There are many ways to go about translating a document, but the route you take will depend a lot on the document itself, the client’s requirements and needs, and the translator’s knowledge on the subject.
From my experience, I have been able to work with both perspectives, free and literal. I take a more literal approach in medical and pharmaceutical texts, technical/instruction manuals, scientific journals, legal texts, among others. These are fields where a literal approach is required, since the information you are conveying needs to be exceptionally clear and true to the original. There is a greater responsibility in translating these types of texts, as a misperception or lack of knowledge in the field can ultimately change the meaning of the original text, placing its validity or information at risk, and even be life-threatening. For example, if you misinterpret and, therefore, mistranslate vital instructions in a process, you can endanger the person who is using the manual. In the case of medical/pharmaceutical texts, if you mistranslate a clinical trial, you may hinder its main objective, purpose, and validity.
On the other hand, you can apply free translations to literary works, such as poems, books, music, etc. Free translations may also be applied to marketing ads, where the way of reaching out to a potential customer/client in one language, may not be the same in another language. This would be a type of localization, where you use free translation to adapt to a different culture and get your point across in a way readers will be able to relate to the information the brand/client is presenting.