How Startups Can Benefit from Hiring In-House Counsel Instead of Using a Law Firm

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Larger corporations take it for granted that an in-house legal team is a prerequisite for operation. For later stage venture-backed startups, it’s more of a cost-to-benefit analysis between turning to a law firm for outside counsel or building your own in-house legal department.


Weighing Cost

When compared with hiring your own team of legal professionals,  outsourcing your legal work to a law firm appears as a pay-as-you-go form of pricing. This arrangement of outside counsel works well when legal advice and projects are only an occasional part of your company’s operations. However, when legal advice is a frequent need for your company, the costs of repeated business, re-negotiation, and communicating with an outside source start to add up. There comes a point where the increase in expense from salary and benefits for in-house counsel are outweighed by the expense of outsourcing your legal work.


Inside Knowledge

Even the most experienced firm can use only the information they are given. An open line of communication with your outside counsel can create a clearer understanding of your situation and needs, but there are still limitations. In-house attorneys are involved with the day-to-day of your business, understand your model, and know the minute details of your company. This gives them better insight into specific liabilities of your operations, a deep understanding of your key staff, and knowledge of your industry. All of this information contributes to a clear vision of the bigger picture of your company.


Anticipating Needs

The appeal of an outside counsel is that your only expenses arise during specific, limited periods of time. The drawback of this model is that outside help is unable to take a proactive approach to your legal operations. In-house lawyers can anticipate potential problems and take action to protect your company, such as ensuring compliance with regulations and intellectual property, as well as managing records.


Coordinating Outside Effort

In the even that a specific matter requires outside counsel, for instance due to conflict of interest or high volume, it’s not uncommon for companies with in-house counsel to outsource some of their legal matters. The advantage of doing so with a lawyer on-staff is their ability to better evaluate outside counsel and manage the critical matters of the case.


Help in the Recruiting Process

If your business has reached a point where legal work and insight are regular needs, then an in-house legal team will become a lynch pin of your organization. Recruiting for these types of positions entails a higher degree of rigor than entry to mid-level hiring. Luckily, talent recruitment platforms streamline the candidate search. Qualified agencies have an extensive roster of legal professionals with specialized skill sets. They also maintain databases with performance and rating criteria for incoming candidates that would otherwise be unavailable through traditional hiring processes like simple background checks. When hiring for in-house counsel, working with staffing services yields a net savings in time and resources for finding qualified lawyers.