What a business should look for in outside general counsel

A growing number of law firm websites list “general counsel services” among the various practice areas of the firm. This offering usually involves “on demand” legal services for businesses that lack the need or resources to employ full-time attorneys. Outside general counsel can directly and cost-effectively assist a business with contract review, litigation management, regulatory compliance, corporate governance and other legal services, or act as liaison with other specialized counsel. In most cases, these services are offered under an alternative fee structure that makes them more economical than the typical billable hour.

But not all outside general counsel are created equal. While many attorneys are capable advisers and risk managers, a general counsel must be more. So what should a business seeking outside general counsel look for?

Experience

A good general counsel is more than just a lawyer. He or she must balance the roles of trusted legal and business adviser. A good general counsel must also cultivate relationships at all levels of the organization, such that his or her advice is not just followed but sought (and not avoided). These skills are not easily learned in private practice or even by those who have held low level in-house positions. Prior experience as a general counsel or other senior in-house legal positions is crucial.

Versatility

The “general” in general counsel has meaning. A good general counsel must identify, understand and provide advice on a wide range of legal issues. A specialist attorney likely knows little about the myriad legal issues confronting businesses outside their area of expertise. A good general counsel must have a demonstrated record of experience in a wide range of legal practice areas.

Situational awareness

A good general counsel must know their limits and balance the legal work performed directly for the business versus that which needs to be delegated to more capable specialists. A good general counsel must not only know when the situation calls for more experienced counsel but be able to admit to the limitations of their expertise. When a matter is delegated, the general counsel must then be able to manage specialized counsel and act as an effective liaison with the business.

Flexible and cost-effective

The outside general counsel relationship should be a cost-effective alternative to a full-time employee or the billable hour. An outside general counsel's fee arrangement must be more than just a discounted hourly rate. Look for a flexible arrangement that prioritizes value over hours and aligns the interests of all involved.

The legal complexities of the modern business world do not discriminate. Large companies employ armies of in-house attorneys to navigate this landscape. The legal needs of small and mid-size companies are not diminished by the fact that they cannot afford or do not need an extra full-time employee to provide legal services. With the right attorney, having an outside general counsel relationship can be an invaluable and cost-effective asset for businesses of any size.

• John P. Killacky is an equity partner with Momkus LLP, a full-service law firm in Lisle. Phone (630) 743-2181; Email: jkillacky@momkus.com.