In order pressure for corporations to properly react to increased pressure to be as effective and cost-efficient as possible, CEO’s are not just bringing legal work in-house, but are retaining a lawyer who acts as general counsel to the company without the company having to pay a salary and benefits associated with a full-time employee. The days of relying 100% on outside counsel are over. It is just not efficient or cost effective to do so anymore. Companies are taking the alternate route of retaining a lawyer with not only specific legal talents, but also specialized knowledge of the industry the company works in. This is the trend because a company is not just getting a lawyer, but also getting someone who knows your business intimately. CEO’s are starting to recognize that when you retain a lawyer to act as in-house counsel (outside general counsel), they start to understand the business more. To be most effective, outside general counsel should not only have a full understanding of the organization’s business and office culture, but short and long term goals as well.
In the American business environment, every company will need a lawyer at one point or another, but just how to find and retain that legal counsel can be source of debate.We all know that one person, or perhaps you are that person, who started a company from nothing and grew it into a successful business. Start-up companies often need assistance with basic contract review or understanding compliance procedures. As the company grows from a start-up into a profitable corporation, many executives take the next step of either retaining outside counsel in the form of a law firm or the company may instead pick the in-house counsel route. Both options can be very expensive. The alternative is to retain a lawyer who is not an employee of the company, but a retained lawyer who acts as outside general counsel. A sort of in-house counsel that is an independent contractor, but devotes a large portion of their time to the company and its needs.
For many companies, consideration of this outside general counsel arrangement is a worthwhile step. Not only may there be potential legal cost savings, but bringing someone onboard and inside the executive team may also help ensure the company’s vision is maintained. When searching for such counsel, a company will also be wise to select a candidate who actively maintains social connections and ties to local legal counsel and law firms. This is important because, as many companies fail to anticipate, hiring outside general counsel does not necessarily eliminate the need to retain outside counsel for specific projects or actions. Thus, the ideal outside general counsel will be able to easily access and coordinate with appropriate outside counsel.
When a legal matter is sent outside the company, the outside general counsel serves not only to select the best outside firms for specific case types, but serves as a watchdog on those cases, ensuring that the company is not being over-billed and that matters are being handled properly. A company needs to understand that rather than being a hired gun brought in to consult on individual problems after the fact, an outside general counsel is, or should be, part of the team before, during and after company projects. The outside general counsel should be able to understand the company’s long-term objectives in order to tailor advice to the best interests of the company. A good outside general counsel working in a proactive manner instead of reactive will help a company anticipate and prevent legal problems before they arise, while maintaining company values.To foster this working environment, a company should encourage its executives to keep outside general counsel in the loop by discussing and brainstorming plans and strategies with them regularly. This has the potential to reduce future legal expenses, which most companies should cite as a goal.
The right outside general counsel does not just bring experience to the table. Once they are part of your staff, they bring peace of mind. Having immediate access to a licensed attorney who is focused on your business is truly unbeatable. It can also be the difference between success and failure on not just a given deal, but the difference between success and failure of the business itself.