Why Business Leaders Need to Understand the Law

28 August, 2026

The law — both in the U.S. and around the globe — continues to change as technology advances, the social and political climate evolves and industries grow and decline. It’s more important than ever for managers and executives to understand relevant legal issues so they can make better, more informed business decisions.

Current managers, aspiring team leaders, executives and business owners benefit greatly from knowledge of legal best practices, the current state of regulations, important legal codes and the general legal trends or issues within their industry. In conjunction with legal counsel, these leaders can benefit from understanding the legal ramifications of business decisions and policies to help protect their organization from costly lawsuits, harm to its reputation and threats to its position in the market.

Earning a Master of Legal Studies can help current and aspiring business leaders gain working legal knowledge. To help you better understand if earning a Master of Legal Studies is right for you, we’ve created a list of four reasons why business leaders need to understand the law.

1. Legal Understanding Helps You Ensure Organizational Compliance

In 2025, Apple agreed to a $95 million settlement in a class action lawsuit alleging that Siri recorded users’ private conversations without consent and shared some of those recordings with third parties. This case underscores the privacy concerns and compliance challenges that arise when voice assistant technology intersects with users’ expectations of data protection. Even industry leaders can face significant legal risk as courts and regulators increasingly scrutinize how personal data is collected, stored, and used.

No matter your industry, you must prioritize compliance as a business leader to make sure your organization serves its customers, employees and community well. This includes anticipating the unforeseen: growing your understanding of current law, as well as ways the law and your industry may evolve, to help inform better business decisions.

When policy doesn’t keep up with an industry’s growth, legally savvy business leaders may have to anticipate potential compliance issues before regulations are passed to prevent future legal battles. A keen understanding of legal precedents and impending compliance regulations is of the utmost importance for large and small businesses in every field.

An Online Master of Legal Studies offers business professionals additional flexibility while developing a working knowledge of the law to better serve their organization.

2. Knowing the Law Can Help You Become an Industry Expert

Leadership and technical skills are necessary for any business leader, but you can gain even more expertise in your field when you gain a working knowledge of the codes, regulations, precedents and legal trends of your organization’s industry. Understanding the law as it pertains to your industry will better equip you to make quick and informed decisions that align with business goals and industry standards. This is especially important if you work in a heavily regulated industry like finance, technology or healthcare.

Leaders in any industry must operate within compliance regulations to protect private information of employees. Leaders in technology departments should understand relevant compliance regulations, what potential security risks with digital data management exist and how to comply with best practices to keep sensitive data safe. Those on the path to leadership can benefit from earning an MLS degree with a concentration in business law. This concentration offers coursework specific to legal concepts, principles and institutions that define and shape business relations.

3. Legal Knowledge Can Boost Your Confidence as a Leader and Decision Maker

Learning about the law and specific legal codes that affect your industry enables you to make more legally sound decisions for the benefit of your organization. You will be more confident in your judgement concerning legal matters—such as in your ability to seek appropriate counsel—and less likely to second-guess yourself.

Being able to use this knowledge more effectively can make you a more confident leader and decision maker. Your confidence can transfer to your team members, direct reports and fellow leaders, too. When you have more confidence as a leader, your team is more likely to follow your lead. With an MLS on your resumé, colleagues will trust in your legal understanding and see you as a valuable collaborator.

4. You’ll Improve Collaboration With Legal Teams

Business leaders across all parts of an organization interact with in-house or external legal teams at some point in their careers. When you understand the law, you are better able to collaborate with lawyers.

Your familiarity with relevant precedents and regulations means that you and your legal advisors may be able to spend less time reviewing need-to-know context and more time in focused, productive and efficient meetings. Legal counsel may also feel comfortable avoiding layperson’s terms because you’re familiar with the proper vocabulary, which can help reduce or eliminate miscommunication.

Clear and efficient communication is always important, but it can be incredibly vital when urgent legal matters arise, such as when new regulations affect the organization’s operations or an impending lawsuit arises that could have criminal liability for the company. No matter your function as a business leader, more effective communication with legal professionals means you can better serve your organization.

An MLS degree can help business leaders and other professionals establish real-world connections, learn legal terminology and gain a basic understanding of the law to become a better business collaborator.

Frequently Asked Questions About Legal Knowledge for Business Leaders

About the Master of Legal Studies Program at Northeastern University

This distinctive online Master of Legal Studies is for non-lawyer professionals who do not wish to practice law but would like to use the law as a means to achieve their goals in environments where legal knowledge is an asset.

Northeastern University is a leading institution that ranks among the nation’s top 10 Most Innovative Schools according to the U.S. News & World Report. In 2024, The National Jurist/preLaw awarded Northeastern Law the #1 ranking for practical legal training.

In this program, you can earn your degree in less than two years as a part-time student. The curriculum offers courses in areas such as Law and Organizational Management, Data Regulation and Compliance, Negotiation and Advocacy, and Law and Strategy.

Designed for non-lawyer professionals, the online MLS helps leaders in highly regulated industries gain the expertise to excel in their careers. Choose a general course of study through your choice of electives, or select one of five concentration options:

• Business Law
• Health Law
• Human Resources Law
• Intellectual Property Law
• Public Law and Policy