The so-called internal control refers to the division of functions, management system, work flow and work form designed, formulated and implemented by various functional departments to ensure legal and compliant operation, asset safety, effective management and fair financial report. The goal of internal control of the company is to ensure that the company's business activities conform to and comply with the requirements of laws, regulations and industry standard documents, to ensure the safety of the company's assets, to ensure that the company's management efficiency can be fully brought into play, to maximize the shareholders' goals, and to ensure that all documents and reports submitted by the company are reliable and accurate.
The Ministry of Justice, the company's internal audit department and external certified public accountants pay different attention to internal control. The Legal Department pays more attention to the prevention of legal risks and operational risks of the company, the Internal Audit Department pays attention to whether the internal control of the company can protect the safety of the company's assets, and the CPA pays attention to the influence of the internal control of the company on the reliability of financial reports from the perspective of audit risks. Although the focus of the three is different, the purpose of improving the management efficiency of the company and preventing the legal risks of the company's operation through internal control is the same.
The Legal Department's attention and evaluation of the company's internal control is based on the following principles:
Whether the design of internal control complies with the provisions of laws and regulations;
Whether the design of internal control is perfect and there are no major defects;
Whether the internal control is effectively implemented;
Whether relevant records are obtained and kept when executing internal procedures;
When negotiating with customers, the sales department shall keep all customer authorization documents, qualification documents, inquiry materials, customer technical requirements, correspondence between the two parties, letter of intent, memorandum, formal contract text and supplementary agreement. When communicating with customers, the sales department should keep the original or e-mail copy of fax documents according to the workflow, and keep telephone records when receiving telephone inquiries and complaints from customers. When urging customers to collect money, the sales department should keep dunning letters and emails.
Cooperation between the legal department of the company and the legal adviser
The intention and purpose of the company's establishment of the legal department focuses on the company's internal control level, while the purpose of external legal counsel is
1) I hope to get independent and objective advice from legal counsel on specific matters;
2) I hope to get the professional service support of legal counsel for specific litigation or non-litigation cases;
3) Provide professional guidance for the work of the company's legal department.
Therefore, the legal department has the responsibility to assist the company's legal counsel in business.
I sometimes chat with friends who do business online. Some of them are very dissatisfied with the company's legal counsel, thinking that the company gives them tens of thousands of dollars a year, but in fact they do most of the work of legal counsel. Sometimes a case, from evidence to documents, is drafted by the company's legal affairs, and the legal consultant only gives it once, but the company has to pay a large consulting fee. My advice to them is that their legal department should establish a process of cooperation with the company's legal counsel. If the respective responsibilities of the Legal Department and the legal counsel and their cooperative relationship are not clear, either the legal counsel will do nothing in the company's litigation activities and become a data copier, or they will buy food, cook and serve, and the legal counsel will become a special guest.
The quality of legal counsel's work determines whether the company will benefit or suffer, and the legal department is hard to blame when it comes to accountability. If you are the company's legal specialist, my advice to cooperate with legal counsel is:
1, objectively evaluate the professional ability of legal counsel and report to the competent department;
2. Maintain working communication with the legal adviser and keep all working documents together with the legal adviser;
3. Actively assist the work of legal counsel, but keep professional thinking and analysis.
A position in the company's legal department
There are ways to make money. Many people live, but few eat.
Those who are sick, those who use them, those who are suitable, and wealth remain unchanged.
-the golden mean
I quote The Doctrine of the Mean as the beginning of this chapter, which you may think is too far from the point. In fact, for profitable companies or institutions, it is the company's business goal to maximize shareholders' rights and interests on the premise of ensuring the safety of their own assets. How can we achieve this goal? I think this sentence of our ancestors is the guiding ideology. If you run a company, the capital inflow is more than the capital outflow, which is efficient in creating wealth and slow in consuming resources. Such a company can of course be "rich and unchanged". The problem is that many companies can forge ahead when they start their own businesses. However, when the first bucket of gold was dug, it became inefficient, the organization was bloated, the staff was bloated, the company's internal friction was serious, and internal control was lacking. Under many risks, it finally went bankrupt and liquidated. Just as the old saying goes, "its prosperity is also rich, and its death is also sudden."
The company's intention to set up a legal department
In newly established small and medium-sized companies, the departments of production, technology, sales and finance are generally the bosses' most concern. Because these departments can directly bring benefits to the company. Especially the manager of the sales department or the backbone of the business, their duty is to turn the company's products into funds and let these funds flow back to the company. Therefore, when allocating company resources, the sales department will easily get higher priority than any other department. Other departments of the company, such as administration department, purchasing and warehousing department, human resources department, information center, quality inspection department, director's office and general manager's office, all belong to the expense center. Compared with the arrogant warriors in the sales department, managers and supervisors in these departments should keep a low profile in meetings. Ha ha. Actually, this is not a good phenomenon. A wise boss will balance the power of all departments in the company, and will not let any department override other departments, nor will employees at any level infringe on the authority of the boss.
When the company's business develops to a certain extent, the initial employees who started business with the bosses gradually fade out or marginalize, and the bosses will re-examine the company's business processes, pay more attention to the compliance and sustainability of business operations, and pay more attention to the protection and consolidation of the achievements already made. Therefore, the bosses have enough reasons and the company has enough funds to support the establishment of a pure cost center-the legal department.
I probably belong to a person who likes to ask why, so I think it will help you start working in this department and broaden your career prospects in this company to find out why the company set up the legal department before applying. In my opinion, the boss of the company decided to set up the legal affairs department, mainly based on the following considerations:
Avoidance and prevention of legal risks in company operation.
The external cause of the company's gradual transformation from extensive operation to process operation is that the company has completed the original accumulation of capital, and the internal cause is that the decision-makers gradually realize that it is more difficult to stay in business and start a business. Generally speaking, in the start-up stage of a company, all kinds of forces are concentrated on the establishment and start-up of the company, and many contradictions will be temporarily hidden because of the coordination and authority of the leaders. In the start-up period, the company pays attention to efficiency first, easily ignores the construction of the system, and is not good at paying attention to the fair interaction between employees and decision makers. The sales department of the company will take a centralized approach to occupy the market, which will cause a lot of bad debts while occupying market share. In short, various internal and external contradictions in the company's operation will erupt when the company enters a period of stable development. The boss of the company will feel that a large number of legal affairs cannot be handled in time, and the company's operation faces legal risks. Therefore, the company will set up a legal department at this time to avoid and prevent legal risks in the company's operation.
Standardize the company's operation process.
Another purpose of setting up the legal department is to improve the management level of the company. In a company with perfect processes, the legal department is an indispensable department in each process. For example, the company's human resources management process, document contract review and approval process, accounts receivable collection, raw material procurement and other processes, we can not lack the work of professionals in the legal department. For example, the recent trademark dispute between Wang Lu and Jiuluwang may eventually lead to the disaster of Jiuluwang Company. This case will remind many enterprises that there should be a perfect management process for intellectual property protection of enterprises, including trademark application, monitoring and transfer, application and identification of famous trademarks, discovery of trademark infringement and rights protection, and other aspects of enterprise intellectual property management process should be formulated and implemented. In addition, many operating procedures of the company are drafted by the Legal Department and announced and implemented by the decision-making level. In fact, the operation process and management system of an enterprise are very different. We often equate the system with the process, and only the system has no process, which leads to many loopholes in enterprise management.
Restrict and assist other departments of the company to perform their functions.
How can we restrict each other? The easiest way is for you to do it and I'll see. Can the legal department effectively restrict the functions of other departments of the company? I think it can be done through the process. The simplest process is that the contracts signed by various functional departments need to be reviewed by the Legal Department before being submitted to the General Manager for signature and seal. This can effectively supervise the functions of the sales department, the purchasing department and the administrative department in signing contracts with foreign countries, reduce collusion and fraud, and damage the rights and interests of the company. The legal department has no right to negotiate with customers and cannot directly contact the other party to the contract. So the possibility of systematic fraud is relatively small. It is suggested that the Legal Department should participate in business negotiation and agreement drafting from the beginning, which seems to improve work efficiency, but in fact it will weaken or lose the function of supervision and restriction on other departments of the company, which will easily lead to systematic fraud and bring great losses to the company. The company's legal commissioners are people with professional legal skills, who can assist the work of relevant functional departments. For example, the legal department can assist the technical department to apply for patent or software copyright protection for the newly developed products. For another example, the legal department can assist the purchasing department to review the qualifications of qualified suppliers and investigate the business reputation of the partners. If the company's temporary lease and investment operation are only carried out by the personnel of the administrative department or the financial department, and lack of due legal analysis opinions, investment risks are likely to occur.
Fight against violations of the legitimate rights and interests of the company.
If the company has a large number of unrecoverable accounts receivable, the trademark patent rights are fraudulently used by competitors, employees constantly file labor dispute arbitration, and the purchased raw materials have various quality problems, or are often punished by various institutions in the name of fines. Bosses have no energy to do business. The legal department can fight back against these violations of the company's rights and interests and solve these thorny and time-consuming problems for the bosses. Not every case needs an outside lawyer. In fact, the Ministry of Justice does not need to hire a lawyer for litigation or non-litigation work with clear facts and simple cases. The Law Commissioner is trained as a lawyer and fully competent. For other acts that infringe on the interests of the company, the responsibility of the Legal Department is to conduct legal analysis and put forward handling opinions for the reference of decision-making departments.
A position in the company's legal department
Whether the legal department is valued in the company depends on its position in the organizational structure of the company on the surface, but actually depends on the scope of authority granted to the department by the decision-making level. Therefore, when lawyers from different companies chat together, they will find that even if the positions are equivalent and the wages are equivalent, the positions in the company are actually different. Some legal commissioners will be "awed" by all departments of the company, because they have the right to veto projects and attend the meeting of the company's highest decision-making, while some legal commissioners are despised by all departments. In addition to being constantly urged to copy the contract text, I have to call again and again to collect the bad debts that the sales department can't collect. The same position, one side is flame, the other side is sea water, hehe. As far as I know, the establishment of the Ministry of Justice has the following situations. Let's look at the positions of the legal department in different companies:
Legal Department (Business Functional Department) under the Horizontal Framework
This is a common way to set up a legal department. Under this organizational structure, the level of legal department is parallel to other business functional departments of the company, and the rank and salary of department heads are the same as those of other business departments. It may belong to a vice president in charge of administrative human resources. The scope of authority is close to handling the daily legal affairs of the company.
The management intention of this structure is to position the legal department as a business functional department, which is responsible for the daily legal affairs management of the company. This department is not responsible for the company's legal risk assessment, major legal decisions and suggestions, but has the responsibility to implement or assist in the implementation of the company's decisions.
The disadvantage of this structure is that the legal department cannot effectively supervise and restrict other departments of the company because of its low level, and it is difficult to play a role in the company's major business decisions because of its daily work.