Big companies have their own attorneys on payroll and at the ready. As likable as most attorneys are, businesses would not keep them on the payroll unless they added value. A general counsel acts as a strategic partner. She understands the business, puts it in the best legal position, and protects it from potential liability. When a dispute arises and a business needs immediate legal action, things go much better when an attorney who is already familiar with the business and issues is ready for action.
Many private businesses cannot justify the cost of a full-time general counsel on the payroll. But could your business benefit from a long-term relationship with an outside general counsel? Think of the benefit of having a lawyer who understands your business and how you operate. You can quickly vet issues, including complex employee termination issues, contract issues, client issues, government issues and competitor issues. Your lawyer can keep you up to date on changes in the law so that you make the necessary changes in your handbook. He can train you and your managers on how to avoid legal traps. An outside general counsel is ready to immediately send a letter to competitors, ex-employees or others who pose a threat to your business.
If you think that having an outside general counsel is expensive, try not having one. If you leave your company exposed, one bad lawsuit can kill your bottom line or even put you out of business altogether. Owners can sometimes face personal liability, so not just your business assets are at risk. Businesses often reach out to an attorney after an issue has arisen. While this is certainly better than not hiring an attorney, the business will be scrambling to bring the lawyer up to speed. There won't be time to see if the lawyer is a good fit for the company and how it operates. An attorney who values a long-term relationship will also be more conservative with billing compared to an attorney who sees your business as a one-time billing opportunity.
By contrast, having a lawyer who you know, like and trust at the ready will greatly reduce your stress should a sticky legal situation arise. Smaller issues can be nipped in the bud before they grow into vexing lawsuits. Having an attorney who understands how you like to approach problems could make all the difference. Successful business owners and managers are smart, driven and great decision-makers. The right outside general counsel will be a trusted advisor who will provide perspective along with guidance to allow you to make the best decisions.
By Adam P. Whitney, Esq.