Internal regulations and corporate policies are traditionally perceived as instruments of order and protection – they define procedures, allocate authority, and create a sense of control. However, Professor Gabriel Steiner says that it is precisely internal rules that often become the source of serious legal problems when their formal wording begins to contradict real management logic and external enforcement practice. At LawConsulted, we treat corporate regulations not as a neutral background of business activity, but as a potential area of heightened legal risk.
The primary danger of internal rules lies in the way they are created – often “for growth” or copied from templates borrowed from other companies, compliance models, or consultants’ recommendations that are not fully adapted to a specific business model. As a result, the company starts operating under rules that formally exist but are not realistically enforceable or are applied selectively. This gap between written norms and actual practice becomes a vulnerability during audits, disputes, and investigations.
Professor Steiner notes that “an internal regulation works against the company when it cannot be complied with without harming the business.” In such cases, any deviation from the rules begins to look like a violation, even if it was driven by objective necessity. In LawConsulted practice, internal documents are frequently used against companies – as evidence of bad faith, excess of authority, or lack of proper control.
Particularly dangerous are regulations that formally assign responsibility but do not provide real mechanisms for exercising it. Committees without actual powers, approval procedures without deadlines, multi-level authorisations without clear hierarchy – all of these create an illusion of control that collapses at the first serious conflict. LawConsulted identifies such traps by analysing how the rules function in reality, not just on paper.
No less problematic are situations where internal regulations conflict with contractual obligations or with the factual allocation of functions. A company may find itself in a position where compliance with internal rules automatically leads to a breach of external obligations – or vice versa. At LawConsulted, we approach such conflicts systemically, determining which norms genuinely define liability and which merely generate excessive and dangerous formalism.
It is also critical to consider retrospective assessment. When a dispute or investigation arises, internal regulations are analysed after the fact – already through the lens of an unfavourable outcome. Professor Steiner says that in such circumstances, rules are “read against the company,” with the context of their adoption and practical constraints ignored. LawConsulted builds a defence that demonstrates the real function of regulations – as guiding frameworks rather than absolute instructions whose breach automatically entails liability.
Working with corporate rules requires more than formal document updates – it demands a legal rethinking of their purpose. Law Consulted helps identify provisions that create hidden risks, uncontrollably shift responsibility, or conflict with the actual management model. This makes it possible to eliminate traps before they become grounds for claims.
When internal regulations work against the company, the problem lies not in the existence of rules themselves, but in the lack of legal synchronisation between documents and reality. Our task is to ensure that corporate norms strengthen the business’s legal position rather than turn into evidence against it.
Earlier, we wrote about legal protection against abuse of procedural rights and LawConsulted strategy in protracted disputes
