Every corporate entity, large or small, has to deal with legal issues. These can be minor everyday hurdles or a major legal consideration that demands a company deploys its best resources, or sometimes its entire legal force. By nature, a legal matter requires immediate attention and should be addressed with utmost confidentiality, precision and swiftness.
Given the potentially sensitive nature of legal issues, every organisation deliberates on what is the best course of action to deal with them. Is it pragmatic to engage an in-house legal counsel or instruct a law firm to handle situations?
Although both options present pros and cons, hiring an in-house legal counsel can offer long term benefits that can protect the company’s legal interest. Their sole remit is the company’s internal business. Since an in-house counsel has one client – the employer, their focus is entirely on the matters of the organisation. This also allows them to develop a deeper understanding of the business which assists them in tackling any issue with the required knowledge and context. In addition to this, there is no conflict of interest as the legal team’s decisions not only look out for the firm but also impact its strategic and business decision making.
They assimilate the company culture thereby offering accurate legal advice
In addition to the practicality of having the legal team sit under the same roof as the business, there are a few intangibles an in-house legal team offers. An in-house counsel who has been in the firm for over a period of time will be aware of the company culture and will also be cognisant of the way the organisation operates. This also helps resolve or altogether avoid any sort of friction that may arise from a difference of opinion while handling crucial matters. Although this might not translate into quantifiable figures on the balance sheet, it certainly helps facilitate an efficient environment conducive for quick decision making, especially at times when business critical processes are affected.
They are fully focused and always at your disposal.
Legal issues are usually accompanied by a ticking clock. An in-house counsel who is always at your disposal and is easily accessible can help the organisation shave off valuable time which can be used on other crucial matters. Needless to say, any legal issue that is actioned upon at the earliest opportunity helps the firm avoid the unnecessary escalation of issues, thereby saving valuable time and money.
They comprehend the wider scenario.
Legal matters do not always sit in isolation and often impact associated functions. An in-house legal counsel is inherently privy to all legal matters of the company which helps them to not just think about the specific issue in isolation but also foresee the impact it will have on all aspects of the company. In addition to this the in-house counsel is also included in the decision making in various departments of the company such as strategy, operations, marketing, finance and human resources. This puts them in a unique position to not only analyse the issue at hand but also foresee any related issues that may arise.
They are cost effective.
The general perception of in-house counsel is that they are a fixed cost that has to be borne by the firm at all times making them expensive. Although, in-house counsels are expensive, over a period of time they almost always prove more cost effective compared with engaging the ad-hoc services of an associate from a law firm. The easy accessibility and the support they offer, irrespective of the magnitude of the issue at hand, makes it a commercially viable proposition.
They are a bridge between business and law firms.
Although organisations have their in-house legal team, they do rely on external law firms for specialised advice on certain critical matters. This may involve a lot of back and forth between the business and the external law firm. Since an in-house legal counsel has the right understanding of the firm’s policies and strategies along with the required legal knowledge they can act as a bridge between the two parties thus facilitating a seamless interaction.
The above mean there are a plethora of tangible and intangible benefits an in-house counsel brings to the table. This can be further validated by the trend we are seeing where lawyers are being appointed as board members and are in a position to impact key decision making of an organisation. This has also evolved the role of an in-house counsel over the passage of time and has set a more defined and lucrative career progression for in-house legal roles.
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