Why Outside General Counsel Gives You an Edge

Companies must be agile and strategic with their legal needs in today’s globalized and fast-paced world. Decisions made around legal staffing and support are crucial to ensuring smooth business operations. One significant decision businesses face is whether to hire an outside general counsel firm or invest in full-time in-house lawyers. This blog post will delve into the unique advantages of engaging outside counsel, focusing on specific skills, variable costs, and the benefits of a 24-hour work clock.

Do I need inside or outside general counsel?

When considering an outsourced general counsel, there are a few practical considerations to remember. Ask yourself what aspects of your business need legal advice and expertise. This will determine which areas you should be looking for outside counsel on. It is also essential to consider whether this general counsel will be an advocate for your company or just provide guidance as needed. Last but not least, ask yourself if an internal hire or external resource would best meet your needs – each has its benefits and drawbacks that should be considered before making a decision.

When outsourced general counsel is a good idea

In today’s ever-changing business environment, it has become increasingly important for many companies to remain competitive and agile. This is especially true for start-ups that need the expertise of an experienced lawyer to help them navigate the complexities of launching a new venture. By outsourcing their general counsel role, startups can save money on legal fees while ensuring their in-house team remains current on all legal matters.

A sound legal strategy is essential for any successful startup, yet hiring an in-house lawyer can be expensive. Outsourcing your general counsel role is a cost-effective way to ensure you get the best legal advice without breaking the bank. An outside general counsel can provide specialized insights into specific areas of the law, such as tax regulations or intellectual property rights. This knowledge can help you make better decisions for your business and save money in the long run.

Outsourced general counsel gives you access to specialized skills

Outside general counsel firms can offer an unmatched level of expertise by supplying the necessary hours from individuals heavily skilled in particular disciplines. Whether intellectual property law, compliance, mergers, formation and governance, finance agreements, equity financing, exit transactions, or other complex legal fields, these firms often have seasoned experts specializing in each area.

On the other hand, when you hire a full-time in-house lawyer, that person may require help outside their core competency. For instance, if they come from an intellectual property background, they may be less efficient in financing transactions. In such cases, the company would have to seek additional legal support, incurring costs and potential delays.

Outsourced general counsel gives you flexibility in costs

One of the significant advantages of hiring an outside counsel firm is the variable costs. Depending on business expansion, disputes, or regulatory compliance, legal needs can fluctuate. Outside counsel offers the flexibility to ramp up or scale down the services as needed, providing a more cost-effective solution.

In contrast, a full-time in-house legal team entails fixed costs, including salaries, benefits, and overhead. This may lead to underutilization during slow periods or inadequate support during peak demands.

Have a 24-hour work clock through global partners with outsourced general counsel

Modern outsourced general counsel firms often employ paralegals and other support staff across the globe. This international presence creates a 24-hour work clock, enabling faster handling of legal matters.

Around-the-clock availability ensures that urgent matters can be addressed promptly without waiting for business hours in a specific time zone. It also allows for collaboration with global partners and vendors, aligning with today’s diverse and interconnected world.

How does outsourced general counsel help finance legal work?

Outside general counsel can help finance legal work by providing strategic advice and guidance throughout the financing process. They are experienced in structuring deals, negotiating terms, and protecting all parties. They can also advise on complying with applicable laws and regulations. Areas outside general counsel can assist with regarding financing legal work include:

SAFEs: When creating SAFEs (Simple Agreement for Future Equity), outside general counsel can assist in understanding and implementing the basic tenets of these instruments. This includes working out the valuation caps, discounts, conversion scenarios, payment terms, and other important details.
Convertible notes: Convertible notes are another type of security used for early-stage investments and require a deep understanding of tax implications and legal compliance requirements. Outside general counsel can explain how these notes work and review the applicable terms.
Stock purchases: When it comes to stock purchases, outside general counsel can explain the legal implications and consequences of such transactions while also ensuring that all parties are protected. Pre-seed, seed, Series A, Series B, Y-Combinator, and NVCA investments also require the same care regarding legal compliance and protection of interests for all involved parties.

By engaging an experienced outside general counsel, your company will benefit from professional guidance throughout the financing process. They will ensure you understand all applicable laws and regulations while protecting all parties involved in any transaction. With their help, you can confidently navigate complex financing arrangements with ease.

How does outsourced general counsel assist with exit support?

The primary role of an outside general counsel in exit support is to provide legal advice and guidance throughout the transaction’s lifecycle. This includes offering comprehensive legal strategies for pre-transaction planning, drafting of relevant agreements, managing negotiations, identifying any potential risks, and helping with post-closing matters.

An experienced outsourced general counsel can also advise on a variety of corporate transactions associated with exits, including mergers and acquisitions (M&A), stock purchase agreements, asset purchase agreements, membership interest purchase agreements, joint venture formation, recapitalizations, and restructurings. The counsel must have expertise in structuring each type of transaction to best meet the company’s objectives while minimizing risk exposure.

In addition to legal advice and guidance, general counsel can provide strategic counseling throughout the transaction. They may be able to suggest certain tactical approaches that can improve a company’s chances of successfully achieving its goals.

Finally, an outside general counsel is responsible for keeping all parties informed about important developments during the process. This includes timely updates on changes in market conditions, relevant regulations, and other events that could affect the outcome of the negotiation. Through regular communication with clients and other stakeholders, they help ensure that everyone involved is working together toward a successful conclusion to the transaction.

By providing comprehensive exit support services tailored to each client’s specific needs, outsourced general counsel can be a valuable asset when it comes to ensuring your M&A or other corporate transaction is completed successfully.

Outside general counsel evaluation considerations

When outsourcing general counsel services, ensuring that the partner you choose has a deep understanding of your industry and sector is crucial. A good lawyer should be able to identify potential legal risks associated with your business operations and advise on strategies to reduce them. For instance, they could guide appropriate contract language to protect your rights or recommend creative solutions to unforeseen challenges. Having an outside legal team also provides access to experienced attorneys specialized in various areas of law who are familiar with the latest developments in their field – something you may not have in-house.

Along with providing practical legal advice, an experienced lawyer can help you identify potential opportunities in the market that you may not have considered. They can provide insight into regulatory and compliance issues to ensure compliance with all applicable laws and regulations and advise on structuring transactions to maximize efficiency.

Conclusion

Hiring an outside general counsel firm provides numerous advantages over investing in full-time in-house lawyers. Some of the most notable advantages include:

Specialized Expertise: Access to professionals specializing in various legal disciplines ensures that specific legal needs are met with the highest competence.
Cost Flexibility: The ability to scale legal support up or down according to needs can lead to significant cost savings.
24-Hour Global Support: With staff across different time zones, outside counsel can provide faster responses and align with international business dynamics.

Formation, compliance, and financing services from JonesSpross

At JonesSpross, we understand the importance of strong outside general counsel for our clients. We invest and focus heavily on the advantages set forth above. Our team has extensive experience working with startups at every growth cycle stage, from formation and governance work to business, intellectual property, finance agreements, equity financing, and exit transactions. We have successfully worked with virtually every type of startup with every type of exit. Our mission is to ensure that our clients have access to the highest quality legal services at competitive rates so they can focus on growing their businesses without worry. We are committed to providing reliable, efficient, and cost-effective legal advice so our clients can make informed decisions that help them achieve their goals.

While the decision between in-house and outside counsel must be made based on a company’s unique requirements and strategic goals, considering these advantages may lead many businesses to opt for the versatility and specialized support that outside counsel firms like JonesSpross offer. Learn if our outside general counsel services can help your business.

Ultimately, what matters most is selecting the option that best aligns with your company’s vision, strategy, and operational needs. JonesSpross stands ready to be your partner in achieving those objectives.

Reach out today to learn more about outsourced general counsel services with JonesSpross.

Learn more about outsourced general counsel services