Why You Need An Outsourced General Counsel

Most business owners build their team over time. If the business owner is great at sales, they may hire a sales manager, then maybe a chief financial officer (CFO), a plant manager, and human resource (HR) manager—in that order. The last leadership role that is a full-time hire is an inside general counsel (staff attorney). The business owner understands that an inside general counsel will give a legal stability to the company, so they can concentrate on growth, however, the other positions are more pressing and tend to be filled first.

Hiring a full-time general counsel can also be beyond the staffing budget of the company, so the business owner generally tasks the CFO, or other top management, to find different outside attorneys to do different things as needed. One attorney might handle the corporate formalities for the company, making sure that the business is licensed in any state where there are substantial contacts, and ensuring that the company will be able to conduct business there. Another attorney might have expertise in the HR area, as a company always has some issues with its employees. There are also many policy changes that are a result to changes of the law that impact the company’s employees. Another attorney might focus on contract issues. Another might focus on mergers and acquisitions. If the company gets sued—the CFO hires yet another attorney to help.

Each of the attorneys that are assigned work by the company knows the things that they are working on but none of them has the history and background for the entire company. They are hired to handle one thing. The attorneys hired by the company don’t know about the other attorneys. They are not generally brought together as a team, as there is a cost to meeting to coordinate the legal disciplines.

Not only is this an inefficient way to cover legal concerns, but all this coordination and overseeing comes at a cost for the CFO trying to manage all the legal aspects of the company. How many other things could they be doing proactively to advance the financial condition of the company, if they didn’t have to manage each lawyer that was hired? How do they determine what the value is that each lawyer brings to the company? Do they know how to peel back the legal bills to see if there is duplication with various attorneys within one firm? Is this the most important function for them to do? Wouldn’t you rather have them focus on their core job-functions and let a legal professional coordinate and manage all these moving parts?

Rather than hiring various attorneys, or only using an attorney piece meal when needed just to put the “fires out,” an Outsourced General Counsel (OGC) becomes a part of your staff and key leadership team. They can preclude the company from being sued or being tapped by a governmental agency over something that their regulations state that your company should be doing, because they are on top of issues and know what is going on across your company.

A good OGC will learn the history and background of the company. They will become aware of the HR issues before they become major problems. They can bring in and manage specialists where they might be needed. They can prepare template documents so that there are no surprises later. They can participate more fully in the growth of the company and help outline the strategic plans of the company.

Many times, companies feel that they cannot bring in an OGC because of the financial investment that they would make in hiring this service. Business owners might rather put more of their budget into sales where they can see a direct result or into plant improvements to get more of their product out to their customers. The truth is that it does not have to be an all or nothing approach. An OGC works on a monthly fee and can save you money by preventing costly issues from occurring, making sure you benefit from contracts and transactions, and helping you better scale and prepare your company of future growth or sale. You will also know your monthly expenditure with an OGC and will not be paying multiple, hard to determine bills from various law firms.

Until your company can hire a full-time general counsel on staff, consider using an OGC. Investigate services, see who you might work best with, and give it a try. You will be pleasantly surprised how much easier things will run and how much more confident you will be knowing you have someone on board who is collaborating with you on a regular basis to cover your needs. You will also appreciate your top management team being able to focus on their much-needed job functions.

Outsourced General Counsel services are there to help you succeed with your business, keeping legal issues to a minimum. OGC’s are a hidden resource that often go overlooked but can be a savvy business owner’s secret to success.

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Denice Gierach

Gierach Law Firm

Denice Gierach is an attorney, CPA, Northwestern University business master's graduate, and has owned several businesses from real estate to manufacturing. She is the lead attorney at Gierach Law Firm in the Chicago area. With more than 30 years of experience, she has been a respected and sought-after resource for businesses looking to grow, sell, solve problems, and succeed long term. Her insights across business areas gives a fuller lens to business issues and solutions, and helps businesses grow and succeed with less time spent on legal issues and other time-consuming problems.

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