General Counsel Service is an important part of any business organisation. There are regular legal matters that need to be handled besides specific legal issues that have to be encountered from time to time. Whether to have an in-house general counsel or to engage outside general counsel services depends on the requirements and affordability of an organisation.

New and smaller businesses generally do not have the funds or even the need to hire a full-time in-house general counsel. Though an in-house general counsel is of great help, hiring one is not feasible for a company in its initial stage of existence. The funds that would be required to pay the general counsel could be utilized in some more productive areas.

For companies that are faced with this predicament, outsourcing the general counsel services is a better and more cost-effective option. For general matters of legal compliances, contracting, vendor supplier agreements and other day to day legal issues, it makes sense to engage outside general counsel than to appoint a permanent in-house general counsel lawyer. It is lighter on the pocket and brings with it more expertise and experience. More and more companies are outsourced general counsel services these days. In this article here we look into some of the reasons why companies prefer outside general counsel.

Cost Advantage

Though in-house general counsel is desirable, many companies cannot afford to have one as it has become a highly paid job these days. With outside general counsel you can keep your legal cost under check. You have a fair knowledge of the legal cost your company would need to pay per month or whatever the billing cycle might be. Since the lawyers have variable hourly rates depending on the work load and the spike in legal activities, it would be prudent for companies to contract outside counsel on fixed cost basis. According to a renowned lawyer who runs a law firm that specialises in providing outside general counsel services, the last thing a lawyer would want is to lose clients because of the mounting costs. Therefore, lawyers and law firms strive to eliminate those concerns by ensuring cost predictability and consistency during the entire business cycle.

Lesser Risk

Though the primary reason for outsourcing general counsel services is to keep a tab on the legal cost, it can also bring down the company’s business risks. The experience and expertise that an outside general counsel brings with itself can potentially mitigate the business risks of a company. The outside Counsel will be able to provide expert guidance to clients in adhering to the legal requirements and also help them make informed decisions with regards to their business. Businesses can stop worrying about the legal aspect and focus on their core area of business operations. It’s similar to hiring an architect to build a home, without whom it would be stupid to go ahead and build it on your own. Expert legal advice is paramount for running a business smoothly.

Efficient Functioning

The outside general counsel plays a crucial role in the efficient functioning of an organisation. Its role is as critical as any other business consultant. As the outside counsel gradually develops an understanding of the client’s business, he/she can utilize his/her experience and expertise to foresee any legal issue before it actually surfaces. They can utilize their knowledge to take timely actions and avoid any future legal problem. Instead of being reactionary they work in a proactive manner and pre-empt any potential problem. If there are lesser problems to worry about, the efficiency of an organisation will automatically improve.

Wider Expertise

Outside general counsel generally have expertise in multiple areas of law besides being networked to lawyers who specialise in different fields of law. The in-house general counsel may not have these attributes. Legal issues are rarely limited to just a few categories and, therefore, hiring the right outside general counsel can give organisations access to expert knowledge across varied legal domain. They can leverage their knowledge and connections to manage all your legal matters and coordinate with different lawyers who have expertise in various departments of law as the case may be, and at the same time keeping a check on the legal spends.

Conclusion

As pointed out earlier if your organisation doesn’t have the budget to employ a lawyer in-house, engaging outside general counsel services is the best option. Even if a company has the financial strength to employ an in-hose counsel, it doesn’t make sense to hire one if the volume of legal work is not enough to justify the expenditure that would be incurred. Businesses that outsource general counsel service end up spending much less on legal cost and at the same time get much better service. Smaller and newer companies tend to gain the most by taking this approach.