Issue
The group has an ecosystem of member companies in healthcare, medical care, aesthetics and beauty but no dedicated in-house legal team. Management systems, operating procedures and legal controls across the companies were not aligned, leaving internal governance inconsistent. Contracts with partners, suppliers and contractors mostly used templates supplied by the counterparty, without a full review of rights, obligations and risk controls. Clients complained about service quality and demanded compensation.
What HDS did
HDS provides outsourced in-house counsel services, supporting the Group and its member companies in reviewing and improving their legal framework and restructuring corporate governance, specifically: comprehensive legal review; corporate restructuring advice; standardizing internal governance systems; contract control; and support in resolving legal issues arising in the governance, operation and business of the Group and its member companies.
Result
Through outsourced in-house counsel services, HDS helped the group step by step to improve and align its legal governance across the whole ecosystem, with a more consistent organizational structure, operating procedures and internal controls. Contracts were reviewed and standardized to better protect the company's lawful rights and interests and reduce risks relating to performance schedules, acceptance and payment. The group also gained a dedicated legal contact point who supports issues promptly, prevents risks proactively and provides a solid legal foundation for expanding the business ecosystem.
Background
The Group owns an ecosystem of member companies in healthcare, medical services, aesthetics and beauty. As it expanded and grew its business, the Group faced a number of issues relating to internal governance and legal risk control:
- There is no dedicated legal department to manage, control and handle legal issues arising across the whole system.
- Organizational structures and management and operating procedures are not aligned across member companies; there is no unified set of forms and documents for internal governance and management.
- The system for storing and managing legal documents and records is not standardized, and lacks mechanisms for control, access permissions and document version management.
- Contracts are mostly signed on templates supplied by counterparties, without a full review of rights, obligations and risk allocation. Disputes have arisen over performance schedules and payment obligations.
- Client complaints frequently arise regarding quality, procedures and responsibility in the course of service delivery.
- The Group plans to invest and expand overseas, which raises higher requirements for corporate governance, legal compliance and risk control in international investment.
How HDS handled it
HDS provides outsourced in-house counsel services, acting as the legal department alongside the Group and its member companies, and delivers the following groups of solutions:
(i) Advice on restructuring and improving the corporate governance system
- Review the organizational structure, governance model and legal relationships among member companies.
- Advise on restructuring options and on allocating functions, duties, authority and responsibility among management levels and dependent units.
- Develop and standardize regulations, procedures and forms for internal governance and management.
(ii) Standardizing the records and document management system
- Review, classify and systematize the legal records of the Group and its member companies.
- Advise on building procedures for managing, storing, updating and using documents.
- Propose mechanisms for access permissions, version control and records management to ensure consistency, confidentiality and information retrieval.
(iii) Controlling contracts and business risks
- Review, draft and standardize contracts and agreements with partners, suppliers and contractors.
- Focus on controlling clauses on scope of work, schedule, acceptance, payment, liability for breach and compensation for damages.
- Advise on options for resolving disputes and disagreements that arise during contract performance.
(iv) Controlling legal risks in service delivery
- Review service delivery procedures, client policies and transaction terms.
- Advise on building procedures for receiving, handling and resolving client complaints.
- Review the company's legal liability at each stage of service delivery, and propose measures to limit disputes and protect its lawful rights and interests.
(v) Legal advice for investment and international market expansion
- Review legal issues relating to investment plans and expanding business overseas.
- Advise on legal requirements, investment structure, and the establishment and operation of legal entities in the target market.
- Help identify risks under investment and business law and legal compliance in the country where operations are planned.
Result
Through outsourced in-house counsel services, HDS helps the Group build, step by step, a unified and systematic legal governance foundation across all its member companies, aiming at the following results:
- An improved governance structure, with clearly defined functions, authority and responsibility among units in the ecosystem.
- Standardized regulations, procedures and forms for management and internal operations.
- Stronger control, storage and retrieval of legal records and documents.
- More effective contract control, reducing the risk of disputes and unfavorable legal obligations.
- Mechanisms in place for receiving and handling complaints and controlling legal risks in serving clients.
- A legal and governance foundation for the plan to invest and expand the business into overseas markets.
HDS does more than advise on and resolve legal issues as they arise. It accompanies the Group in building a well-structured governance system, controlling risks proactively and laying a legal foundation for its long-term development strategy.
