As your business grows, so too do its legal needs. In my experience, these are the 3 signs that indicate it might be time to establish an in-house legal function.
Concerns about compliance
Most businesses, in their early stages, tend not to worry too much about regulatory compliance, they are more heavily focused on product-market fit and then scaling.
As the business matures, executives and founders start to consider the consequences of non-compliance.
If, in the back of your mind, you are thinking about compliance with GDPR, cyber security requirements, any industry-specific regulations, protecting your intellectual property or complying with export controls and sanctions regimes, to name just a few, it might be time to bring in some in-house legal support.
Cost of external law firms
Paying traditional law firms can become a costly business. As your legal work grows and you see mounting costs, it might be time to consider alternatives.
Partners in traditional law firms typically offer deep expertise in specific areas of law whilst advising across multiple industry sectors.
The best in-house lawyers tend to offer deep expertise in their industry sector and have a broader knowledge across all the areas of law that affect their sector.
The benefit of the in-house lawyer, therefore, is typically both a lower cost to the business and a deeper understanding of the risks and the sensitivities of their organisation. See my post discussing the differences between the different types of business lawyers here.
Good in-house lawyers understand your organisation’s business strategy and direction and are able to provide strategic advice aligned with your priorities rather than isolated and defensive black-letter law advice.
Contract proliferation
As businesses grow, typically either the volume or the value of their contracts grows too. In many ways, this is the measure of growth.
As contracting value and volume grow, though, so too does risk.
Well-drafted standard terms of business are a good starting point. It is reassuring, however, to have somebody whose job is to oversee the proper negotiation of each of your contracting relationships, at pace, and to evolve your standard terms of business, both as your business evolves and as the regulatory and compliance landscape changes.
If you feel that your contracting is getting away from you, and you don’t have a good understanding of the inherent risks, it might be time to seek some in-house support.
Where to start?
The prospect of hiring your first full-time general counsel can be daunting. At Clearlake, our core service is a fractional general counsel service.
Our sector-specialist in-house lawyers provide an outsourced legal department available in a size and shape that suits you and available immediately.
At Clearlake, we understand the unique challenges faced by SMEs.
Whether you need assistance with contract management, regulatory compliance, dispute resolution or any other legal matter, our experienced team is here to provide the guidance and expertise that you need.
