Outside General Counsel Builds Inside Legal Strengths

A new normal emerging amid the pandemic. Companies with legal departments are keeping in place some of the key changes made to handle the challenges they faced.

From employment to compliance and regulatory issues, they staffed up to stare down what had become an increasingly dynamic and complex legal landscape.

Many turned to outside general counsel to fortify their legal ranks. With positive results, they're not turning back.

Given the complexities, what should a company consider when deciding whether to build or maintain in-house counsel, versus hiring outside counsel?

• Keep costs in check. The argument of in-house versus outside general counsel has historically been distilled to paying a salary versus a retainer. An in-house attorney or department requires salary and benefits for the attorneys and administrative support that could be far higher than an outside firm’s ongoing retainer.

• Technology adoption. Even before the pandemic, technology drove the practice of law — and the spending to support it. Legal sector IT spending rose leading to and throughout the pandemic, research firm Gartner reported earlier this year, and the number should triple by 2025. Beyond cost, maintaining hardware and software can tax a company’s IT department. Companies using outside counsel ensure the latest technology is in place — without the hefty price tag or headaches.

• Covid-related insights. Many of the regulatory, compliance and employment changes Covid brought can be new and onerous to in-house law departments. Outside counsel, on the other hand, often brings a deeper understanding of these matters, insights that are continually refreshed and updated.

• Geographic diversity. In a flattening world, legal expertise can cross state lines or even national borders. Regulatory or legal matters from another state or nation may require an attorney or litigator skilled or licensed in those jurisdictions. The offices or of-counsel relationships outside counsel often bring can help strengthen the client’s legal footprint.

• A deeper bench. An in-house attorney’s deep institutional knowledge of the company’s inter-related legal issues is an undeniable benefit. Building a relationship with outside general counsel, however, can bring similar benefits, while also bringing to bear the firm’s scope of services and professionals. This also can lend a “fresh perspective” to a company’s operations or the challenges it faces.

This doesn’t have to be an either/or option. Using both in-house and outside counsel can create a blended model that bolsters the strengths of both.

Given the finances and professional agility required to respond to an increasingly complex legal landscape, the arguments supporting the hiring of outside general counsel have never been more important to a company’s ongoing operations, legal support — and bottom line.

For more than 50 years, Tripp Scott has played a leadership role in issues that impact business.

Matthew Zifrony is a director with Tripp Scott and practices in the areas of entrepreneurial business, commercial real estate, and condominium and HOA.

Learn more at TrippScott.com.

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