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Priya Bahal, associate general counsel at KPMG, makes the argument for why in-house legal teams need to shift to a proactive working style

The role of in-house counsel has transformed in the past few years. Traditionally, legal teams operated more in a reactive capacity by intervening when a legal problem arose, by addressing firefighting issues such as responding to notices and penalties, by handling disputes only after escalations, compliance after breach, reviewing contracts at the last stage, and by drafting policies only after incidents occurred.

The traditional reactive approach of the legal team often created a perception that legal was a roadblock, slowing down business decisions. However, the proactive stance of some legal teams has transformed the legal function to be seen as a true business enabler and a strategic business partner.

These legal teams are not just troubleshooters and problem solvers who go beyond resolving issues. They are now expected to do much more by playing a role in strategic corporate governance, risk management, engaging with business partners, drafting watertight contracts, handling litigation management, M&A and whistleblower complaints, shaping business policies, compliance, and settlement strategies.

This shift is driven by the need for companies to be more agile and compliant in an evolving business landscape. Companies realised that waiting for issues to arise (reactive) could not only trigger penalties but also reputational collapse. The approach taken by reactive versus proactive legal teams can have a significant impact on the company’s strategic, operational, financial, legal, regulatory and reputational outcomes. The proactive legal team helps businesses stay prepared and resilient, rather than merely reacting to crises. In today’s evolving business landscape, companies that invest in proactive legal teams are better positioned for long-term success, stability and resilience.

Proactive legal teams forecast legal challenges such as upcoming laws, including the Digital Personal Data Protection Act, ESG reporting norms, and amendments to existing laws such as labour laws. They also identify onerous contracts, loose policies and processes, and compliance gaps. These teams implement preventive measures and ensure that their company always operates within a legally secure framework.