Choosing the right legal representation is a crucial decision that can significantly impact a company’s future. Just as an in-house legal team plays an integral role in a company’s operations, an outside general counsel can provide invaluable legal services while affording the flexibility and scalability not found with in-house counsel. In this article, we will discuss when your company likely needs outside counsel and the key things to consider when choosing the best outside general counsel to meet your needs.
When to Consider Outside General Counsel Representation
Identifying the right time to engage outside general counsel can have a profound impact on a company’s operational efficiency, legal security, and overall success. Recognizing when your in-house resources are stretched, understanding when specialized expertise is needed, managing significant business transactions, and administering specific legal tasks are all scenarios where outside counsel can bring substantial benefits.
But the engagement of outside counsel isn’t just about addressing a current need. It’s about leveraging external expertise to strategically support your business activities. Here’s a deeper look at specific scenarios where outside general counsel can be particularly beneficial:
When in-house legal resources are stretched thin: Even the most effective in-house legal teams have their limits. There may be times when the workload exceeds the capacity of your in-house team due to a sudden surge in legal needs, such as during a business expansion or when dealing with a legal dispute. Bringing in outside counsel can alleviate this pressure, allowing your in-house team to focus on their core tasks while ensuring all legal matters are handled promptly and proficiently.
For complex legal issues outside of the in-house team’s expertise: In-house legal teams are often generalists who can handle a broad spectrum of legal matters. However, there may be complex legal issues that require specific expertise or specialization, such as intellectual property rights, complex construction projects, or cybersecurity regulations. In these instances, engaging an outside counsel with the necessary knowledge can ensure that these matters are addressed with the appropriate depth of knowledge and skill.
During major business transactions like mergers or acquisitions: Large business transactions are usually fraught with legal intricacies. The ramifications of missing a critical legal detail during a merger or acquisition could be severe and costly. Outside counsel with experience in these matters can provide the necessary due diligence, contract drafting and negotiation, regulatory compliance, and risk management to ensure a smooth transaction.
To handle specific legal tasks, such as corporate governance or regulatory compliance: Corporate governance and regulatory compliance are crucial aspects of a company’s operations that require thorough legal understanding and experience. In addition to the technical aspects, they also require a deep understanding of best practices, corporate culture, and the regulatory landscape. Hiring outside counsel with extensive experience in these areas can enhance the efficiency, compliance, and ethics of your business operations.
Types of Business Activities That Benefit Most from Outside Counsel
Navigating the crossroads between business operations and the legal landscape requires a deft touch. Certain business activities, in particular, can greatly benefit from the expertise and guidance provided by outside counsel. These include intellectual property matters, litigation, real estate transactions, and regulatory investigations or audits. When these situations arise, outside counsel serves as an extension of your in-house team, bringing their specialized knowledge to bear on these complex issues. Here are a few examples:
Intellectual Property Matters: From patent filing and protection to managing copyrights and trademarks, intellectual property matters are complex and require specific legal expertise.
Litigation: Whether it’s employee disputes, contract breaches, or other legal conflicts, outside counsel can provide objective, skilled representation.
Real Estate Transactions: Real estate transactions can be filled with legal complexities, from contract creation to zoning compliance. Experienced outside counsel can help ensure these transactions proceed without legal hiccups.
Regulatory Investigations or Audits: Companies in highly regulated industries, such as healthcare, financial services, or energy, can benefit from outside counsel’s expertise during regulatory investigations or audits.
Companies That Benefit Most from Hiring Outside General Counsel
While virtually all companies can find value in outside general counsel at some point, certain types of companies may derive particular benefit. These include start-ups and small businesses, companies in highly regulated industries, and those undergoing rapid growth or change. For these companies, outside counsel can offer the targeted expertise, flexible capacity, and cost-effectiveness that are often crucial for their success. Here are a few types of companies that can typically benefit the most from outside general counsel:
Start-ups and Small Businesses: These businesses often lack the resources to maintain an in-house legal team. An outside general counsel can provide the necessary legal support without the overhead costs of a full-time in-house team.
Companies in Highly Regulated Industries: Businesses in industries like healthcare, finance, construction, development, and pharmaceuticals face intricate, ever-evolving regulations. Outside counsel with industry-specific expertise can ensure ongoing compliance and mitigate the risk of regulatory penalties.
Companies Undergoing Rapid Growth or Change: Whether it’s through mergers, acquisitions, or rapid organic growth, companies that are quickly evolving can face a host of complex legal challenges. Outside general counsel can provide the necessary legal guidance and support during these critical periods.
By understanding when to bring in outside general counsel, which business activities can benefit from their expertise, and what types of companies can gain the most, businesses can make strategic decisions about legal representation that enhance their operational efficiency and success.
However, understanding when and why to engage outside counsel is only the start. It’s equally important to know what kind of legal services outside general counsel can offer.
Typical Legal Services Provided by Outside General Counsel
To function as an effective extension of your business, outside general counsel often provides a broad range of legal services. These include acting as legal advisors, drafting and reviewing contracts, overseeing corporate governance processes and protocols, assisting in large business transactions, managing employment law disclosures, and conducting legal research. Each of these areas carries its own complexities, and skilled outside counsel can navigate these waters, helping your business operate smoothly and in compliance with the law. Here are a few of the most common legal services provided by an outside general counsel:
Legal Advisory Services: A general counsel provides strategic legal advice to a company, offering insights on issues like regulatory compliance, potential legal risks, and strategic business decisions.
Contract Drafting and Review: From employee agreements to vendor contracts, a general counsel drafts and reviews legal documents, ensuring their legal soundness and protecting the company’s interests.
Corporate Governance Processes and Protocols: General counsels guide companies through corporate governance matters, helping create policies and processes that adhere to legal requirements and best practices.
Large Business Transactions: Be it mergers, acquisitions, or major financial transactions, a general counsel aids in navigating the legal complexities of these business-changing events.
Employment Law Disclosures: Complying with employment laws and regulations is crucial. A general counsel ensures that all necessary disclosures are made to employees and regulatory bodies, reducing the risk of lawsuits or fines.
Legal Research: General counsels conduct thorough legal research to inform the company’s decisions and ensure compliance with relevant laws and regulations.
However, to truly distinguish the best outside general counsels, one needs to look beyond the scope of services offered and consider their skills and experience.
Skills that Distinguish the Best Outside General Counsels
Selecting an outside general counsel is more than just outsourcing legal work. It’s about forging a strategic partnership with seasoned experts who can navigate the intricacies of the legal landscape while being attuned to your business’s unique needs and objectives. The best law firms for outside general counsel stand out, not just due to the breadth of their services but because of their unique skill sets and extensive experience. When selecting an outside general counsel, consider these essential qualifications:
Experience with Corporate Governance: Exceptional outside general counsels possess a deep understanding of corporate governance, especially as it applies to publicly traded or large private companies. Their ability to implement best practices, provide advice on board matters, and ensure shareholder rights are invaluable.
Regulatory Compliance Expertise: The ability to navigate the complex regulatory landscape, including consumer protection laws and environmental regulations, is a hallmark of top-tier outside counsel. Their keen understanding of industry-specific regulations and ability to manage compliance can be pivotal to any company.
Proficiency in Employment Laws: With the ever-evolving landscape of employment laws, firms with expertise in this area can be indispensable. They can help prevent costly litigation, manage employee relations, and ensure that your company remains on the right side of employment laws and regulations.
Real Estate and Construction Experience: For companies in real estate or construction, or those with significant property holdings, a firm with decades of experience in real estate and construction law can be a significant asset. From navigating complex transactions to managing contractual obligations, their hands-on experience can provide much-needed support.
Consumer Protection Law Knowledge: Companies interacting directly with consumers need a firm well-versed in consumer protection laws. They can help manage risk, address consumer concerns, and ensure that your company’s practices align with regulatory requirements.
Remember, the strength of an outside general counsel lies not just in their ability to perform tasks but in their experience, proficiency, and strategic advisory capabilities. These skills help distinguish the best law firms, turning them from mere legal service providers into trusted business allies.
Why Choosing the Right Outside General Counsel is Paramount to Your Company’s Success
Securing the right outside general counsel can shape your company’s future. A skilled outside general counsel brings a wealth of expertise in areas like real estate and construction law, corporate governance, regulatory compliance, employment laws, and consumer protection laws. Knowing when to seek such counsel and what work to outsource can make a significant difference. The right law firm serving as your outside general counsel is a strategic partner, ensuring your company’s operations are legally sound and helping navigate through complex business landscapes. The role of an outside general counsel is not just about legal defense—it’s about strategic growth and risk management. The attorneys at RSN Law have provided industry-leading outside general counsel services to a variety of businesses for decades. Contact RSN Law today at 480-712-0035 or schedule an initial consultation to review your outside general counsel needs on our contact us page.
RSN Law intends this article to be for informational purposes, not to be relied on a specific legal matter, and does not create an attorney-client relationship.