The question in the wrong order
The question companies ask is "should we retain a lawyer?" — which cannot be answered, because it skips a step.
The answerable question is what has the business already committed itself to? Legal exposure does not scale with revenue. It scales with the number of promises made to other people: to customers, to suppliers, and to employees.
A company with high revenue that sells for cash, delivers immediately, and employs nobody permanently carries less exposure than a smaller one with thirty employees, credit terms with ten suppliers, and a contract template downloaded from the internet.
Three signals that the moment has arrived
One — legal questions are sitting unanswered. If, in a given month, sales or HR had to decide something without being sure it was correct and went with instinct, exposure is accumulating that nobody is counting.
Two — old documents are being used for work that has changed. The template written when the company only sold goods tends to survive into the period when it also sells services, even though the delivery, warranty and ownership clauses do not transfer between the two.
Three — things are arriving with deadlines attached. Demand letters, labour inspector orders, and correspondence from regulators all start their clock on the day they are received, not on the day the company finds a lawyer.
What belongs in the retainer agreement
Agreements that work in practice tend to be short, but they answer four things clearly.
Included scope — stated as categories of work rather than an exhaustive list of everything possible: answering queries, reviewing incoming contracts, issuing correspondence.
The line where separate work begins — drafting a full new agreement, attending off-site negotiations, filings with authorities, and appearing in court. Left unstated, the two sides will discover they disagree in month three.
Named responsibility and response times — a named lead, an agreed channel, and separate windows for routine and urgent matters.
Confidentiality and file return — including what happens when the engagement ends: return of the original file, a status summary of open matters, and revocation of powers of attorney.
Questions worth asking before you sign
Questions that force an answer about method reveal more than asking whether a firm handles a given area.
- If we send a contract for review today, what happens next — who reads it, and what form does the answer come back in?
- When a matter becomes litigation, does the team change?
- Have you worked with businesses like ours, and what tends to go wrong in this kind of business?
- If you act for another client who becomes our counterparty, how is that handled?
The last question matters more than most companies think, because conflicts of interest tend to surface mid-matter rather than at signature.
Start with three documents, not a full overhaul
Most companies do not need everything reviewed in the first month. The work that pays first is the three document sets used every day.
The template you send to customers, because it is the most repeated document you have — so a single defect is reproduced with every customer.
Employment documents — contracts, work rules, and warning letter templates — because this set decides the outcome of nearly every labour dispute.
How you collect when a customer does not pay, from the form of the demand letter through to the sequence of steps before deciding to sue.
Those three cover most of what sends a mid-sized business to court. Shareholding structure, governance, and investor readiness can wait until the business reaches that point.
What you should have in hand after the first month of a retainer
A retainer that is working is visible by the end of the first month. Not because every problem is solved, but because the lawyers now know the business well enough to answer quickly. A company can reasonably expect the following, and can ask for it in the agreement.
An intake of the core documents. The firm should ask for, and you should hand over, the basics: the company certificate and objects clause, the shareholder register and any shareholders' agreement, the contracts that carry the most revenue or risk, the work rules and standard employment contract, and the licences and registrations the business depends on. Gaps found at this stage, such as a missing licence or a register that does not match the filings, are findings in themselves.
A ranking of risks, not a list of every defect. Ask for the issues sorted by what could hurt the business soonest and most, with a short reason for each. A first review that flags thirty items at equal weight is hard to act on. Three to five ranked items, each with an owner on your side, are not.
An agreed request channel and turnaround. One address or group where requests go, who on your side may send them, who at the firm answers, and the response windows for routine and urgent matters. This is the practical form of the "named responsibility and response times" term in the agreement above.
A contract register. A simple table of the live contracts: counterparty, subject, start and end dates, renewal and termination notice, and who owns the relationship. Its first use is that notice periods stop passing unnoticed. Its second is that the next review of a template or counterparty starts from the register, not from searching old emails.
A written first report. Short, in plain language, covering what was received, what was found, the ranked risks, what the firm recommends doing first, and what it could not assess because documents were missing. The report also shows you whether the firm has understood the business or only read the files.
What this does not mean: the first month is not a guarantee that no dispute will arise, and the firm cannot review what it has not been given. The speed of the intake depends as much on the company as on the lawyers, so name someone internally to gather the documents.
If, after a month, you cannot say what the firm now knows about your business that it did not know before, raise it then rather than at renewal.
Read next
- Overview of business and corporate legal services
- Service detail: retained corporate legal counsel
- Employment side: employment compliance review and the guide on labour compliance audits for employers
- Once a matter reaches court: defending an employer in the Labour Court
