Winning legally

This paper explores the value of actively managing the legal dimensions of business. It draws on the dynamic capabilities approach and postulates that "legal astuteness" defined here as the ability of the top management team to communicate effectively with counsel and to work together to solve complex problems is a valuable dynamic capability. This paper posits that law and the tools it offers are an enabling force legally astute management teams can use to manage the firm more effectively. In particular, it proposes that legally astute management teams can, inter alia, use formal contracts as complements to relational governance to define and strengthen relationships and reduce transaction costs; create options; protect and enhance the realizable value of knowledge assets and certain other resources - and convert regulatory constraints into opportunities.