When should a company should hire their first in-house lawyer? Most medium to large companies employ their own team of lawyers, but it’s rare to find a start-up or even a growing SME with their own legal team. Sometimes a founder might have a legal background, which greatly benefits that start-up, but often most companies don’t have their own dedicated lawyer. That’s unfortunate because they miss out on the benefits that an in-house lawyer brings.
Not only do in-house lawyers act as the first port of call to the executive for legal advice, but they also work as business partners and advisors. So, at what point should a company hire their own in-house lawyer? And are there alternatives?
In my view it’s no longer an “all or nothing” decision. If a company doesn’t require a full time employed lawyer, there’s an increasing array of alternatives for them to consider.
Using an external law firm
By far the most common approach for business on the path to expansion is to contact a trusted law firm (or any law firm, for that matter). It’s usually done to fight a fire, such as to respond to litigation, review or draft an urgent contract or deal with an employment issue. Company executives, understandably, haven’t spent much time in the early stages of business considering their future legal needs, and usually the first lawyer they hire is a referral from friends, colleagues, or family. Specialised law firms are great for companies, though it’s rare to find one that has a true understanding of their client’s business in the same way a General Counsel does.
Flexible legal resourcing
Legal resourcing companies – large and small – are set to become a permanent fixture in the legal landscape. They connect companies in need of legal support with a pool of talented lawyers who are available to work on an interim basis. The difficulty with these arrangements is that they do tend to be interim and are not really scaled to growing companies that might need the same lawyer ad-hoc – for example to periodically negotiate contracts with clients as and when they arrive.
What it means for growing companies
Recent years have seen big changes in the way legal services are delivered, with the great outcome that we have better access to lawyers than ever before. However, do any of these developments really rival the benefit of a start-up or growing SME having their own “go-to” equivalent of a General Counsel? Unlike private lawyers, General Counsel are deeply familiar with the client’s business, and provide legal advice that can be implemented by the business. They are a part of the team, and the success of the business is linked to their own success. They also know the client’s risk profile, so can invest time into particularly risky transactions and give a lighter touch on less risky work. That’s something that I’ve found the traditional law firm (for a variety of valid reasons) have difficulty doing.
Outsourced General Counsel
Small businesses need access to an outsourced external General Counsel / In-House Counsel who they can trust to oversee all their company’s legal needs. A lawyer that is as capable of discussing business development as they are advising on a contract and is the first port of call when trouble arises. Unlike the traditional role, this lawyer doesn’t need to be a permanent full-time employee of the company and can scale their engagement. It could be through periodic meetings to discuss legal strategy, periodically negotiating contracts or updating policies and handbooks. The key theme is that the same lawyer knows the business and is their closest equivalent to what we now know as the General Counsel.
How does Quarterback Law help?
Quarterback Law offers outsourced legal counsel and interim legal support. You can work with Dane to arrange ad-hoc legal advice or to handle overflow work for your busy legal team. Dane has drafted suites of contract templates for emerging companies, negotiated them, and trained his clients on what are the key issues to look out to help them to help themselves. He has also drafted and advised on workplace policies, legal strategy and risk.
