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Managing Your Company’s Legal Affairs Effectively and Efficiently Through Use of an Outside General Counsel

A company’s legal costs and outcomes tend to improve when its legal activities are planned, monitored and actively managed. An effective and efficient way to manage a company’s legal affairs is through the use of an “Outside General Counsel”; a lawyer working outside the company who is retained to understand and manage a company’s legal affairs, much as an “in-house” General Counsel would do. Whether hired “inside” or retained “outside” the company, a General Counsel manages a company’s legal affairs just as the company’s business managers manage the rest of the company.

The Outside General Counsel gets to know the company and its management in a way that a lawyer with a more casual acquaintance simply cannot. As a result, he can manage the company’s legal business to better achieve the company’s goals. With this insider’s knowledge, an Outside General Counsel is able to match attorneys who have the exact level of expertise and experience to best meet a company’s legal needs, who have personalities that will mesh well with the profile and personality of the company and its managers, and who have a billing rate that is appropriate for each of the company’s legal issues.

An Outside General Counsel can also assist a business with its risk management strategies and help it address the legal issues confronting it before they reach a crisis level. The old saying that “an ounce of prevention is worth a pound of cure” is never more true than when dealing with legal affairs. A short conversation or preventative engagement (looking over a contract before it is signed, or obtaining advice regarding an employment law issue before action is taken, for instance) can often prevent years of costly litigation at relatively minor expense.

An Outside General Counsel can give a company’s management peace of mind, so that the company’s business managers can concentrate on business issues instead of worrying about legal issues. The Outside General Counsel is someone that management can feel comfortable calling upon to help decide if there is ever a need for legal assistance in matters of concern. An Outside General Counsel will report to management with regard to the legal matters being handled by him or her as often and as fully as
management prefers.

In many instances, the Outside General Counsel will not even need to bill his client for the time spent in the management of its legal affairs. When the company has a legal need, the Outside General Counsel is recommending attorneys for paid legal work. As the person who manages the client’s business for his law firm, the Outside General Counsel is usually rewarded within the law firm’s compensation system at a level sufficient to reward him for his legal management efforts without having to bill the client for that time. Therefore, the Outside General Counsel will normally bill the client only for the time when he is actually performing legal work for the client, not when he is simply managing the client’s legal work. Even when dealing with those situations in which the Outside General Counsel must bill for his management time, the advantages that accrue to the client by having its legal affairs actively managed will almost always outweigh the cost. Like other aspects of business, legal costs and results tend to improve when proactively managed. Therefore, even a smaller company can often afford to have the legal management normally provided by a full time in-house lawyer by using an Outside General Counsel.

Hiram Ely, III



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