Using a fractional general counsel provides your company high-quality legal service at a fraction of the cost of outside law firms
Attorneys can be expensive. Even attorneys will acknowledge that fact. Hiring a full-time in-house attorney may not make economic sense until a company’s legal fees exceed the cost—including benefits—of employing an attorney. That can easily exceed $150,000 per year.
Traditional billing models too expensive
For companies in the range of $1-50 million in revenue, as well as for startups, this may not make sense. However, they may still find that the traditional law firm billing model does not help them either. Knowing they will be billed for each phone call and email at an hourly rate, many clients will only call their outside attorneys for emergencies, and not to consult on day-to-day matters. This makes it difficult to manage risk and take preventive actions before an issue gets out of hand (and ends up costing a lot more to fix).
How does a fractional GC model work?
Many companies are familiar with the fractional CFO or fractional CTO. These professionals are independent contractors, available to the client for an agreed-upon number of hours or days per month, and for a fixed monthly fee that is much less than a full-time executive. The fractional general counsel is a newer concept but works in much the same way.
A fractional general counsel can offer the following:
- Be available for routine questions and advice, by phone or email
- Draft, review, and advise on agreements and contracts
- Advise on legal issues involving employees
- Provide board and governance support, including help with board meetings, minutes, and resolutions
- Advise on compliance with regulations that apply to the client’s business
- Manage outside attorneys if the client faces litigation or needs highly-specialized expertise
- Familiarity with different industries and knowledge of what solutions will work best
Fractional GC’s with prior in-house counsel experience offer even more value
This service is particularly valuable if the fractional general counsel has experience as an in-house attorney, because he or she knows how to work with business people, knows the importance of learning the business, and knows to put legal advice in the context of overall company objectives and risk mitigation. A lot of law firms offer so-called “outside” or “virtual” general counsel services, but very few of their attorneys have ever been in-house. In-house experience gives an attorney a valuable perspective on the business setting and how to apply legal issues to help achieve business objectives.
Financial benefits of using fractional GC
Using a fractional general counsel makes financial sense for the following reasons:
- More predictability around ongoing legal costs, allowing the company to budget more accurately
- Less anxiety about calling the attorney to discuss routine matters
- More focus on risk mitigation and prevention, so that legal issues do not get out of hand
- Discounts on related services often come with the agreed-upon arrangement
- You get the services of an experienced business attorney without the cost of a full-time executive-level employee, including salary, bonus, and benefits.
If your costs for outside legal services are hard to predict, or too high, and you are afraid to call your outside attorney for day-to-day legal matters because of the cost, you may want to explore a fractional general counsel arrangement.
If you want to know more, call Spitz Legal Counsel at 720-575-0440, or email Mark Spitz at email@example.com.