Fractional In-house Attorney

Oct 31, 2017 | business attorney, Corporation, Fractional general counsel, Legal fees, Medium-sized business, Small business, Startups

A fractional general counsel can provide excellent legal services at a fraction of the cost of outside law firms

Attorneys can be expensive.  Even attorneys will acknowledge that fact.  For a business that needs ongoing legal services, hiring a full-time in-house counsel may not make economic sense.  This is especially true for companies with from $1-50 million in revenue, as well as for startups. One smaller company I know of spent nearly $900,000 last year on legal fees, using a large national firm that billed hourly, at rates of $500 or more per hour.

Traditional model of outside counsel too expensive

This model doesn’t make sense for most companies that aren’t large enough to hire a full-time attorney.  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 matters get out of hand (and end up costing a lot more to fix).

Services that a fractional general counsel can offer for less

Many companies are familiar with the fraction CFO or fractional CTO. These professionals are independent contractors, available to the client for an agreed-upon amount of time—a specific number of hours or days per month—for a fixed monthly fee that is much less than a full-time executive.  The fractional general counsel is less common, 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
  • Assist with acquisitions and mergers
  • 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

This type of 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.

Why using a fractional general counsel makes good financial sense

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 an arrangement with a fractional general counsel.  If you want to know more, call Spitz Legal Counsel at 720-575-0440, or email Mark Spitz at mark@spitzlegalcounsel.com.

Submit a Comment