The Benefits of an Outsourced General Counsel versus other solutions is an important topic to companies from the smallest to the largest.
There has been a steady increase in planning and establishing programs to mitigate risks in many corporate legal departments.
The role of the General Counsel has evolved into a critical leadership role with significant strategic influence.
Let us answer the starting question of “What is an Outsourced General Counsel,” and what role do they serve in your business?
Your corporate General Counsel plays the crucial role in ensuring your company functions within the scope of the law. As an essential start, your General Counsel assists and guides the management team in legal compliance. They also assist in general legal issues that arise from time to time.
The corporate decision is whether your General Counsel should be In-House or Outsourced, or BOTH.
An In-house General Counsel is a full-time employee and usually a member of your management team. These positions are typically time-consuming to fill and costly in terms of a company budget. The In-house General Counsel will usually need one or more legal aids to handle the lower-level work.
What is an Outsourced General Counsel?
An Outsourced General Counsel is a part-time, non-employee role. Therefore, their cost is a fraction of a full-time In-house General Counsel. However, the responsibilities are the same. Plus, they have their staff handle lower-level legal work. This keeps their costs, and therefore their billings to you lower than in-house paralegals.
Even the smallest of companies should have a General Counsel. Being small usually means that a full-time In-house General Counsel rarely makes financial sense. However, even with larger companies who have a full-time In-house General Counsel, having an Outsourced General Counsel on retainer makes a lot of sense.
We will get into those details below as we discuss our 21 Benefits of an Outsourced General Counsel.
Once many company insiders viewed an Outsourced General Counsel as a barrier to corporate progress. However, in today’s world, your General Counsel has become business drivers in their own right.
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Management’s Business Strategist in Challenging Times
With Pandemics, the “new normal” businesses have to learn new ways to run their businesses. This situation also means all potential legal and HR obstacles have to be identified and mitigating solutions uncovered. Which job roles can work remotely, and which one cannot? How does corporate communicate appropriately to the many team members without creating legal and team or individual morale issues?
Your Outsourced General Counsel can be the perfect team member to lead and manage these challenges. They can also help plan and guide its strategy around these arising issues.
Allows Management to Focus on the Core Business
Senior management’s daily focus is sadly mostly about putting out “fires” and running the business more so than worrying about the potential and real legal issues.
The right Outsourced General Counsel will take the burden of Contracts, Human Resource oversight, and Compliance issues off the general management team. This allows general management can focus on their critical areas of expertise, resulting in a much more efficient operation.
Business Formation and Operational Legal Documents
Often companies get started in a rush and can continue to operate for years in that manner. When this happens, many business formations and operational, legal documents are not correctly created. Or are not kept up to date as the company changes.
An Outsourced General Counsel can be the perfect legal person to go through all of these documents with an experienced fresh set of eyes and identify both omissions and risks in your current records as well as make corrective changes.
Cost-Effective Affordability Option
Companies can get the same elevated level of legal experience and expertise through an Outsourced General Counsel at a fraction of the cost they would incur with a full-time in-house General Counsel.
Young and mid-size companies, in particular, cannot justify the high financial costs of a full-time in-house General Counsel.
Even larger companies with their in-house General Counsel have peak workloads throughout the year. They find it more cost-effective to engage with an Outsourced General Counsel on a retainer basis to handle the peak workloads.
Provider of Custom Legal Services
Even the largest and best of in-House Legal Teams cannot be an expert on every legal issue. When your in-house legal team wants an expert in a specific field or is just overloaded and needs help in a particular area, they can turn to an Outsourced General Counsel for Custom Services.
Some of the custom services an Outsourced General Counsel can offer include Day-to-day consultation on business and legal matters; Negotiating and drafting contracts; Non-compete agreements; General Employment Issues; Corporate Compliance Matters, Real Estate Topics; Handling Crisis Management; Trademark Registrations; Creation and Review of Employee Handbooks; Attend Board of Directors meetings; Review and Update Corporate Governance documents.
Creates Corporate Efficiency
Having an Outsourced General Counsel on your team creates more corporate efficiency by allowing your management to focus on their essential tasks.
When a legal issue arises, your team knows who to call or email to get an answer to their legal question without wasting valuable time reaching out to the CEO, President, or COO.
Source of Proactive Risk Management
When your company is young, or your company’s in-house General Counsel has their hands full, an Outsourced General Counsel can be your source of proactive risk management.
A seasoned Outsourced General Counsel can look at where you are in your corporate processes, vendor relationships, customer engagements and recommend changes before a severe problem arising.
In this way, an Outsourced General Counsel’s financial costs can pay for themselves many times over.
Provides Responsive On-Site Service
Too many companies do not engage with an Outsourced General Counsel before a legal problem arising. When a legal problem does arise, corporate management is scrambling to find an attorney. Sadly, sometimes a poor match is made between the company management and the attorney, creating more issues in an already high-stress time.
By engaging an attorney before any legal crisis, management has the opportunity to work with the General Counsel to ensure that there is a good fit. Hiring an Outsourced General Counsel on retainer is a common way to accomplish this vital task.
Fixed Budget, No Surprises Cost
Most Outsourced General Counsels offer Retainer-based packages in addition to per-hour rates.
Having an Outsourced General Counsel on retainer makes it easier to budget your legal expenses. You know in advance what your legal fees will be each month without worrying about how much every email, text, or phone call to your Outsourced General Counsel is going to cost you.
Additionally, a quality Outsourced General Counsel will often offer rollover or refunds of unused monthly minutes to the next month. Plus, if you exceed your monthly retainer-based minutes, they will let you know “before” you do, so there is rarely a monthly milling surprise.
Can Be a Critical Addition to Your Team of Knowledge
When you hire an Outsourced General Counsel, you are adding to your Corporate Team of Knowledge.
Even if you have a full-time in-house General Counsel, they will have a distinct set of experiences separate from an Outsourced General Counsel.
This additional knowledge set is often critical to discovering different options for challenging legal situations.
Optimize the Legal Functions of the Company
There are so many ways an Outsourced General Counsel can optimize your legal functions, whether your company is exceptionally large or just getting started.
As a company grows, the company’s legal exposure, and therefore work, will increase.
However, growth is not necessarily linear for your legal department, particularly for lower-level legal work. Contract reviews, lawsuits, legal filings, to name a few, will have large peaks and valleys of staffing demands.
It will rarely make financial sense to hire full-time staff to handle the peak workloads, only to have them having no work for potentially weeks or months at a time.
An Outsourced General Counsel is a very cost-efficient way of helping your team handle the peaks while only staffing the in-house team for the more regular valleys.
Engagement is Easy Due to Familiarity
Having an Outsourced General Counsel on retainer is a stress reducer, management time saver, and money saver.
Without a consistent General Counsel, each time a legal question arises, you have to spend valuable time bringing the legal counsel “up to speed” on your company, you, and your team members. This repetition not only adds to your stress levels but also wastes your valuable management time. Plus, you are repeatedly paying for the legal counsel to learn these essential things.
Serves as a Valuable Resource to the Company
An Outsourced General Counsel, particularly one your company has had on retainer for some time, will be a powerful and useful resource.
With every new assignment, the lawyer’s knowledge and understanding of the company’s operations grow, as does your management team’s experience working with the Outsourced General Counsel.
Peace of Mind for Your Board of Directors
Your Board of Directors (BoD) can be both demanding and nervous creatures, particularly with the smaller companies they oversee. They know that younger companies will “cut corners” through a combination of ignorance and cost-savings.
Having an Outsourced General Counsel on your team and attending those monthly or quarterly board meetings can go a long way in calming their concerns on these matters.
Streamlines Company Legal Functions
Without your company having an Outsourced General Counsel, other employees within your company will spend their time doing their best to handle the legal matters.
As your general management staff is not trained to handle even the simplest of most legal matters, much less the more complex ones, these team members neglect their primary responsibilities. Scarier is these team members will often be addressing legal issues potentially incorrectly!
By having an Outsourced General Counsel on your team, all your legal issues can be addressed by one person, allowing your other management team members to focus on their primary responsibility.
Custodian of Employee Safety and Health
In our Pandemic, a new management responsibility has emerged – the role of the “Chief Medical and Employee Safety Officer.”
There are so many legal issues around how a company has to deal with both employees and outside agencies. County Health Departments and even the CDC agencies may have to be engaged. An Outsourced General Counsel is often the best choice as to who should handle these issues.
Employees are stressed dealing with layoffs, remote schooling, working from home, and more. They need a single point of contact to help them know what their employer can do to assist.
Skills Gaps and Outsourcing Mitigation
Your in-house Legal team will often be the first to state that they need to outsource some of the company’s legal work.
A skills gap or mitigation situation can occur due to a wide variety of reasons. There could be a spike in workload that they do not have the staffing to handle in the needed time frame. They could have some legal staff out due to medical reasons. There could be a legal case that no one on the legal team has the experience to handle. There could be a legal situation that will take all of the focus of one or more members of the in-house legal team, and an Outsourced General Counsel is needed to pick up those team members’ workload.
These are only a few examples of how an Outsourced General Counsel can solve an in-house skills gap or mitigate other internal legal challenges.
Loss of in-house General Counsel
Often a company will find itself suddenly or even in a typical situation where they lose their in-house legal counsel. The loss of an in-house general counsel could happen in various conditions that include pregnancy, illness, termination, or even death of your in-house legal counsel.
An Outsourced General Counsel is an excellent solution for this situation while the company waits for the return of their in-house legal counsel or hiring a replacement.
Often a company may find that their temporary Outsourced General Counsel becomes the solution for handling all of the company legal issues for the long-term.
Technology Adoption Champion
According to Thomson Reuters, the use of technology and AI (Artificial Intelligence) in corporate legal teams is rapidly rising. Of 207 legal teams, as many as one-third were already using AI to help streamline and automate tasks and processes, reducing costs, reducing errors, and increasing productivity.
In legal teams, the terms AI, Cognitive Computing, and Machine Learning are used interchangeably.
Hiring an Outsourced General Counsel familiar with the current Technology options can be one way to quickly gain the benefits of modern Technology adoptions into your team.
Champion and Steward of Diversity and Inclusion
We are all keenly aware of the continuous need to be conscious of diversity and inclusion within our companies. However, company management is usually focused on other issues such as corporate growth.
It is critical in today’s society that, as corporate management, we do not lose sight of the importance of both diversity and inclusion within our companies and even the vendors that we chose.
Your Outsourced General Counsel is often the perfect match to manage this critical company-wide issue.
Legal Field Mentor
No one on your management team should be expected to have the knowledge of a lawyer, except, of course, for members of your legal team.
However, there is immense value in having an Outsourced General Counsel on your team. As legal issues arise, brought to light by different team members, they will be working with those impacted team members to solve the problems.
Your management teams’ members learn from your Outsourced General Counsel how they handle the issue and how they are not, which will impart a valuable learning lesson. In the future, those learning may well allow costly legal situations to be avoided, saving time, money, and stress.
My goal with this article is to ensure that a corporate leader is clear on at least 21 Benefits of an Outsourced General Counsel that I am aware of as a lawyer.
I hope you find this article helpful in your decision-making and encourage you to reach out to me with any questions you might have.
With Best Regards,
** Information contained herein is not to be considered as legal advice. Please consult your attorney for legal advice on this or any legal matter.