Three Key Reasons To Retain Outside Counsel

January 2019

Outside counsel can provide several value-adds for companies. They can act as in-house counsel if none exists or work alongside in-house counsel and provide outside expertise. Additionally, outside counsel aids in streamlining attorney fees and knowledge. Finally, retaining outside counsel aids in fair and impartial judgement of legal matters related to your business. Below, I elaborate on these points.

Providing Outside Expertise & Working Alongside in-House Counsel

Outside counsel can be a great source of differentiated issue spotters with deep knowledge related to each of those company issues, providing a constant source of collaboration and consistent outside influence.

In house counsel often acts as a risk manager. For example, sometimes front office employees who are executing transactions for the business entity may come to in-house counsel, sometimes transactional attorneys, and ask for help in clearing up a problem after it has already been created.

For example, an employee at a company could have already signed a contract that in-house counsel was not given an opportunity to review or comment on, and that employee may now need assistance preparing the company with respect to litigate provisions within that contract that the counterparty has breached, or the employee anticipates the counterparty to breach.  This is an instance in which outside counsel can work alongside in-house counsel.

In this instance, outside counsel (e.g. litigation attorneys) works alongside in-house counsel (e.g. transactional attorneys) to help solve the issue at hand. Outside counsel can often aid in complex issues such as commercial, regulatory or securities related matters.

Streamlining Attorney Fees & Knowledge

Outside counsel, besides working alongside in-house counsel and providing outside expertise, also allow for firms to streamline attorney fees and knowledge.

If you retain outside general counsel which remain with the business through the various growth stages of your business (years 0 through 20) you are able to call on them all the time. Even if you retain outside counsel several years after your company’s inception, retaining outside counsel means you have attorneys that you can speak to on a frequent basis — keeping your files on hand and becoming yourlaw firm. Outside counsel essentially functions as in-house counsel in this sense, in that they become fully knowledgeable of all of the company’s business. They know the ins and outs of the firm’s various products, revenue streams, legal issues, material contracts, vendors, employee related matters and, if the firm is unlucky to have them, various litigations.

The cost/benefit to outside counsel is that you only pay for what your company uses.  Whereas with in-house counsel you are paying for your attorney regardless of whether you are engaging him or her on a particular matter.  In addition, there are overhead costs to consider for in-house counsel which are not necessary to be concerned about when hiring outside counsel such as healthcare, office space, and office equipment.

Seen as Fair and Impartial

In direct terms, outside counsel has more of a macro view of the company, while in-house counsel may have more of a micro view. In-house counsel is focused more on the business day to day, while outside counsel is more of an impartial, wide-lens view, rather than a day-to-day perspective.

Because outside counsel is not linked to the day-to-day of the business and operates offsite, they have the ability to multitask and do outside legal research while focusing on the needs of the company presented directly to them.

If you’re looking for more information on how outside counsel can add value to you or your company, you can reach out to Holden Legal here.

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