LAW IN BUSINESS. PREVENTIVE LAW.

A person who is involved in business is also involved in the law concerning business. Making contracts and using negotiable instruments – both of which are legal concepts – are the essence of business. While business and law have traditionally been closely associated, the importance of law to business has greatly increased in the past several years. This is reflected in the rapid increase in the use of lawyers by people in business. The number of lawyers working within corporations, and primarily serving business, has grown at a corresponding rate. Even the smallest businesses frequently use lawyers.

In the past quarter-century there has been a qualitative as well as quantitative change in the concern of business managers with law. In earlier times business managers generally employed lawyers only in emergencies. A lawyer might be hired if a business was sued, if a debt could not be collected, or if a supplier's goods were defective and no settlement could be reached. Today, business managers also employ lawyers to help them plan to avoid such emergencies and to comply with the rapidly growing mass of legal rules imposed on business operations by government bodies. This use of lawyers by business people is called preventive law.

The objectives of preventive law are to arrange business plans and methods to increase profits by (1) avoiding losses through fines and damage judgements and (2) reaching business goals through enforceable contracts while avoiding government prohibitions. By involving a lawyer in the business planning process, an intended business objective can be reached with less legal risk. Preventive law further aims to minimize the possibility of failure if the business has to go to count to enforce its rights.