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The Past and Future of Proactive Law: An Overview of the Proactive Law Movement

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This chapter introduces the concept of proactive law. Proactive law originated in Scandinavia in the late 1990s in an effort to improve the contracting process in business dealings. It later has been expanded to other regions and areas of law. It regards the law as an enabling instrument, which fosters the creation of economic value and successful relationships. This article summarizes the history and basic principles of the proactive law approach. It reflects on some of the reasons for the emergence of the approach, describes its origins in and contrast it from preventive law, and �concludes with perspectives on future research.
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13
The Past and Future of
Proactive Law: An Overview
of the Development of the
Proactive Law Movement
By
Gerlinde Berger-Walliser
Dr.jur., Associate Professor, CEREFIGE-ICN
Business School Nancy-Metz1
1. Introduction
Over the recent years, a growing body of literature, conferences, books
and other publications has contributed to the de nition and further de-
velopment of proactive law following its introduction in the late 1990s.2
Since then the idea of a proactive approach to law has been developed
further, enriched, re ned,3 and extended into new areas, thereby enlarg-
ing the concept of proactive law and its  elds of application. Recently,
academic courses on proactive law and management have been estab-
lished in European law and business schools4, and the concept has been
1. I thank Helena Haapio for her insights and comments on an earlier dra of
this chapter.
2. The approach speci cally called proactive law emerged in Finland in the late
1990s. See the  rst publication relating to the approach: Helena Haapio: Qual-
ity Improvement through Proactive Contracting: Contracts Are Too Important
to Be Le to Lawyers!, American Society for Quality, Proceedings of Annual
Quality Congress (AQC), Philadelphia, PA, Vol. 52, May 1998, pp. 243-248.
3. See e.g. Henrik Lando, Determinants of the Optimal Degree of Pro-activeness in
Contracting, in A PROACTIVE APPROACH 255 (Scandinavian Studies in Law
vol. 49, Peter Wahlgren ed. 2006) [hereina er A PROACTIVE APPROACH].,
available at h p://www.scandinavianlaw.se/pdf/49-14.pdf.
4. See ERASMUS curriculum development project on Proactive Management
and Proactive Business Law (PAM PAL) funded by the Lifelong Learning Pro-
gramme of the European Commission. See ProActive Management and ProAc-
14
The Past and Future of Proactive Law
taken up by the European Economic and Social Commi ee in the form
of its own-initiative opinion on “The proactive law approach: a further
step towards be er regulation at EU level” published in the O cial
Journal of the European Union in 2009.5 The proactive approach to law,
sometimes also called proactive law movement, has triggered interest not
only by people working in the  eld of law and regulation but also in
other academic and professional areas such as information technology,
economics, strategy, marketing and communication, commercial and
contract management, thereby fostering its interdisciplinary scope.
Without pretention to be exhaustive, this chapter is a modest a empt
to synthesize some of the existing literature on proactive law. Hopefully
it can make a small contribution to the de nition and the development
of a comprehensive theory of proactive law by providing a framework
for future research in the area of proactive law and the development
and application of proactive legal and management tools in academia
and practice.
In the following I will explain the concept of proactive law, summa-
rize the history of the proactive law movement, and re ect on some of
the reasons for the emergence of the approach. I will describe its origins
in and contrast it from preventive law, identify the basic principles of
proactive law, and  nally conclude with perspectives on future research.
2. History of the proactive law movement
The approach speci cally called proactive law emerged in Finland in
the late 1990s. The  rst publication relating to the approach was a pa-
per entitled “Quality Improvement through Proactive Contracting” that
Helena Haapio presented at the Annual Quality Congress of the Ameri-
can Society for Quality in Philadelphia in 1998. This paper was followed
tive Business Law, TURKU UNIVERSITY OF APPLIED SCIENCES, h p://pam-
pal.turkuamk. /index.php.
5. See Opinion of the European Economic and Social Commi ee on ‘The proactive
law approach: a further step towards be er regulation at EU level’, 2009 O cial.
J. Eur. Union, July 28, 2009, at C 175/26, available at h p://eur-lex.europa.eu/
LexUriServ/LexUriServ.do?uri=OJ:C:2009:175:0026:0033:EN:PDF.
15
2. History of the proactive law movement
by a series of publications and the  rst proactive law conference, which
was held in Helsinki in 2003.
A central player in the  eld is the Nordic School of Proactive Law, a
network of researchers and practitioners from Denmark, Finland, Ice-
land, Norway, and Sweden, each of whom has an interest in proactive
law. The Nordic School was instrumental in the creation of the ProAc-
tive ThinkTank, led by a core team from Denmark, Finland, France, the
Netherlands, and the United Kingdom. The mission of the ThinkTank
is to provide a global forum for business leaders, lawyers, academics,
and other professionals to discuss, develop, and promote the proactive
management of relationships, contracts, and risks and the prevention
of legal uncertainties and disputes.6 Among the publications following
conferences organized by the Nordic School are three English language
books, A Proactive Approach7, Corporate Contracting Capabilities8, and
A Proactive Approach to Contracting and Law.9 Some of the early work
of the Nordic School is available in Finnish or Swedish only.
A er initial developments in the Nordic countries, the proactive ap-
proach started to awaken interest outside Scandinavia,  rst in Europe
and later in other countries, leading to conferences and publications on
a broader scale.10 Through these and the International Association for
Contract and Commercial Management (IACCM), information about
the approach reached pioneers of law and strategy, and law for competi-
tive advantage (LCAM),11 an emerging  eld of legal scholarship in the
United States.12 This expanded the already existing close collaboration
6. See ProActive Think Tank Mission Statement, available at h p://www.proac-
tivelaw.org/. See also h ps://www.iaccm.com/gp/proactive/?java&preview.
7. A PROACTIVE APPROACH, Scandinavian Studies in Law vol. 49 (Peter Wahl-
gren ed. 2006).
8. CORPORATE CONTRACTING CAPABILITIES, University of Joensuu Publica-
tions in Law, No. 21 (Soili Nyste’n-Haarala ed. 2008).
9. A PROACTIVE APPROACH TO CONTRACTING AND LAW (Helena Haapio
ed, 2008).
10. Proactive law conferences have taken place biannually in Helsinki, Stockholm,
Turku, Nancy and Copenhagen.
11. See Larry A. DiMa eo, George J. Seidel & Helena Haapio, Strategic Contracting:
Examining the Business-Legal Interface, in this book.
12. See generally Robert C. Bird, Pathways of Legal Strategy, 14 Stan. J. L. Bus. &
Fin. 1, 3-4 (2008); Constance E. Bagley, Winning Legally: The Value of Legal
Astuteness, 33 ACAD. MGMT. REV. 378, 383 (2008); Constance E. Bagley, What’s
16
The Past and Future of Proactive Law
between the promoters of preventive law and proactive law to new  elds
and led to  rst a empts to trace the history of these parallel develop-
ments and to merge their common themes.13
3. De nition and nature
Proactive law seeks a new approach to legal issues in business and
society. Instead of regarding law as a constraint that companies and
people in general need to comply with, a cost factor, an administrative
burden, or – at best – a means to protect one’s own or somebody else’s
interests against harmful behaviour of others, proactive law considers
law as an enabling instrument to create success and foster sustainable
relationships. An objective of proactive law is to use the law as a lever
to create value for the company, the individual or society in general.
According to de nitions found in common English language dic-
tionaries, the word proactive (also spelled pro-active) implies “acting
in anticipation of future problems, needs, or changes.”14 According to
Randy M. Page, “[t]he concept of proactivity emphasizes taking personal
responsibility for behaviour” based on values rather than “blam[ing]
circumstances, conditions or, conditioning for their behaviour.” 15 These
de nitions go back to experimental psychology from the 1930s which
de ne proactivity as “impairment or retardation of learning or of the
Law Got to Do with It?: Integrating Law and Strategy, 47 AM.BUS.L.J. 587
(2010); Robert C. Bird, Law, Strategy and Competitive Advantage, 44 U. CONN.
L. REV. 61(2011), available at h p://connecticutlawreview.org/documents/Bird.
pdf.
13. See e.g. George J. Siedel & Helena Haapio, Using Proactive Law for Competitive
Advantage, 47 AM. BUS. L.J. 641 (2010); Gerlinde Berger-Walliser, Robert C.
Bird & Helena Haapio, Promoting Business Success Through Contract Visuali-
zation, 17 J.L., BUS. & ETHICS 55 (2011); Larry A. DiMa eo, George J. Seidel and
Helena Haapio, Strategic Contracting: Examining the Business-Legal Interface
in this book.
14. h p://www.merriam-webster.com/dictionary/proactive.
15. Randy M. Page: Fostering Emotional Well-being in the Classroom. Chapter 2:
Skills for Emotional Well-Being. Paragraph: Responsibility: Are We Proactive or
Reactive? pp 50-52 Jones & Bartle Publishers, 2003, citing Stephen R. Covey,
The Seven Habits of Highly E ective People, 1992, 2004 and Viktor E. Frankl,
Man’s search for meaning: an introduction to legotherapy, 1959.
17
3. De nition and nature
remembering of what is learned by e ects that remain active from condi-
tions prior to the learning”.16 Today, the word proactive or proactivity is
commonly used (and sometimes misused) in di erent contexts, such as
life sciences, business, information technologies and management litera-
ture.17 The la er di erentiates between proactive thinking18 and proactive
behaviour (proactivity).19 The so-called proactive thinking framework devel-
oped by Alain Paul Martin, Herbert A. Shepard and Richard Beckhard
“applies primarily to issues (threats and opportunities) and complex
social systems such as communities and organizations (corporations,
government, NGOs, World Bank),”20 while proactive behaviour mostly
applies to the individual, namely in the workplace.21 Findings from the
aforementioned literature show that professionals who are considered
to be proactive typically engage in the following behaviors:22
1. Scan for change opportunities.
2. Set e ective, change-oriented goals, and focus on accomplishment
with real impact.
3. Anticipate and prevent problems.
4. Do di erent things, or do things di erently.
5. Take action.
6. Persevere, persist in their e orts.
7. Achieve results.
16. Whiteley, Paul L.; Blankfort, Gerald (1933), „The In uence of Certain Prior
Conditions Upon Learning“, Journal of Experimental Psychology (APA) 16:
843-851.
17. See generally The Professional Development Institute, Proactive Thinking and
Strategic Brainstorming, at h p://www.executive.org/proactive/Default.asp.
18. Alain Paul Martin (1983). Think Proactive: New Insights into Decision-Making.
The Professional Development Institute. 233 (1983).
19. See e.g. Bateman, T. S., & Crant, J. M. (1993). The proactive component of
organizational-behavior: A measure and correlates. Journal of Organizational
Behavior, 14(2), 103-118.
20. The Professional Development Institute, Proactive Thinking and Strategic
Brainstorming, at h p://www.executive.org/proactive/Default.asp.
21. Id.
22. Thomas S. Bateman, & J. Michel Crant, J. M., Proactive Behavior: Meanings, Impact,
and Recommendations, Business Horizons 63 (1999).
18
The Past and Future of Proactive Law
In addition to the research on proactive thinking and proactivity at work,
organizational research has identi ed design features which character-
ize a proactive organization. According to Jon M. Shepard, Michael Betz
and Lenahan O’Connell the proactive organization adopts the following
four features: cooperation, participation, negotiation, and direct antici-
pation.23
Some of these features are re ected in the already existing literature
on proactive law; others could be developed further in the future. Proac-
tive lawyering involves acting in anticipation of legal disputes, taking
control of potential problems, providing solutions, and self-initiation,
instead of reacting to failures and shortcomings as traditional law usu-
ally does. Literature and those practising proactive law try to develop
concepts, theories and tools to use legal instruments proactively in order
to achieve business goals. This includes dra ing contracts that foster
good relationship(s) and provide a roadmap for performance (instead
of providing legal safeguard clauses in case something goes wrong),
regulation that encourages good behaviour, or agile contracts that adapt
to changing situations and help to create trust among business partners.
On the website of the Nordic School of Proactive Law, proactive law
is de ned as: “… a future-oriented approach to law placing an emphasis
on legal knowledge to be applied before things go wrong. It comprises
a way of legal thinking and a set of skills, practices and procedures that
help to identify opportunities in time to take advantage of them – and to
spot potential problems while preventive action is still possible. In ad-
dition to avoiding disputes, litigation and other hazards, Proactive Law
seeks ways to use the law to create value, strengthen relationships and
manage risk.” This de nition of proactive law builds the foundation for
many publications on proactive law, and is re ected in the EESC opinion
on the proactive approach.24 While this initial de nition of proactive law
has lost nothing of its validity and well re ects the basic idea of proactive
law, it is not static or graved in stone. The de nition of proactive law will
be subject to modi cation as the concept of proactive law evolves. Al-
23. Jon M. Shepard, Michael Betz and Lenahan O’Connell, The Proactive Corporation:
Its Nature and Causes, 16 Journal of Business Ethics 10, 1001 at 1007 (1997).
24. h p://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:175:0026:00
33:EN:PDF.
19
4. Origins and causes
ternative de nitions which stress di erent aspects of proactive law, and
concentrate more on the concept and methods than the “approach” or
the “way of legal thinking” which characterizes the early work on proac-
tive law, have already been developed.25 The concept has been adapted
to di erent areas such as contracting, ICT, management or regulation.
4. Origins and causes
The concept of proactive law has been developed based on a certain dis-
satisfaction with the current legal system, o en called “traditional law”
in opposition to the proactive approach to law. Proactive law could be
classi ed among other emerging alternative legal approaches, which Su-
san Daico in her extensive study on the law as a healing profession calls
vectors of the comprehensive law movement, and which approach law in a
more comprehensive, integrated, humanistic, interdisciplinary, restora-
tive way.26 Some of these alternative approaches or processes (vectors)
are also re ected in proactive law, such as collaborative law, restora-
tive justice, procedural justice, transformative mediation, therapeutic
jurisprudence, holistic justice, creative problem solving.27 A common
25. See e.g. Salmi-Tolonen PAMPAL glossary (2011), on  le with the author, who
states that proactive law “is a comprehensive concept concerning civil and com-
mercial ma ers which refers to any regulation measure/activity, undertaken
by public or private actors, as well as its methods, instruments, and results,
whose purpose is by imposing duties, conferring rights and creating compe-
tences enable and empower individuals concerned or private or public bodies
in achieving their commonly de ned goals. In practice, the forms this concept
takes are rules, practices and/or processes.”
26. See Susan Daico , Law as a Healing Profession: The “Comprehensive Law
Movement”, bepress Legal Series, Working Paper 1331 (July 22, 2005), available
at: h p://law.bepress.com/expresso/eps/1331.
27. It can be argued whether “creative problem solving” is a speci c vector of the
comprehensive law movement, see Susan Daico , Law as a Healing Profession:
The “Comprehensive Law Movement” (July 22, 2005). bepress Legal Series.
Working Paper 1331, at 22-25. available at: h p://law.bepress.com/expresso/
eps/1331, or a part of preventive law, see Thomas D. Barton and James M.
Cooper, Preventive Law and Creative Problem Solving: Multi-Dimensional
Lawyering, National Center for Preventive Law, available at h p://www.pre-
ventivelawyer.org/content/pdfs/Multi_Dimensional_Lawyer.pdf.
20
The Past and Future of Proactive Law
feature for all these di erent forms of comprehensive legal approaches,
and essential for proactive law, is that they seek to optimize human
well-being and consider “extra-legal factors”, whereas the prevailing
European legal theory considers law as “a coherent conceptual system
that creates legal cause and e ects relationships”28 in a framework of
greatest possible neutrality.29 The idea of proactive law has been born
out of practical needs, in collaboration between academics and practi-
tioners in order to “balance the prevailing legal logic”.30 It is not as the
name proactive law movement could suggest a legal ideology, but deeply
based on existing realities, practice-oriented, with the objective to reach
real-life (especially business) goals. Insofar, and not surprising given its
Finnish origins, proactive law is rooted in (Scandinavian) legal realism31,
and takes into account the economic dimension of legal decisions.32
4.1 From prevention to promotion
The idea of an ex-ante view or proactivity in law is not new in itself. It
has been known for years that the sooner a dispute or a potential dispute
is addressed, the be er the chances of a fair and prompt solution. In the
context of practicing law, the idea of prevention was  rst introduced by
Louis M. Brown, himself an experienced practitioner as well as a law
professor. In his ground-laying treatise Preventive Law published in 1950,
he states a simple but profound truth that has not lost any of its value.
Indeed, many a orneys and in-house-counsel actually act according to
this mo o: “It usually costs less to avoid ge ing into trouble than to
pay for ge ing out of trouble.”33 The contribution of Louis M. Brown
and other scholars in the  eld of preventive law consists in identify-
ing preventive law with its own name, organizing it into a distinctive
28. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE AP-
PROACH 54 at 56 (2006).
29. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE AP-
PROACH 54 at 57 (2006).
30. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE AP-
PROACH 53, at 54 (2006).
31. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE AP-
PROACH 54 at 57 (2006).
32. See e.g. Henrik Lando, Determinants of the Optimal Degree of Pro-activeness
in Contracting, in A PROACTIVE APPROACH 255 (2006).
33. Louis M. Brown, Preventive Law 3 (1950).
21
4. Origins and causes
way of thinking, developing concepts, if not a comprehensive general
theory of preventive law.34 By doing so they made preventive law visible
and recognizable for people with a similar mindset. They have created
awareness, which is necessary to change people’s mindset in order to
use the law according to business goals, to become more creative, pre-
ventive – “be er” lawyers.
Edward Dauer identi es four core principles of preventive law:35
1. Preventive law aims at predicting human behavior. A lawyer practis-
ing preventive law tries to predict human behaviour. He or she will
search for a legal solution, which takes into account what the people
will do, and by doing so helps anticipate and prevent litigation. Tra-
ditional law practice tries to predict what a court will decide. Insofar
traditional law practice also seems to be preventive. It might prevent
losing in court, but still not achieve what the people really need and
want. Therefore traditional law practice remains backwards, and fail-
ure and litigation-oriented. It does not improve personal or business
relationships, which is essential for preventive – and proactive – law.
2. Preventive law is based on the assumption that the most successful
treatment is prevention, and seeks to transfer this idea from the medi-
cal to the legal context of con ict management.36 Dauer sets forth a
three-step strategy for managing legal risk, illustrated in Figure 1
(see page 22).
3. Adapted from: Edward A. Dauer in A Proactive Approach to Con-
tracting and the Law 14, at 25 (Helena Haapio ed. 2008). Preventive
law embraces risk. This means to deliberately embrace some risk as
a way of reducing overall risk, rather than try to drive one element
of risk to zero.
4. Make preventive legal services available to clients: According to
the basic ideas of preventive law, lawyers must work with others in
multi-disciplinary teams in the planning of clients’ ventures. While
the  rst three principles predominantly ask for a change in the at-
34. Edward A. Dauer, Four Principles for a Theory of Preventive Law, in, A Proactive
Approach to Contracting and Law 14 (Helena Haapio Ed., 2008).
35. Id.
36. Tobias Mahler, The State of the Art of Contractual Risk Management Method-
ologies, in A Proactive Approach to Contracting and Law, at 63 (Helena Haapio,
Ed. 2008).
22
The Past and Future of Proactive Law
titudes and practices of lawyers, this fourth principle is oriented to-
wards the client – the business or private person. Not only do lawyers
need to become more prevention-oriented, but clients need to bring
in lawyers early enough, so they can together detect legal risk and
prevent harm from occurring and engage in interdisciplinary col-
laboration, otherwise even the best preventive lawyer won’t help.
Figure 1: A three-step strategy for managing legal risk. Source: Daver.
Tertiary prevention: palliate
or minimize the damage
Primary prevention: keep
the cause of the problem
from arrising
Secondary prevention:
interrupt the cause and eect
Proactive law encompasses the basic principles of preventive law de-
scribed above, namely preventing what is not desirable, and keeping
problems and risks from materializing. To the preventive dimension,
proactive law adds a second aspect – the promotive (or positive, con-
structive) dimension that is promoting what is desirable, encouraging
good behaviour. While preventive law prevents problems and ill-health,
proactive law promotes “legal well-being” and clients’ “self-care”.37 It
has been stated that Louis M. Brown’s work on preventive law was
targeted toward lawyers. While in uenced by his work, the proactive
law approach emphasizes the importance of collaboration between legal
professionals and other disciplines. Though – so far – mainly rooted in
37. See Helena Haapio, Introduction to Proactive Law: A Business Lawyer’s View,
in A Proactive Approach to Contracting and the Law 23, at 24 (Helena Haapio
ed., 2008).
23
4. Origins and causes
the legal paradigm, proactive law expressively addresses other  elds of
expertise. The practice of proactive law requires collaboration between
lawyer and non-lawyer, therefore the client can’t be a passive “patient”,
leaving the legal issues to the legal professional, but needs to take an
active role in the law-making, contract dra ing, or other law related
processes.38 In the words of Soile Pohjonen: “[preventive law] favors the
lawyer’s viewpoint, i.e., the prevention of legal risks and problems. In
Proactive Law, the emphasis is on achieving the desired goal in particu-
lar circumstances where legal expertise works in collaboration with the
other types of expertise involved. In Proactive Law, the need for dialogue
between di erent understandings is emphasized.” 39
4.2 Development of proactive law
The concept of proactive law was  rst introduced and continues to be
extensively used in connection with contracts.40 From the perspective of
proactive law, traditional contracts are o en reactive, focusing on legal
problems and litigation instead of serving as a management tool and
to foster collaboration between business partners, though the la er is
crucial for success in todays’ global and networked economy.41 In con-
trast to contract law, which is based on the interpretation of legal rules
38. Id.
39. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE AP-
PROACH, supra note 3, at 53; see also Soile Pohjonen, Law and Business –
Successful Business Contracting, Corporate Social Responsibility and Legal
Thinking, TIDSKRIFT UTGIVEN AV JURIDISKA FÖRENINGEN I FINLAND
(JFT) 470, 477 (2009), available at h p://www.helsinki. /oikeustiede/omasivu/
pohjonen/Law%20and%20Business.pdf.
40. Helena Haapio: Quality Improvement through Proactive Contracting: Con-
tracts Are Too Important to Be Le to Lawyers!, American Society for Quality,
Proceedings of Annual Quality Congress (AQC), Philadelphia, PA, Vol. 52, May
1998, pp. 243-248.
41. See e.g. Gerlinde Berger-Walliser, Robert C. Bird & Helena Haapio, Promot-
ing Business Success Through Contract Visualization, 17 J.L., BUS. & ETH-
ICS 55 (2011); Vaula Haavisto, Contracting in Networks, in A PROACTIVE
APPROACH, 49 SCANDINAVIAN STUD. L., in A PROACTIVE APPROACH
237 (2006); Soili Nystén-Haarala, Contract Law and Everyday Contracting, in
A PROACTIVE APPROACH 263 (2006); Tim Cummins, Best Practices in Com-
mercial Contracting: Key Initiatives That Are Driving Competitive Advantage,
in A PROACTIVE APPROACH 132 (2006); Tobias Mahler, Faculty of Law Uni-
versity of Oslo, Legal Risk Management: Developing and Evaluating Elements
24
The Past and Future of Proactive Law
by a court, i.e. ex post, proactive contracting emphasizes the contracting
process and tries to develop an adequate set of tools for building func-
tioning collaboration in real life (business) relationships. When dra ing
a proactive contract, the focus is on capturing the goal of the business
deal, assuring a shared understanding between the contract partners
and developing structures, rules and procedures that ex ante enable
the creation and achievement of desired goals and avoidance of future
problems.42
Shortly a er its emergence in contracting, the proactive approach has
been extended to other areas43 and a more comprehensive theory has
started to evolve.44 Legal scholars45, business practitioners,46 and the Eu-
ropean Economic and Social Commi ee are calling for a paradigm shi .
According to the la er: “[t]he time has come to give up the centuries-old
reactive approach to law and to adopt a proactive approach. It is time
to look at law in a di erent way: to look forward rather than back, to
focus on how the law is used and operates in everyday life and how
it is received in the community it seeks to regulate. While respond-
of a Method for Proactive Legal Analyses, With a Particular Focus on Contracts
(2010).
42. See e.g. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE
APPROACH 53, at 55 (2006); Tobias Mahler, The State of The Art of Contractual
Risk Management Methodologies, 57 in A PROACTIVE APPROACH TO CON-
TRACTING AND LAW, AT 63 (HELENA HAAPIO, ED. 2008); for an example
of possible application see Soile Pohjonen and Katja Koskelainen, Empowering
Contracting Parties, Proactive and dialogic contracting in public procurement,
in this book.
43. See e.g. Dag Wiese Schartum, Introduction to A Government-based Perspective
on Proactive Law, in A PROACTIVE APPROACH 35 (2006); Jarl S. Magnusson,
Proactive Law – and the Importance of Data and Information Resources, in A
PROACTIVE APPROACH 407 (2006).
44. See e.g. Soile Pohjonen, Proactive Law in the Field of Law, in A PROACTIVE
APPROACH 54 (2006); Thomas D. Barton, A Paradigm Shi in Legal Thinking,
in A Proactive Approach to Contracting and The Law 35 (Helena Haapio, Ed.
2008); Edward A. Dauer, The Role of Culture in Legal Risk Management, in A
PROACTIVE APPROACH 93 (2006).
45. Thomas D. Barton, A Pradigm Shi in Legal Thinking, in A PROACTIVE AP-
PROACH TO CONTRACTING AND THE LAW 35 (Helena Haapio, Ed. 2008).
46. Tim Cummins, Taking the Law Out of Contracts – And Pu ing Lawyers Into
the Contracting Process, in A PROACTIVE APPROACH TO CONTRACTING
AND THE LAW 97 (Helena Haapio, Ed. 2008).
25
4. Origins and causes
ing to and resolving problems remain important, preventing causes
of problems is vital, along with serving the needs and facilitating the
productive interaction of citizens and businesses.”47 The claim for this
legal paradigm shi is based on the observation of changing economic
and social realities.48 The scope of this chapter doesn’t allow develop-
ing these sociological aspects in depth, leaving this to further research.
In a nutshell one can say that society has changed, from a nationalistic,
vertical structure, based on authority towards a globalized, horizontal,
networked and individualistic social and economic system.49 Or in the
words of Thomas D. Barton, from a system of rules, separation, and
power to one based on understanding, integration and accommoda-
tion.50 According to proactive law researchers and some sociologists,
these societal changes require a change in the role of lawyers. More
than ever in Western societies, the law a ects personal and business
life. One of the reasons for the observed “colonization of personal life by
the law”51 could be the loss of traditional authorities in todays’ society,
thereby leading to increasing litigation. According to Eric van de Lu t-
garden, lawyers in our contemporary western society are increasingly
functioning as professional substitutes for lost authority. This implies
that lawyers are asked to take over functions that go beyond their tra-
ditional role and classic legal theory. These functions require other than
legal knowledge, skills that lawyers typically are not trained in. He pro-
poses that proactive law, which as described above is inter-disciplinary
47. See Opinion of the European Economic and Social Commi ee on ‘The proac-
tive law approach: a further step towards be er regulation at EU level’, 2009
O cial. J. Eur. Union, July 28, 2009, at C 175/26, § 1;4, available at h p://eur-lex.
europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:175:0026:0033:EN:PDF.
48. E.g., Richard Susskind, The Future of Law at 292 (1998); Kaisa A.E. Sorsa &
Tarja Salmi-Tolonen, Contracting in Transition (Apr. 16, 2008) (unpublished
manuscript), available at h p://ssrn.com/abstract=1120919; Soili Nysten-Haar-
ala et. al., Contracting Capabilities in Industrial Life-Cycle and Service Business
(research summary), at 3, available at h p://wanda.uef. /oikeustieteet/siviili/
CCC%20Research%20Report.pdf.
49. Eric van de Lu tgaarden, PAMPAL Handbook, on  le with the author.
50. Thomas D. Barton, Preventive Law and Problem Solving, Lawyering for the
Future at 8, Vandeplas Publishing (2009).
51. Lawrence M. Friedman, The republic of choice, law authority and culture, Cam-
bridge Massachuse s/London at 15 (1990); Jürgen Habermas, Legitimation crisis,
London at 356-373 (1976).
26
The Past and Future of Proactive Law
in nature and by de nition takes into account social and economic reali-
ties, and its integration in law school curriculum, could help to  ll this
gap and enable lawyers to be er ful l their new role.52
5. Basic concepts of proactive law
Just like preventive law, proactive law is not new in itself;53 there have
always been proactive lawyers, or proactive elements in contracts or
legislation. An area of law where the move towards “understanding,
integration and accommodation” has already become clearly visible is
the broad use of ADR (Alternative Dispute Resolution) mechanisms in
todays’ dispute resolution practice.54
The objective of the proactive law movement is to identify and gen-
eralize this shi in legal thinking, collect and evaluate practical experi-
ences and develop theoretical studies and concepts which show what
can be gained in developing further the proactive dimension of the legal
domain and interdisciplinary collaboration between lawyers and man-
agers, or subject-ma er experts from other for example technical  elds.
Cecilia Magnusson Sjöberg clari es that the notion of law in this context
“is not equivalent to rules and regulations, but refers instead to law as
an instrument that can be shaped in a whole variety of ways, e.g. a basis
for risk analyses, legal system design and management.”55
While preventive law originated in the US, in response to the adver-
sary Common law system, proactive law has evolved in the European,
less litigation-oriented, Civil law context, which explains its di erent
focus. Also, the context in which proactive law has developed and con-
tinues to develop is very di erent from the preventive law movement
in the US. While research on preventive law and the comprehensive
law movement in general is predominantly located in US law schools,
concerned with traditional legal topics such as litigation, criminal law,
52. See generally Eric van de Lu tgaarden, PAMPAL Handbook, on  le with the
author.
53. See Cecilia Magnusson Sjöberg, in A Proactive Approach, at 1.
54. Thomas D. Barton, Preventive Law and Problem Solving, Lawyering for the
Future at 8, Vandeplas Publishing (2009).
55. Id.
27
5. Basic concepts of proactive law
constitutional law, corporate law, employment law etc., the proactive
law movement from its early stages has been truly interdisciplinary and
business-oriented. It pays particular a ention to non-legal disciplines
such as project management, quality management, contract and risk
management, legal document management, and ICT. Referring to Figure
1, presented above, preventive law so far has focused on the secondary
and tertiary level of legal care, while proactive law concentrates on the
primary causes of legal disputes.
To the preventive aspects described above, proactive law adds a pro-
motive dimension. The main objective of proactive law is helping the
stakeholders – be it individuals, businesses or legislators, reach their
objectives. For example contracts are designed as to enable the parties
to reach their common goals and implement their business plans the
way they want them to be. This implies tight collaboration between
lawyers and those implementing the contract. The parties need to reach
a common, unambiguous understanding of all clauses of the contract,
leaving nothing to unexpected ex-post interpretation by a court, which
might run counter the parties’ true interests. For the legal profession
this means a di erent type of legal counseling. Instead of making sure
that the contract is “safe” in case of non-performance or legal dispute,
the lawyer (or whoever is in charge of contract design and dra ing)
must work with those involved in the business relationship to identify,
and translate into contractual language, the parties’ goals and expec-
tations regarding scope, intentions, requirements, etc. of the business
deal. The person in charge of dra ing the contract has to make sure
that the business deal doesn’t fail and the parties reach their objectives.
This fundamentally changes the nature of the contract: it turns from a
failure-oriented risk management tool into an instrument which assures
performance, quality and success.56
The main di erences between preventive law and proactive law can
be identi ed as follows in Figure 2 ( see page 28):
56. See generally Larry A. DiMa eo, George J. Seidel & Helena Haapio, Strategic
Contracting: Examining the Business-Legal Interface, in this book.
28
The Past and Future of Proactive Law
Figure 2: Main differences between preventive law and proactive law.
Preventive law focuses on Proactive law focuses on
Managing con ict and handling problems Eliminating causes of problems, promote
sustainable relationship
Avoiding litigation Help stakeholders reach their common goals
Managing risks Balancing risk and reward, achieving desired
outcomes, i.e. success
Minimizing costs and losses Creating value for all parties involved
Professional legal care Shared care and team approach,
lawyers supporting client’s self-care
Recently more mutual in uence between European and US researchers
can be observed. On the one hand, the proactive and interdisciplinary
dimension has been added to the preventive dimension of preventive
law (see Dauers principle 4 above), on the other hand common interests
have been discovered between the European proactive law movement
and the emergent discipline of law and strategy in the US which, similar
to proactive law, aims at creating value through strategic use of law.57
Though proactive law has only developed recently, and literature,
compared to other vectors of the comprehensive law movement (see
above) is less abundant, at this stage the following principles of proac-
tive law can be identi ed:
1. Proactive law is based on legal certainty, literacy, and cross-profes-
sional collaboration. In the words of Helena Haapio, for a lawyer
helping business people navigate in unknown regions trying to  nd
out where the safe routes run, proactive law is about “localizing the
mines and preventing them from exploding.”58 Today’s legal system
evolves rapidly. Requirements for corporate compliance, environ-
mental and safety standards, regulation of the information society
etc. are constantly becoming more demanding. Therefore not only
legal experts need to be informed about the law, but management
and employees need to be aware of the legal “mines”. Lawyers, in
turn, need to be knowledgeable about the business processes and
57. George Siedel and Helena Haapio, Using Proactive Law for Competitive Ad-
vantage, 47 AM. BUS. L. J. 641-686; see alsoLarry A. DiMa eo, George J. Seidel &
Helena Haapio, Strategic Contracting: Examining the Business-Legal Interface,
in this book.
58. Helena Haapio, Introduction to Proactive Law: A Business Lawyer’s View, in
A Proactive Approach, at 21.
29
5. Basic concepts of proactive law
objectives of the company they are counseling. Recent scandals such
as Enron or WorldCom have shown how integrated law and business
are. It is not only about compliance with the law; ethical standards
and the reputation of a company are at stake as well. Therefore, in
addition to avoiding lawsuits through compliance with regulations,
companies need to engage in cross-professional collaboration and
group-learning. They need to manage their compliance with the law
and align it to business objectives. In order to be able to do this, not
only lawyers and regulators need to know the law, managers and
other actors in society need to have at least a basic understanding of
the legal “mines”. They need a basic legal literacy59, awareness, or
legal astuteness,60 which in the end can help them not only to avoid
litigation and the costs related to it, but enable them to use the law
for competitive advantage.61
2. Law and legal professionals should create economic value and there-
fore need to be outcome orientated. As the organizational behaviour
research on proactivity cited above suggests, lawyers need to scan for
change of opportunities, set e ective, change-oriented goals, and fo-
cus on accomplishments with real impact and take action and achieve
results. Preventing legal disputes may save costs and time wasted
by legal proceedings, but from an economic standpoint this is not
enough. In order to convince companies of the importance of the law,
lawyers need to be able to show to their clients not only the negative
side of law – constraints that are “in the way of business”, but the
economic value, the opportunities proactive use of the law can o er
to build solid business foundations, roadmaps for performance, trust,
and be er, sustainable business relationships.
59. Helena Haapio, in A Proactive Approach, at 23.
60. Constance E. Bagley, Winning Legally: The Value of Legal Astuteness, 33 Acad.
Mgmt. Rev. 378, 383 (2008).
61. See generally George J. Siedel & Helena Haapio, Using Proactive Law for Competi-
tive Advantage, 47 Am. Bus. L.J. 641, 667-68 (2010); Larry A. DiMa eo, Strategic
Contracting: Contract Law as a Source of Competitive Advantage, 47 Am. Bus. L.J.
727, 728 (2010); Constance E. Bagley, Winning Legally: The Value of Legal Astute-
ness, 33 Acad. Mgmt. Rev. 378, 383 (2008).
30
The Past and Future of Proactive Law
3. In proactive law the focus is on dispute pre-emption, legal risk man-
agement, rather than dispute resolution.62 Though there is need for
case studies to prove the following, the hypothesis in proactive law
is that if practiced correctly, there would seldom be need for any
dispute resolution. Many legal disputes are due to misunderstand-
ings and disappointed expectations. The objective of proactive law is
to avoid ge ing to the stage of dispute, through careful a ention to
legal clarity, early warning mechanism and enhanced collaboration
between business partners.
4. For proactive law, cross-professional collaboration between lawyers,
managers and subject ma er experts, such as the engineers in charge
of the execution of the goals set forth in a business contract, are
essential to reach common goals and to avoid problems and legal
disputes. A common understanding is necessary, which can be en-
hanced by the use of non-traditional legal communication tools such
as visualization.63
5. Creative thinking: Because of the outcome orientation of proactive
law, and as proactive law looks towards the future rather than the
past, it requires from all actors the ability to develop new ideas and
concepts in order to respond to needs, problems or challenges, some-
times by means of an original and previously non-existing approach.
6. Conclusion and perspectives
Some of the principles of proactive law enumerated above seem to be
obvious factors for successful legal counseling. Therefore some lawyers,
especially in-house or corporate counsel, when they are confronted with
the ideas of proactive or preventive law for the  rst time, suggest that
this is what they actually do. Though this might be true for some experi-
enced business lawyers who possess extensive business knowledge and
62. See also Richard Susskind, The Future of Law, at 292 (1998).
63. See generally Gerlinde Berger-Walliser, Robert C. Bird and Helena Haapio, Pro-
moting Business Success through Contract Visualization, 17 Journal of Law, Busi-
ness and Ethics, pp. 55-75 (2011); Larry A. DiMa eo, George J. Seidel & Helena
Haapio, Strategic Contracting: Examining the Business-Legal Interface, in this book.
31
6. Conclusion and perspectives
anability for strategic legal thinking, traditional young law school gradu-
ates are not educated in the proactive use of the law. Interestingly, obser-
vations by the author in the PAMPAL curriculum development project64
have shown that even students enrolled in double-degree programs such
as law and economics or JD-MBA programs seem to quickly adapt to
classic legal theory and “forget” about a truly integrated approach to
law and management. There also seems to be some lack of knowledge
or understanding related to the proactive and preventive approaches,65
which need to be addressed in future work. Preventive and proactive
law are not (only) about keeping clients out of court or making sure that
one’s client’s interests will prevail in case of a legal dispute. Proactive
law is about problem-solving, detecting real-life causes for potential
misunderstandings and failures, but mostly about fostering sustainable
relationship, enabling stakeholders to reach their goals, creating value
for businesses, individuals and society as a whole. One of the reasons
for the aforementioned lack of understanding could be that proactive
law literature so far has extensively addressed the reasons and objectives
of the paradigm shi it calls for, but to a lesser degree how to make it
happen. What will be needed in the future are more case studies, iden-
ti cation of best practices, and more distinctive methods and tools to
turn proactive law into practice.66
64. See ERASMUS curriculum development project on Proactive Management
and Proactive Business Law (PAM PAL) funded by the Lifelong Learning Pro-
gramme of the European Commission. See ProActive Management and ProAc-
tive Business Law, TURKU UNIVERSITY OF APPLIED SCIENCES, h p://pam-
pal.turkuamk. /index.php.
65. See Petri Mäntysaari, Theories of Commercial Law, Corporate Governance and
Corporate Law at 35 (2012).
66. Some interesting examples already exist, e.g. the Managers Legal PlanTM in
George J. Siedel and Helena Haapio, Using Proactive law for Competitive Ad-
vantage, Am. Bus. L. J. 641, 651-656 (2010); or Tobias Mahler, Legal Risk Man-
agement, Developing and Evaluating Elements of a Method for Proactive Legal
Analyses, With a Particular Focus on Contracts, Faculty of Law, University of
Oslo (2010); Soile Pohjonen and Ker uli Visuri, Proactive Approach in Project
Management and Contracting, in A PROACTIVE APPROACH TO CON-
TRACTING AND LAW, AT 75 (HELENA HAAPIO, ED. 2008); Antoni Brack,
A Managerial Format for a Business Legal Audit, 12 European Business Law
Review 34 (2001), see also Larry A. DiMa eo, George J. Seidel & Helena Haapio,
Strategic Contracting: Examining the Business-Legal Interface, in this book.
... 59 In doing so, this approach becomes outcome-orientated because it is built on shared values and seeks not to be reactive in that it focuses on dispute resolution rather than dispute pre-emption. 60 The use of design in this instance is not just about the designing of information in accessible and engaging formats, but is also about finding ways to make the process of development collaborative and co-creative while at the same time building processes that are not blind to matters of representation by placing the needs of the user first. 61 Focusing on processes that represent people's experiences is at the core of building a design approach. ...
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Article
In recent years, legal scholars in the United States and Europe have explored aspects of legal strategy relating to competitive advantage and the role of law as a positive force within companies. In the United States, the focus has been on law as a source of competitive advantage, while in Europe an approach known as Proactive Law has emerged. This article represents the first attempt to trace the history of these parallel developments and to merge their common themes. In applying concepts from these movements to the contracting process, the article demonstrates their potential to fundamentally change the way management perceives and uses the law. The contracting example also illustrates the opportunities that contracts and the law offer to create new value and innovate in areas often neglected by managers. Part I of the article provides a holistic overview of research by U.S. legal scholars that ranges from an examination of theoretical links between law and competitive advantage to a specific action plan that encourages firms to make better use of their legal resources. Part II examines the Proactive Law Movement and the recognition that it has received in the public policy arena. Part III provides an analysis of the intersection between these developments in the U.S. and Europe, using contract law and the contracting process for illustrative purposes. The article concludes in Part IV by emphasizing how concepts relating to the use of law as a source of competitive advantage can lead to economic success in a manner that also promotes high ethical standards.
Fostering Emotional Well-being in the Classroom Chapter 2: Skills for Emotional Well-Being. Paragraph: Responsibility: Are We Proactive or Reactive? pp 50-52 Jones & Bartlee Publishers The Seven Habits of Highly EE ective People Frankl, Man's search for meaning: an introduction to legotherapy
  • Randy M Page Stephen
  • R Covey
Randy M. Page: Fostering Emotional Well-being in the Classroom. Chapter 2: Skills for Emotional Well-Being. Paragraph: Responsibility: Are We Proactive or Reactive? pp 50-52 Jones & Bartlee Publishers, 2003, citing Stephen R. Covey, The Seven Habits of Highly EE ective People, 1992, 2004 and Viktor E. Frankl, Man's search for meaning: an introduction to legotherapy, 1959.