By Md. Jakiul Kader
The relationship between law and business can be discussed in various ways such as by figuring out the importance and role of law in business, analyzing the problems relating to implementation of legal skills in an entrepreneurship and so on. This article, however, will only explain the role that discipline of law plays in business. I will also explain why law students should be more interested to become a legal entrepreneur today.
In the age of business and entrepreneur-ships, the entrepreneurs now face many legal issues in setting up and running new ventures (whether a for-profit, non-profit, or hybrid endeavor), bringing a product or service to market, and financing an entrepreneurial enterprise. Therefore, it is very important for the young and new entrepreneurs to know the various roles of law which are relevant for smooth going of trade and business.
Role of law in business can be explained in these 3 terms – system, moral balance and force.
System: Through intricately woven narratives and metaphors, both law and business can be described as a system. System is expressed metaphorically via references to machines (wheels and gears, well-oiled machine), a constructed process or approach for solving a problem, a set of rules or procedures to accomplish a task, or following a ritual. A person can almost see the market as a set of gears and they all interact and turn each other. Law is “one of the lubricants that keep the system of interacting businesses with trust and confidence. The system doesn’t have to seize every time a transaction occurs.” Law promotes entrepreneurship. The reason people are entrepreneurs is because they have this foolish belief that they are still smart enough and capable enough to create something great in the world. Law gives companies the motivation and incentive to innovate and create and be productive knowing that even if someone does not play by the rules,it does not mean that s/he will lose. We can still win at our game that we areplaying because the legal system will protect us. Law creates a fair playing field that is integral to the systems of businessand society. The problem is – if people are willing to cheat, then the system tends to get broken a little bit.
Moral Balance:Law establishes what we call moral balance in society. The goal of law is to set up a framework in which tremendous value can be added in such a way so that human rights and the basic tenets and morals of society can be preserved and protected. Law sets the rules ofthe game and kind of defines, from a public policy point of view, how business should run or should act or what limits should be set upon business. This, in turn, leads to opportunities for fair and safe business and interpersonal relationships and transactions. Law helps us raise business up to its full stature and doesnot allow for the slouching and inefficiency that an‘un-actualized’ organization would have, if law were not there. In the business world, law can be treated as heart and ethics as spine. Law sets the foundation, it gets the spine there. The spine gives it some structure but we have got to have a heart. So we cannot have mindless goons running the business and expect it to be this wonderful Zen-like organization. It is only one part, but it is crucial. Law can also be described as an instrument of necessity. The idea of law is to help prevent inequity in the society. Legal rulesmandate to give equal access or equal opportunities to the people. This way we can ultimately avoid these odd situations or outcomes. In the long run, it will help businesses and economy to be operated more resourcefully.
Force:Law can be perceived to be a force or entity. Force was expressed through references to power, a powerful presence, or a source of energy, as well as to the consequences of force (getting hit, slammed, impact). Law is an unseen entity that is always there; it levels the playing field, draws lines, sets boundaries in business and society, and gives direction. It creates security and is comforting. Law acts as‘protector’ and ‘enforcer’ in the business and entrepreneur-ships.
In the present context of legal development in business sector, I would say that lawyers and law students should become more interested in legal entrepreneur-ships. Currently, the market is flooded with an over-supply of lawyers, and consumers of all sizes are seeking more affordable access to legal services and technology. Practically the standard in other businesses is yet to become widely adopted in practice of law.
However, there remains an exciting moment for legal innovators. Whether by choice or in reaction to the economy, the proverbial lawyer hanging up a shingle is back with an entrepreneurial vengeance. And these days, running a start-up law firm is not too far from running a tech start-up, but with the added responsibility of regulation and ethical scrutiny.
Lawyers are increasingly using social media, hosting blogs, speaking on panels and leveraging technology to build a practice on a shoe string and deliver high quality legal services to clients at a reasonable price. Lawyers have additional challenges like ethical regulations on marketing, ownership regulations which affect building business team, and financing issues that are far stricter than for non-legal companies. As the law students continue to set their sights on entrepreneurship, it will be interesting to see the rise of legal entrepreneurship in which the legal industry will adapt and embrace change.