Legal and Strategic Astuteness

Abstract

Legal astuteness is a foundational concept of the Law & Management approach that has been referenced and expanded upon by many prominent scholars in the field. Defined as the ability of the top management team to communicate effectively with counsel and to work together to solve complex problems, it is usually divided into four components: a set of value-laden attitudes about the importance of law to firm success, a proactive approach to regulation, the ability to exercise informed judgment when managing the legal aspects of business, and context-specific knowledge of the law and the appropriate use of legal tools, all of which will be detailed in this chapter. Under the resource-based view of the firm, legal astuteness is considered to be a valuable managerial capability that under certain circumstances, may provide a competitive advantage to the business. This chapter is a synthesis of significant literature available on the matter and aims at providing an up-to-date and comprehensive definition of legal astuteness and of its interdependent concept, the strategic astuteness of lawyers. It provides many practical examples taken from such literature, especially of how firms have been using it to create a competitive advantage, and gives insights on how such a valuable resource can be developed and nurtured within the firm and beyond, in particular at academic level, with a view to giving the reader a set of practical tools and options to consider in their day-to-day activities and positioning within the business.