Memorandum of Advice: When Should Your Business Use One?

Running a business in Australia means making decisions with real legal consequences. Whether you’re signing a major contract, navigating an employment issue, or weighing a strategic move, clear written advice can help you move forward with confidence.

That’s where a memorandum of advice comes in. It’s a practical, plain-English document from a lawyer that answers a specific legal question, sets out the reasoning and risks, and outlines what to do next.

In this guide, we’ll explain what a memorandum of advice is, when it’s worth asking for one, how it’s structured, and how to brief your lawyer so the advice is practical and actionable. We’ll also cover privilege and confidentiality (including when sharing a memo can risk legal professional privilege), plus the key business documents that often sit alongside a memo to reduce risk in day-to-day operations.

Our aim is to keep things straightforward and useful, so you can make decisions faster and with the right protections in place.

What Is a Memorandum of Advice in Australia?

A memorandum of advice (sometimes called a legal memorandum or memo of advice) is a written document prepared by a lawyer that answers a defined legal question. It identifies the relevant law, applies it to your facts, and recommends next steps.

For Australian businesses, it’s a tool you can share internally with decision-makers so everyone understands your legal position and the practical options available.

What does a typical memo include?

• Background: A short summary of the facts and documents the advice is based on.
• Issues: The specific legal questions the memo will answer.
• Applicable Law: The legislation, cases and contract terms that are relevant to your situation.
• Analysis: How the law applies to your facts, including risks, grey areas and alternatives.
• Conclusions and Recommendations: Clear answers and practical action steps, prioritised where helpful.
• Annexures (if needed): Key documents or extracts that support the advice.

Good advice is thorough but readable. You should be able to hand the memo to a co-founder or director and have them quickly understand the issue, the risk, and your options.

When Should You Ask For A Memorandum of Advice?

Emails and quick calls are great for simple questions. A written memorandum is better when decisions are high-stakes, the law is complex or uncertain, or you need a clear internal record to support governance and risk management.

Common scenarios where a written memo adds value

• High-value contracts and transactions: Before you sign (or exit) a major supplier agreement, Heads of Agreement, business sale, or commercial lease, a memo can unpack key risks, unusual clauses and fallback positions so you negotiate from a stronger footing.
• Employment and HR decisions: If you’re considering a redundancy, performance management, or changing roles and hours, written advice helps you apply fair process and comply with your obligations. Pairing this with a robust Employment Contract can reduce disputes down the line.
• Regulatory compliance and potential breaches: When you’re dealing with ASIC, the ACCC or a safety regulator, or working through potential non-compliance (for example, misleading conduct risks under section 18 of the Australian Consumer Law), a memo can map out obligations and the steps to rectify issues.
• Disputes and litigation: If you’re assessing prospects before sending a letter of demand or defending a claim, written advice helps you weigh costs, risks and settlement options.
• Restructures, capital raising and governance: When you’re bringing on investors, changing your structure or updating governance documents, a memo helps directors make informed decisions alongside your Company Constitution and related board materials.

Why written advice (not just verbal)?

• Clarity and consistency: Everyone reads the same advice and recommendations, which reduces misunderstandings.
• Decision support: A memo sets out options, pros and cons, and recommended steps so you can choose with confidence.
• Governance record: For significant decisions, keeping a written record helps demonstrate careful consideration and due diligence if your process is later reviewed.

While following well-reasoned advice can help show you acted reasonably, outcomes always depend on the facts and the law that applies. Treat the memo as a decision-making tool, not a guarantee.

What Should Be Included In A Memorandum of Advice?

Every memo is tailored to your question. This structure keeps things clear and usable:

• Header: Your business name, date, author, subject, and purpose (e.g. “Board decision”, “Negotiation strategy”, “Regulator response”).
• Facts: A concise, agreed set of facts and the documents reviewed (contracts, emails, policies).
• Issues: The questions to be answered, framed plainly (“Can we terminate for convenience?”, “What steps are required to lawfully stand down this employee?”).
• Law: The legal framework, including legislation, cases and contract clauses.
• Analysis: Application of the law to your facts, considering counter-arguments and practical constraints.
• Conclusion and Recommendations: Direct answers and a practical plan (with timelines or draft wording, if relevant).
• Annexures: Supporting material (e.g. key clause extracts or a timeline).

If you expect to commission multiple memos (for example, across different business units), ask for a consistent template so managers and directors can quickly find the key parts they need.

How Do You Brief A Lawyer For A Strong Memo?

A clear brief leads to clearer advice. Here’s a simple process you can follow.

1) Define the question

Be specific. “Can we end this supplier contract early without paying liquidated damages?” is better than “What are our options?”. If there are multiple questions, list them in order of priority.

2) Provide the facts and documents

Share a short, chronological summary with the key documents (wording matters). Include contracts, emails, meeting notes and any relevant policies. If you’re unsure whether something is relevant, include it and flag your uncertainty.

3) Explain your objectives and constraints

Let your lawyer know what “good” looks like (e.g. continuing supply at a reduced volume) and any non-negotiables (e.g. no disruption to key customers). This helps tailor the recommendations.

4) Ask for practical recommendations

Request a clear recommendation section with options, risks, suggested timelines and, where appropriate, draft communications (such as a notice letter or policy update).

5) Agree scope, timing and format

Confirm timeframes, cost, and whether you need the memo to support a board decision or negotiations. If you want a short summary up front, ask for a one-page executive summary.

If you prefer an end-to-end fixed-fee approach to receiving written advice, Sprintlaw’s Legal Advice Package is designed for exactly this kind of matter.

Privilege, Confidentiality And Who Can See The Memo

Most legal advice to a client is protected by legal professional privilege, which helps keep the advice confidential. To maintain privilege, treat the memo carefully and limit circulation to those who need it for the purpose of obtaining or acting on legal advice.

Who should receive the memo?

• Internal only: Circulate to the relevant decision-makers (e.g. the project lead and the board). If your board is making a decision based on the memo, keep the advice with your records and consider minuting that the decision was made following legal advice. Where a formal resolution is needed, tools such as a Directors’ Resolution Template can help document approval.
• External sharing: Think carefully before sharing a memo with third parties (for example, auditors, insurers, counterparties or regulators). Sharing legal advice more widely can risk waiving privilege, which means you may lose confidentiality over that advice.

Should you give the memo to a regulator or auditor?

Sometimes you’ll want to demonstrate that you’ve taken advice and acted reasonably. However, providing a memo itself can waive privilege. A safer approach is often to share the outcomes of the advice (for example, the policy you implemented or steps you took), rather than the advice document. Always seek legal guidance before sharing legal advice outside your organisation.

Using internal “memos” for routine notes

For low-risk, routine matters, teams sometimes keep internal notes that resemble a simple memo format (background, issue, action items). This can be helpful for record-keeping, but keep in mind that only qualified lawyers can provide legal advice. If a decision is high-stakes or uncertain, get a formal, privileged advice memo.

Helpful Documents That Often Sit Alongside A Memo

A memo will often recommend putting stronger contracts and policies in place. Having the right documents can reduce risk and make day-to-day decisions easier.

• Customer or Service Terms: Clear terms set expectations, limit liability and outline payment and performance obligations.
• NDA (Non-Disclosure Agreement): Use an Non-Disclosure Agreement when sharing confidential information with suppliers, contractors or potential partners.
• Employment Agreement: A tailored Employment Contract sets out duties, hours, pay, IP and restraints, and helps you comply with workplace laws.
• Privacy and Data Practices: If your business is covered by the Privacy Act or chooses to adopt equivalent standards, a Privacy Policy explains how you collect, use and store personal information.
• Shareholders Agreement: If there are multiple owners, a Shareholders Agreement covers decision-making, founder roles, exits and dispute mechanisms.
• Company Constitution: A customised Company Constitution can refine director powers, share rights and processes beyond the default replaceable rules.
• Consumer Law Compliance: Where you’re selling to consumers, ensure your terms, advertising and refunds align with the ACL. For targeted help on consumer guarantees or advertising risks, consider getting advice through our ACL Consultation Package.

Not every business needs every document on day one, but having the core contracts in place early will save time and reduce disputes. Your memorandum of advice can prioritise which documents to tackle first.

What about templates?

Templates can help you move quickly, especially for routine agreements. That said, key clauses (like indemnities, limitations of liability and IP ownership) are the parts that matter most and should be tailored to your risks. Where a decision or deal carries material risk, pairing a tailored contract with a written advice memo gives you both the “what to do” and the “how to document it”.

Key Takeaways

• A memorandum of advice is a clear, written opinion from a lawyer that answers a specific legal question and sets out practical next steps.
• Use a memo for high-stakes or complex decisions, where you need a reliable internal record and clear recommendations for decision-makers.
• A strong memo is built on agreed facts, targeted questions, relevant law, balanced analysis and a practical action plan.
• Protect privilege by limiting circulation and seek guidance before sharing legal advice with auditors, insurers or regulators (as this can risk waiving privilege).
• Expect the memo to recommend stronger contracts and policies; documents like an NDA, Employment Contract, Privacy Policy, Shareholders Agreement and Company Constitution often sit alongside the advice.
• Brief your lawyer with a clear question, the key documents and your commercial objectives so the recommendations are precise and actionable.

If you’d like a consultation about commissioning a memorandum of advice for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.