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What are some of the benefits to a company in hiring an in-house lawyer?

Whether to hire an in-house lawyer can be an important milestone in the evolution of a company, but before a lawyer is actually on board it is often hard for directors to envisage how a lawyer will add value and/ or save costs to their business.

Can the company justify the up front expense on its annual budget? Why don’t we continue to instruct external lawyers on a ‘need to’ basis? Is there enough work to justify their salary?
In fact, recruiting an in-house lawyer can provide significant benefits to a business, both immediately obvious and ‘hidden’ benefits.

Management of external legal spend

One of the most obvious and immediate benefits of having an in-house lawyer is to manage the business’s current and future legal costs.

It is misleading to think that hiring an in-house lawyer will always reduce your legal costs. It might - an experienced in-house lawyer with knowledge of your sector will quickly be able to determine the most cost-effective external lawyers to use as well as ‘in-sourcing’ work which you may previously have had to instruct outside counsel on.

It may be, though, that in properly managing your company’s legal affairs, extra spend is needed, at least in the short term. Think of this as a preventative health measure. Some of our recent recruits have had to incur modest costs at the start of their new employment to prevent future calamities including registration of trade marks and other intellectual property rights as well as creating proper employment policies.

Perhaps more obviously, the creation of a panel of legal advisers, managed by your in-house lawyer, can lead to significant savings and an improvement in the quality and efficiency of external legal suppliers. One of the most obvious and immediate benefits of having an in-house lawyer is to manage the business’s current and future legal costs.

It is misleading to think that hiring an in-house lawyer will always reduce your legal costs. It might - an experienced in-house lawyer with knowledge of your sector will quickly be able to determine the most cost-effective external lawyers to use as well as ‘in-sourcing’ work which you may previously have had to instruct outside counsel on.

It may be, though, that in properly managing your company’s legal affairs, extra spend is needed, at least in the short term. Think of this as a preventative health measure. Some of our recent recruits have had to incur modest costs at the start of their new employment to prevent future calamities including registration of trade marks and other intellectual property rights as well as creating proper employment policies.

Perhaps more obviously, the creation of a panel of legal advisers, managed by your in-house lawyer, can lead to significant savings and an improvement in the quality and efficiency of external legal suppliers.

Creation of legal risk management programmes and activities

Corporate governance is always on the increase (read The Bribery Act) and these requirements have placed more demand on the need for risk management and compliance programmes to be developed and adhered to within business.

Again, the value of these programmes is preventative in nature. An in-house lawyer can play a crucial part in implementing these programmes for the future health of the business and be responsible for the training and monitoring of the programmes internally.

Strategic Input

A commercially astute lawyer working closely with the business at the start of any initiative often results in a quicker and more cost-effective implementation of the business plan.
In house lawyers have a better understanding of the business, its products and strategy than external counsel. They will also be able to be more flexible and quicker to respond to the needs of the business resulting in immediate, pragmatic business solutions.

General Commercial Value

Underpinning all the preventative and strategic input of an in-house lawyer is that individual’s commercial input on a day-to-day basis.

An in-house lawyer will assume immediate responsibility for corporate transactional work as well as drafting and negotiating commercial contracts and re-evaluating procurement agreements. Having someone closer to the business in this way will mean this happens more quickly and with an immediately commercial impact. External advisers can then be brought in on specialist matters. During a corporate transaction, an in-house lawyer, managing external corporate lawyers, will effectively free up the directors of the business to concentrate on the business aspects of the deal.

Other key commercial responsibilities include monitoring the company pension, and insurance schemes, undertaking the company secretarial function and handling many property and general contract litigation matters, as well as advising on employment issues.

Lawyers

There are many excellent lawyers looking to make the move in-house for the first time from private practice or alternatively lawyers who are currently already working in industry(potentially relevant sector experience) who will be excited by the opportunity to establish a legal function. The decisions you need to make are what type of lawyer you are looking for and at what level to recruit!