The BizFilings blog covering business tips and trends.
Why General Counsel Might Be Necessary for Your Business
Published on Apr 28, 2013
Read 'Why General Counsel Might Be Necessary for Your Business' at 'Time to Start Up,' the small business blog by BizFilings.
It’s becoming an increasingly common practice for small and medium-sized businesses to outsource senior-level job functions.
This trend can be attributed to a number of factors, including the cost of onboarding a full-time employee, the enhanced accountability associated with the work and the need for an executive who is more up to speed with current industry practices because of his or her exposure to multiple clients.
In-house lawyers, or general counsel (GC), have not been immune to this trend – although the decision on when to hire a general counsel is typically pushed further and further into the company’s growth cycle. Still, there does come a point when it’s necessary for a company to make that hire. Some of the factors that may tip the scale include:
The business sells a product or provides a service that could cause great physical, emotional or financial harm. Amusement parks are a great example, since the rides are a big risk factor.
The business is contract-intensive. Take a small hospital, for example, which has contracts with vendors, doctors and even patients to some degree.
Intellectual property is one of the company’s primary assets. Whether the company is filing patents, or chasing those who are trying to steal its ideas, an in-house attorney may be in a better position to execute these tasks. This is why, for example, golf club companies frequently bring in a GC, even if the company is small, to ensure their ideas about the next game-changing idea remains within the company.
When hiring a GC, sometimes it makes sense to hire a generalist who can deal with a wide variety of issues. You might consider finding an attorney that has experience working in-house. This way, you know that he or she is used to working closely with executives and finding tenable business solutions.
Ultimately, the business must be realistic about who they are going to hire, eschewing the idea of finding the perfect candidate. As with hiring regular employees, sometimes it’s better to look for the right fit, intellectually and culturally, as well as someone who can adapt to the environment and grow their experience accordingly.
Landing the right GC can lead to substantial rewards. For one thing, the GC can bring a legal perspective early on in the lifecycle of new products and services, addressing issues before they become problems. Secondarily, the GC’s experience in the legal profession means that in the unlikely event the business needs to hire outside counsel, the GC can select the best possible attorneys, while actively monitoring their deliverables and associated fees.
Whenever the time comes for your business to bring in a GC, be sure to evaluate your business needs carefully, and don’t take the hiring process lightly. Incorporation of a business comes with several responsibilities, so it’s important to proactively stay on top legal matters and GCs can be a tremendous help in doing so.