More and more, companies are turning to outside general counsel (“GCs”) for assistance with their legal needs. In the past, the dominant trend was for companies to hire full-time in-house counsel for legal assistance. Part of this trend was related to the state of technology, as older technology made in-house arrangements much more attractive.
Another part of this trend, however, was simple inertia, as companies tended to fall back on these arrangements only because they weren’t familiar with other alternatives. Now, current technology has made outside GCs an increasingly viable option. Additionally, the comparative cost of outside GCs to in-house counsel, and the ability of smaller to mid-size companies that don’t have a budget for an in-house counsel to level the playing field in terms of legal power, provide powerful incentives for business owners of any size to budget for and retain outside GC.
In this post, we will discuss how outside general counsel can protect and improve your business. As we will see, outside general counsel can fulfill the same core functions as in-house corporate counsel, but GCs will do so at a significantly reduced cost.
#1: Identify Legal Issues Before They Become Problematic
Perhaps the key function of outside general counsel is the ability to identify potential legal issues before they arise. Like in-house counsel, GCs are tasked with “spotting” issues and making sure that issues don’t end up leading to expensive litigation.
Ideally, GCs will spot issues in all areas relevant to a given business – corporate governance and compliance, contract formation and breach, employment issues, intellectual property matters, business acquisitions and sales, and myriad other issues that arise during the operation and management of a business. Of course, in some cases, GCs may need to refer to another specialist if they encounter something in an area requiring additional expertise; but the primary benefit remains the same, as GCs will at least be able to identify issues and then provide the business specific guidance on those issues.
#2: Mitigate Risks in Various Situations
Another major function of GCs is risk mitigation and management. As a business owner, risk is one of the most critical things you need to be aware of. Risk management informs nearly every key decision you make. GCs can be an invaluable resource when it comes to minimizing your risk across various situations. As just one example, most business owners are aware of the potential issues which can arise from employee termination.
No matter the specifics, there may always be the possibility of a disgruntled ex-employee initiating a lawsuit over an alleged wrongful termination. Other former employees go on to compete against the company potentially in violation of non-compete or non-solicitation agreements. Your outside GC can provide guidance in this area to ensure help lessen the risk of litigation, or provide advice on resolving claims before litigation is filed.
#3: Provide References to Specialized Practitioners
As mentioned, at some point, your outside GC may run into an issue with which he or she isn’t fully conversant. In those situations, your GC will need to turn to another specialist. This is another big benefit for your company: your GC can provide direct references to an additional, trusted specialized attorneys. This reduces the time business owners spend searching for the right lawyer to handle a specialized issue.
Your outside GC can provide a direct recommendation and facilitate the communication between your company and specialized attorneys, reducing the amount of time spent on having an entirely new lawyer get “up to speed” on the issues facing your business. Communicating with many lawyers simultaneously is often a difficult burden for companies, and so if your outside GC can act as a “point person” your company will benefit substantially.
#4: Reduce Your Overall Legal Expenditures
Hiring in-house counsel puts heavy demands on a company in terms of financial obligations. Not only does a full-time in-house general counsel earn a hefty salary, there are also benefits and other perks which can be costly.
Outside GCs are a financially superior alternative when compared with this arrangement. Engaging an outside GC saves your business those expenses, as you only pay the time spent by the attorney on your specific issue. Oftentimes, outside GCs offer monthly flat-rate payment plans that allow the business owner to better budget for legal expenses while having access to the company’s outside GC a certain number of hours per month.
Whichever engagement structure you and your outside GC agree on, your company will ultimately end up saving a considerable sum of money compared with hiring a full time in-house general counsel.
Contact the Frazer Firm for Additional Information
The experienced business attorneys at The Frazer Firm serve as outside GC to small and mid-size businesses in a number of different industries. If you’d like to learn more about the potential benefits of engaging outside GC for your business, contact The Frazer Firm today or call us at 561-295-1551.
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