Why your company needs its own in-house legal department
By Tina De Maere – May 11, 2023
Many companies tend to spend as little money as possible on their legal issues. Seeing legal departments as merely a cost center, businesses prefer to outsource their legal work to law firms. But is this always the most optimal approach?
Not only do attorneys eat a large part of your budget; often, they also don’t possess the business-oriented attitude you can find in a company lawyer. For many companies, therefore, better solutions exist for solving their legal matters.
In this blog, we explain why your company needs its own in-house legal department!
Company lawyer vs. law firm: prevent vs. cure
There are mainly two ways of tackling legal problems: either, you can try to prevent these problems from arising, or either you can try to solve a problem once it has presented itself. This distinction lies at the heart of the difference between company counsels and law firms. While the latter are mostly focussed on curing complications, the former will utilize the opposite approach.
Law firms and attorneys are specialists in analyzing legal problems. Their expertise and added value mainly lies in formulating complex legal reasonings, mediating, solving disputes outside of court and, if necessary, instigating legal proceedings and pleading before a court or tribunal.
Corporate counsels, on the other hand, are experts in analyzing risks and preventing legal problems from occurring in the first place. Their expertise often consists of negotiating and re-writing contracts, advising and educating colleagues and peers on legislation and strategy, communicating with other departments etc. The focus of an in-house legal team is collaborating with the business partners to find effective, efficient solutions.
In conclusion, a company lawyer will try to curb legal risks and prevent your company from getting into trouble, while law firms will mostly appear in the process when legal problems have already arisen.
The advantages of an in-house legal advisor
Nevertheless, not all law firms limit themselves to this approach. Some attorneys do in fact provide precautionary legal advice, acting more as an external legal advisor than as an attorney-at-law in those cases. Where, then, lies the difference between this type of lawyers and corporate legal counsels?
The major point here is that, in contrast to an attorney, an internal legal counsel is an integral part of your business. Company lawyers find themselves in a constant interchange with all other departments (marketing, finance, procurement etc.). Because of this mutual interdependence, legal counsels cannot only give legal, but also strategic and operational advice. Thanks to their proactive and business-oriented mindset, they can help your company move forward way beyond their legal competences.
External advisors, on the other hand, can’t offer this kind of hands-on approach. Because they don’t possess all the necessary information and because they don’t have the same interconnectedness, they cannot provide the same ‘all-in’ advice as a permanent legal counsel.
Another interesting advantage is that an in-house lawyer in a permanent role will be at your disposal full-time. Being on the payroll, they fall under the authority of their employer. They can answer urgent questions, do research, attend last-minute meetings etc. Law firms and external advisors, who often work for multiple clients at the same time, will not always be able to offer the same flexibility.
A provisional solution: legal interim management
If hiring an extra employee might be too big of a step for your business, a temporary solution might be to hire a legal interim manager. Legal interim managers offer the same services as in-house counsels, but on a temporary basis. They can be hired for full-time or part-time assignments.
The strengths of an interim manager are that they adapt very quickly to new environments and are operational in no-time. Next to that, you won’t be charged by a full team of expensive attorneys, but only for the services provided by this particular consultant.
If the collaboration with an interim consultant runs smoothly, you could consider hiring them on a permanent basis after the assignment takes an end. From that point on, you can start creating your own in-house legal department!
Ready to hire a freelance counsel or permanent in-house lawyer? Contact us and find out how we can help your business!