This might be a stupid question, but I'm a first time DM. Is the Thieve's Guild a legally recognized and sanctioned entity? The title Guild implies that.
Depends of the campaign world you are playing in.
In Greyhawk, the Thieves Guild has a very publicly known guild house (cf. the 1986 box, from the Ashes, etc.) and a seat in the Directing Oligarchy.
In other worlds, could be or could not : any criminal organization can call itself anyhthing it wants, doesn't mean a thing.
It calls itself a Guild for two main reasons. First, it does for its members about the same things that any other guild does: Improve their situation, negotiate with other entities on their behalf, and streamline their business administration. Second, it calls itself a guild because it gives them an air of legitimacy. In most places, though, a thieves' guild is still just as illegal as its members. In the Free City, a.k.a. the City of Greyhawk, though, it is well known and enjoys more legal influence than most such guilds, since this applies to the Age of Worms one.