A general counsel can be a very valuable addition to a company. This is particularly true when the company requires extensive internal or external legal services. The decision of when to hire your first general counsel should be made based upon a cost-benefit analysis. The costs of an in-house counsel concern the salary and other benefits associated with the counsel. Fortunately, there are cost-saving methods for hiring a general counsel, such as hiring a part-time or outsourced general counsel. These methods save many of the monetary costs associated with the general counsel, but they augment some other problems, such as continuity of information, speed, and efficiency.
Below, we discuss the primary responsibilities of a general counsel – legal advisor, representative, and service provider. In discussing each of these roles, you will understand the benefits associated with the general counsel. This is the first step in completing a cost-benefit analysis.
Legal Advisor to the Business
The general counsel is a legal advisor to the business. She issue-spots and researches specific questions to provide targeted legal advice to other company professionals. The objective of the counsel is to make certain all actions taken are legal, in compliance with applicable regulations, and does not subject the company to liability. Matters over which a general counsel typically advises as company include:
Corporate Governance – The general counsel will advise on federal and state governance procedures. Corporate governance matters can be complex. Failing to follow appropriate procedure risks liability to the company.
Regulations – All businesses are subject to numerous regulations. The general counsel will become proficient in general and specific regulations affecting the business. She will make certain other professionals are aware of the appropriate procedures to remain in compliance.
Employment Law – All businesses are subject to either state or federal employment laws. Employment laws require extensive disclosures. Further, if your business hires or fires an employee/independent contractor, it is important to comply with these laws to avoid a lawsuit. General counsel will advise on the disclosure or notice requirements as well as the process for onboarding and offboarding an employee.
Litigation – A general counsel will provide advice to avoid or manage the litigation process. This may include strategizing how to handle litigation defense or whether to pursue a legal action against a third party.
These are simply common examples of how a general counsel advises an employer. Talk to the professionals a LawTrades to understand the specific areas in which a general counsel will advise your business.
Legal Representative of the Business
A company may be required to hire outside legal professionals. This is common when the company undertakes a major transaction, such as litigation, a merger, acquisition, or equity or debt offering. The general counsel will serve as the company’s representative in working with these legal professional. The general counsel will keep the company executives informed of the status of legal issues and help the executives make decision on how to proceed.
Legal Services for the Business
A general counsel will be required to perform many legal services, beyond giving advice, to the company. As such, a business should choose a general counsel with subject-matter knowledge in the various legal issues affecting the company. If the business is extremely burdened by a single area of law, it is advisable to search out a general counsel who is an expert in said legal area. Some examples of routine legal services that a general counsel will provide to a company include:
Contract Review and Drafting – General counsel bears primary responsibility for drafting and reviewing legal contracts or agreements.
Regulatory Compliance – General counsel will either review or make the filings necessary to comply with the myriad federal and state regulatory requirements on a business.
Collections – The general counsel may be integrally involved in the collections process. She may undertake collection efforts, such as writing a demand letter or initiating or defending minor litigation. If the company faces a major legal issue, she will likely hire outside counsel with greater resources and expertise to handle the matter.
A cost-benefit analysis compares the benefit and detriments of a particular course of action to determine whether or not to undertake said action. In this situation, you are evaluating whether or not to hire a general counsel. This determination is subjective to the business. The important thing to remember is that each of the costs and benefits are subject to change. Hiring a general counsel may become less costly at some point in the future. Likewise, the benefits of a general counsel may wane at some point. In any event, at whatever point the benefits begin to outweigh the costs, it is the right decision to higher a general counsel.
The trained professionals at LawTrades can help you determine when is the right time to hire an outside counsel. LawTrades can even serve as your outsourced general counsel if that is the best option for your business.