How Do You Know if Your Business is Big Enough to Need In-House Counsel? And What if You Can’t Afford One?

Running a successful business is like walking a tightrope over a shark tank while juggling chain saws.


There are a lot of moving parts and if you lose focus for just an instant, the consequences can be disastrous.

You didn’t go into business to read contracts, deal with demand letters, or constantly check up on compliance issues. You went into business because you have a passion for solving problems and making people happy.

But, the bigger your business gets, the more legal issues you are facing.

How do you know when you need in-house counsel and what happens if you need full time legal help, but can’t afford it?


Common Business Issues That Need the Attention of a Lawyer

The worlds of business and the law continue to intersect more every day. Everything from terminating an employee to getting an agreement with a strategic partner can trigger severe legal consequences without some involvement from a lawyer. Even acquiring another business or selling part of the existing business requires in-depth involvement of an attorney.

Businesses face three broad categories of situations that need the involvement of a lawyer:

  • Contracts
  • Liability
  • Regulatory

Whenever a company enters into a contract it can create unintended consequences. While a business is mostly concerned with getting the deal done, a lawyer can be useful to keep on eye on what might happen in the future under the contract.

Issues with employees or accusations from competitors can create legal liabilities for a company. Lawyers can often help diffuse a situation or prevent actions that could cost the company time and money it doesn’t have.

In Maryland there are hundreds of local, state, and federal agencies that make rules that companies must comply with or face large fines and the interruption of business activity. Often permits or permissions are required which can slow down an important project.

If your company is big enough to consult with outside lawyers more than twice a year, your company is big enough to need in-house counsel.


You Don’t Have to be Big to Get Tangled Up in Regulatory Red Tape

Regulatory red tape is one the most important reasons to have a good in-house counsel. Many companies find that they need to go through a process with a regulatory agency that seems to have no end.

There are a myriad of complicated forms to complete and the staff at the agencies never seem to be able to give a timeframe for when action will be complete.

While an attorney doesn’t have a magic wand that will make the red tape disappear, a lawyer has the tools to make sure applications are done right the first time and that the agency is acting in accordance with the laws. Often lawyers speed up regulatory process by simply communicating with the agency in language the agency understands.

Agencies do not care what size your company is. They only care that you follow their rules and processes. Sometimes the rules may not be written down. If you interface with regulators having in-house counsel is a business essential.


The Power of Having Someone Already Up to Speed on Your Business


When a company doesn’t have in-house counsel they have to spend the time and money to find a lawyer and then get the lawyer up to speed on both the legal issue and the company’s business.

Even if the same firm or outside lawyer is used every time, that lawyer isn’t in regular touch with your business and will have to get updated on events since the last issue.

You also want someone who understands the local issues. Someone who lives and practices in the Baltimore area will better understand the obstacles your business faces than someone from out of state.

In-house counsel already knows what is happening in your business and can get to work faster and be used to prevent problems, not just fixing things after something has gone wrong.

Every attorney has his or her own areas of focus. When your company has in-house counsel and outside legal help is required on an issue outside his or her areas of expertise the in-house counsel can still be a time and money saver by overseeing outside legal work and narrowing what the outside lawyers need to do and bill for.


Arrangements for When You Can’t Afford Full Time In-House Counsel

The biggest obstacle for many businesses in hiring in house counsel is cost. Employees cost money, and in-house counsel can cost a lot of money. Additionally, companies know that they are not just hiring an attorney, but are creating a legal department. The in-house counsel will need a secretary and a paralegal. Hiring three new employees is more than many businesses can handle.

However, there is a way for you to get the benefits of in-house counsel without the expense of creating a legal department. You can outsource the in-house counsel position.

A lawyer with a strong business practice can be paid a monthly retainer to act as part-time in-house counsel. Through regular meetings and communication they can keep the company on track and avoid many legal issues as well as problem solve with confidence when something does arise because they are already knowledgeable about the business.

The lawyer, and not the company, is responsible for the support staff. Legal costs can be kept predictable and affordable.

Just like with a full time in-house counsel, your company’s part time in-house counsel can supervise the hiring of lawyers needed for special issues and manage their costs and fees.

You may not have gone into business wanting to deal with legal issues, but, if you want to stay in business and to grow your company you are going to need skilled in-house counsel who not only understands the law, but also knows your business and industry.

If you have already begun wondering if you need in house counsel, you probably do. The good news is that hiring in-house counsel doesn’t have to be as expensive as you may have thought. You can have both the peace of mind of having a lawyer always in your corner without paying for a full legal department.


Dilip Paliath, Esq.

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