Legal issues tend to show up when something’s already gone wrong. A contract falls apart. A regulator knocks. A dispute flares up. That’s when legal gets called in – and usually under pressure.
But this reactive model doesn’t work anymore. In today’s business environment, legal thinking is no longer a clean-up operation. It’s a core part of effective management. When embedded early, legal strategy supports faster growth, clearer decisions, and more resilient operations.
Treating it as an afterthought is when things unravel.
Legal is how strategy becomes real
Managers often talk about making bold decisions, moving quickly, or scaling teams. But underneath all that is a framework that holds it together – and much of that framework is legal. It might not sound exciting, but it is completely essential.
Whether you’re hiring internationally, signing complex commercial deals, protecting IP or navigating data protection rules, legal isn’t an add-on. It’s how you make decisions that stand up. When it’s missing or sidelined, cracks start to form. We’ve seen that happen on a dramatic scale.
Take Carillion. The UK construction giant collapsed in 2018 with billions in liabilities. Parliamentary reports flagged a toxic combination of governance failure, financial misreporting, and senior leaders who ignored warning signs. But what really stands out is how sidelined legal and compliance were – not empowered, not heeded, and certainly not embedded into core decision-making. The result was that a company imploded, thousands lost jobs, and the Government had to step in. Not something you want to see.
The message is simple: legal and governance functions only work if management makes space for them.
Legal isn’t about saying no but asking what’s possible
One of the reasons legal gets left until last is that it’s seen as a blocker. The “you can’t do that” voice in the room. But in businesses where legal is integrated early, the dynamic is completely different.
The best legal advisors help managers ask better questions: What’s the cleanest way to structure this partnership? How do we make this contract scalable? How do we enter a new market without doubling our risk?
At Enron, those questions weren’t being asked. Legal concerns were raised – internally and externally – but ignored by leadership chasing short-term gain. Structures were set up to hide debt, inflate earnings, and mislead investors. By the time regulators stepped in, the damage was irreversible. 20,000 people lost their jobs, billions were wiped from pensions, and trust in corporate governance took a hit that’s still felt today.
The issue isn’t whether legal advice was available – it’s whether leadership was willing to use it.
Managers need legal literacy, not a law degree
You don’t need to be a lawyer to lead well, but understanding where legal risk sits – and knowing when to bring in support – is a vital part of the modern manager’s toolkit.
That might mean:
- Spotting red flags in contractor relationships
- Knowing when an NDA isn’t enough to protect IP
- Asking the right questions during hiring or offboarding
- Understanding the legal impact of a data breach, not just the technical fix
Clarity is critical. Contracts shouldn’t be vague. Employment policies shouldn’t leave room for interpretation. Commercial terms shouldn’t create confusion. But to the untrained eye they do, which is why expert legal insight is so key.
Legal doesn’t need to be full-time to be full value
For SMEs and scaleups, hiring a full-time legal director might feel out of reach and retainers at law firms can be expensive. But the rise of fractional General Counsel – senior lawyers with commercial expertise and experience, working part-time in your business – is changing that. We’ve seen it in finance and marketing, but law seems to have been slow to catch up.
This approach gives managers access to someone who knows the business, understands its risk profile, and can contribute to strategic planning. Not a one-off fixer, but a trusted voice in the room. Managers get support when planning new initiatives, not just when problems land on their desk. And that makes it easier to act early – rather than scramble for solutions once the damage is done.
Making legal part of the culture
To truly embed legal thinking into management, the shift needs to be cultural as well as operational. That means:
- Encouraging teams to raise legal questions early, not only when things go wrong
- Normalising check-ins with legal or compliance as part of project planning
- Providing legal literacy training for team leads
- Creating feedback loops so learnings from past issues inform future decisions
This isn’t about slowing down with red tape. It’s about moving faster because the path is clear. The best counsel is enabling.
Legal isn’t a luxury, it’s infrastructure
The fall of Enron and the collapse of Carillion might be extreme examples, but they do serve as stark reminders that legal frameworks matter. Ignoring them isn’t a shortcut you can get away with. It’s a risk multiplier.
Managers today are juggling performance pressures, regulatory shifts, hybrid workforces, and rapid change. Legal thinking helps you navigate these areas by having someone on your side looking after the detail.
So the next time a manager launches a new partnership, expands a team, or signs off on a campaign, they should ask not just, “Is this a good idea?” – but, “have we got the legal piece right?” Because when legal is built into the foundations, everything else is more solid.
