Consultation with counsel: Overview, definition, and example
What is consultation with counsel?
Consultation with counsel refers to the process of seeking legal advice from an attorney before making decisions that have legal consequences. Businesses and individuals consult with counsel to understand their rights, obligations, and risks before signing contracts, handling disputes, or making regulatory decisions.
For example, a small business owner might consult with an attorney before signing a long-term lease to ensure the terms are fair and legally sound.
Why is consultation with counsel important?
Consulting with legal counsel helps businesses avoid costly mistakes, ensure compliance with laws, and make informed decisions. Without proper legal advice, a company may unknowingly agree to unfavorable contract terms, expose itself to legal risks, or fail to comply with regulations.
For SMBs, legal consultation is especially important when entering agreements, resolving disputes, or navigating complex legal issues. While hiring an attorney may seem like an extra expense, it can prevent larger financial and legal problems in the future.
Understanding consultation with counsel through an example
Imagine a business owner considering a partnership agreement with another company. Before signing the contract, they consult with a lawyer who identifies clauses that could lead to financial risk. The lawyer advises on negotiating better terms, protecting the business from future disputes.
In another case, an entrepreneur receives a cease-and-desist letter claiming trademark infringement. Instead of responding immediately, they consult with legal counsel to understand their rights and the best course of action. This prevents unnecessary legal liability and helps them resolve the issue strategically.
An example of a consultation with counsel clause
Here’s how a consultation with counsel clause might appear in a contract:
“Each Party acknowledges that it has had the opportunity to consult with legal counsel before entering into this Agreement. No provision of this Agreement shall be interpreted against either Party due to their decision to seek or not seek legal counsel.”
Conclusion
Consultation with counsel is a critical step in making legally sound business decisions. For SMBs, seeking legal advice before signing contracts, handling disputes, or making regulatory decisions can prevent costly mistakes and protect business interests. By incorporating a consultation with counsel clause in agreements, businesses reinforce the importance of informed decision-making and legal due diligence.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.