
The importance of legal consulting activities stems from the mandatory requirement for all businesses to comply with the law, not only to maintain operations but also to build reputation and ensure sustainable development. Non-compliance can lead to severe consequences, including administrative penalties, suspension of business activities, loss of corporate reputation, or even criminal liability for the business and related individuals.
One of the most talked-about cases in 2017 was the scandal involving Khaisilk Corporation – a well-known silk brand in Vietnam. The cause was the company’s negligence in not seeking legal advice from reputable units on product origin, leading to the discovery that Chinese products were being sold under the “Made in Vietnam” label.
The incident not only marked the end of the brand’s reputation with consumers, forcing Khaisilk to destroy products, but the company and related individuals also faced administrative penalties and criminal prosecution. According to lawyers, these consequences could have been entirely avoided if the company had sought effective legal consulting from the beginning to understand and correctly implement legal regulations, avoiding violations and protecting the brand’s reputation.
Supporting Contract Negotiation and Transaction Establishment
Contracts are an essential part of every business’s operations. They not only record agreements and commercial transaction terms but also serve as a legal basis requiring parties to fully bear legal responsibility. Therefore, a clearly drafted, detailed, and legally compliant contract will help minimize legal disputes, protect the legitimate rights and interests of the parties, and ensure the effective enforcement of all agreements.
To have a complete contract, businesses need legal support from the negotiation and drafting stages. Lawyers will provide legal opinions on contract terms in a detailed, clear, and comprehensive manner, including important clauses such as the rights and obligations of the parties, payment conditions, confidentiality clauses, dispute resolution clauses, etc. This ensures that the contract accurately reflects the will of the parties and complies with current legal regulations.
Before signing, reviewing the contract is crucial to ensure no clause is unfavorable or unclear. Lawyers will thoroughly examine each clause, identify potential risks, and propose amendments to protect the business’s interests. Lawyers can also participate in contract negotiations to ensure fair and reasonable terms are agreed upon. With their experience and legal knowledge, lawyers will make suitable proposals, minimize potential disputes, and achieve the best agreement for the business.
Some of the most prominent acquisition deals in Vietnam include Thaco’s acquisition of the “hypermarket” Emart, or Masan Group’s acquisition of the VinCommerce retail chain from Vingroup in 2019. These are significant deals that achieved great success thanks to the legal teams’ consulting on both sides. Lawyers participated in drafting and reviewing the transfer contracts, ensuring that all terms were clear, detailed, and compliant with the laws of the involved countries, including Vietnam.
The Impact of Legal Consulting on Business Operations
Legal consulting helps businesses build and maintain an effective management system, including establishing internal regulations, operational processes, and monitoring mechanisms. This not only helps businesses operate transparently and clearly but also increases trust and credibility with partners, customers, and related parties.
Similarly, in a fiercely competitive business environment, good legal compliance and risk management also help businesses build a professional image, creating a brand and trust in customers’ minds. This not only helps businesses maintain their market position but also opens up many cooperation and development opportunities.
Legal consulting does not only stop at solving daily legal issues but also plays a crucial role in supporting businesses in building and implementing long-term development strategies. Lawyers can provide analyses and recommendations on legal risks and opportunities, helping businesses make smart and effective decisions.
In conclusion, legal consulting is essential for Vietnamese businesses to navigate the complexities of the legal landscape, ensure compliance, minimize risks, and support sustainable growth and strategic decision-making.
Challenges and Solutions in Using Legal Consulting Services in Vietnam
Awareness of the Role of Legal Consulting
Many businesses, especially small and medium-sized enterprises (SMEs), often do not fully recognize the importance of legal consulting services. These businesses often view legal consulting as an unnecessary expense rather than an investment to protect and grow the business. This leads to businesses only seeking legal advice when they encounter serious problems, rather than having a preventative plan from the outset.
To address this issue, it is crucial to promote and train businesses to enhance their awareness of the role of legal consulting. Business associations, professional organizations, and government agencies can collaborate to organize seminars and specialized courses related to legal consulting in businesses. From this, businesses will better understand the importance and significant benefits of fully implementing legal consulting in their operations.
Cost of Legal Consulting Services
For businesses with a need to use legal consulting services, the biggest concern is the often high cost of hiring legal consultants, especially for SMEs. In the process of business development that requires optimal resource allocation, it is common for businesses not to invest in the legal aspect.
However, businesses need to understand that the legal field is extremely specific and can affect the entire operation and development potential of the business. If businesses are hesitant to pay a high cost for hiring lawyers, they can consider solutions such as partnering with small and medium-sized law firms, using online legal consulting services, or hiring in-house lawyers, with annual lawyer fees offering better rates.
Additionally, Vietnam needs to have government policies to reduce the cost burden for businesses in accessing legal consulting services. Achieving this would minimize the number of businesses committing violations, thereby helping the government better control the activities of the private sector.
Quality of Legal Consulting Services
The quality of legal consulting services in Vietnam is still uneven. There are many reputable, high-quality law firms and lawyers, but there are also cases of poor-quality, unprofessional services.
The legal consulting service market in Vietnam is diverse, with many law firms and lawyers operating. However, not all of them have good and reputable service quality. Businesses often face difficulties in finding and choosing a legal consulting partner that suits their needs and financial capacity.
Therefore, businesses should establish a mechanism for evaluating and selecting legal consulting partners based on clear criteria such as experience, expertise, reputation, and feedback from previous clients. This helps businesses choose the right partner, ensuring service quality and avoiding risks related to choosing an unreliable partner.
In cases where businesses have their own legal departments, it is necessary to create conditions for their legal staff and managers to attend legal training courses to improve their knowledge and skills. Simultaneously, businesses should build a close cooperative relationship with lawyers, regularly exchanging information and updating legal changes, thereby making the working process effective and achieving the best results. One common form of relationship between law firms and businesses is through Retainer Legal Consulting Services, also known as Outsourced Legal Services which are also provided by our law firm ASL LAW.
Conclusion
In the context of Vietnam’s increasingly developing economy and strengthened international integration, legal consulting has become an important and indispensable factor for all businesses. Using legal consulting services not only helps businesses comply with the law, reduce risks, but also enhance management efficiency, increase competitiveness, and support strategic management.
However, to fully leverage the benefits of legal consulting services, businesses need to raise awareness, choose reputable partners, and have reasonable cost management measures. Only then can legal consulting truly become a solid “launchpad,” helping Vietnamese businesses develop sustainably and succeed in a challenging business environment.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for in-depth legal advice in Vietnam and internationally. If you need any advice, please contact us for further information or collaboration.
