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Lavatch is the countess's clown (a.k.a. licensed fool), which means he's sort of like a personal comedian. He literally has a license to say whatever he wants without getting into trouble. (Maybe you know Lavatch's colleagues, Feste from Twelfth Night and Touchstone from As You Like It?) As this play's official clown, Lavatch's function is to crack jokes, bag on all the other characters, and entertain the audience with his witty and philosophical observations.
Some literary critics think that the fool's main job in Shakespearean drama is to lighten the mood. Richard Levin argues that he's there to give the audience "an emotional vacation from the more serious business of the main action" of a play. (Source). This might be true for some other Shakespearean fools, but Lavatch's antics don't always have that kind of effect in this play. Truth be told, we think Lavatch can be sort of depressing. Literary scholar Jonathan Bate agrees with us: he calls Lavatch "Shakespeare's most cynical and lascivious fool." (Source). In other words, Lavatch is crazy horny... and he has a bad attitude about life... and he has a license to say whatever the heck he wants, which he does.
Allow us to demonstrate. At one point in the play, Lavatch suggests that relationships between men and women boil down to one thing: "Tib's rush for Tom's forefinger" (2.2.23).
What the heck does this mean? Well, "Tib" is a common name for a whore and a "rush" is a rustic wedding ring made out of reeds. That's a pretty crude way of summing up marriage, don't you think? There's also a dirty joke at work here because Lavatch is playing on the fact that a woman's vagina was often referred to as a "ring." (If you're wondering if all this has something to do with Bertram's ring, you're absolutely right. Go to "Symbols" for more about this.)