Could Your Company Benefit from a General Counsel

Mike Auger

General Counsel

U.S. Energy Services

usenergyservices.com

Topic: Legal

As a company grows, the complexities of its business activities also begin to increase. Contract negotiations, mergers, acquisitions, compliance concerns and regulatory issues become necessary but complicated endeavors in a company's growth. As a result, it has become more common for mid-sized businesses to consider adding an "in-house" legal department or general counsel.

Knowing when to make the strategic decision to hire a general counsel attorney can be difficult.  In making that determination, a company should first begin by evaluating its need for the position and understanding the typical roles and responsibilities a general counsel can provide.

Often times, this evaluation is made on a simple dollars and cents ratio based on the amount of money the company is spending on outside legal services versus the cost to hire an internal professional. Although this should be considered, it is important to carefully weigh the intangible benefits of a general counsel.

For example, consider the amount time and resources the executive team might be spending on issues that are not outsourced to law firms. If an executive is spending a sizable portion of time dealing with legal review or contract negotiations, a company should evaluate whether or not that time could be better invested in other business areas.

Also, opposed to the cost of outsourcing various legal services, an internal general counsel will hold a better understanding the company's business, policies, people, goals and risks. For many companies, a general counsel attorney serves as a trusted advisor and/or member of the leadership team, providing valuable perspective and strategic advice to help advance business goals while mitigating the company's risk.

The legal experience and expertise of a general counsel can be especially vital for companies in heavily regulated industries such as energy, healthcare, finance, biotechnology and transportation. An unforeseen misstep in regulatory compliance can easily become a "company killer" if not handled correctly or properly avoided from the beginning.

In the same regard, in-house general counsel can assist a company in any industry and reduce its future legal costs by spotting potential legal problems before they occur. The role of a general counsel also can include preparation and guidance during corporate restructuring, succession planning, or handling employee and human resources issues.

In order to find success in hiring a general counsel, it is important to determine not only the roles and responsibilities it envisions a general counsel would hold within the organization, but also a clear understanding of what the potential candidate is looking to achieve at the company.

It is my experience that lawyers seeking an internal position as general counsel for mid-to-large sized companies typically want opportunities to be involved and engaged at various levels of the company. If the executive team is looking to hire an internal law position to simply delegate contracts and handle the legalities of the accounts receivable department, it is likely that neither the company nor the hired attorney will be happy with the arrangement.

Internal general counsel can be an invaluable tool in effectively achieving business objectives in an ethical and legally efficient manner. Regardless of the industry or relative size of the company, most businesses can find added success with the addition of a general counsel. The key to that success is taking the time to determine which roles and responsibilities should be assigned to a general counsel that will best serve your company. 

2010-07-07 23:00:00 -0600