Senior legal executives are going to startups to take on general counsel jobs, according to a recent Corporate Counsel article. Some are looking for a better work-life balance (oops!), while others are keen to establish and manage their own team or want to work for a mission-driven organization. This is wonderful news for startups, particularly those in regulated sectors, where creating strong in-house legal teams has been difficult and law firm costs may quickly pile up. Top-tier talent is out there for founders to locate, and finding the ideal resource for your small to midsized business has never been easier.
The availability of legal skills presents both obstacles and possibilities. Finding the proper legal leader, whether you are the CEO of a high-growth startup or a midsized technology firm, will have long-term consequences for your organization. It is a move you will want to make right from the start. The main advantage of hiring an in-house attorney is that they will become an expert in all aspects of your company, allowing them to give more effective legal advice as well as (sometimes)-unique feedback on key business matters.
You don’t want a lawyer who will panic and add to the confusion in an already chaotic situation, and you certainly don’t want a lawyer who will give you and the rest of the management team “the facts” and then allow you to make the decision (it’s a “business decision”). Another important factor is that legal firms are risk cautious by nature. This is frequently at conflict with the company’s capacity to achieve its goals. However, CEOs will take chances in order to propel the company ahead, and having a good lawyer on staff who can handle the risks’ possible consequences is vital.
CEOs require a lawyer they can rely on to handle a crisis once it has escalated, as well as one who is careful and transparent in communicating possible dangers up front. Leaders don’t need someone to urge them not to take chances or to say, “I told you so,” when things go wrong; they need someone who can calmly, organizedly, and professionally handle the repercussions (both good and negative) of business decisions. Finally, the cost is a consideration. Law firms often bill on an hourly basis, which may be inconvenient to manage and financially unsustainable for a company seeking to stretch its funds.
While alternative pricing agreements are becoming increasingly popular, most companies limit them to “plain vanilla” representation and charge hourly for more complicated situations. Hiring a full-time lawyer and paying that lawyer a fair wage can help you to better control expenditures while also providing you with superior guidance over time.
The risk appetite of a legal chief candidate is an essential factor to consider. Many in-house lawyers profess” commercial,” but this is not always true. Few in-house executives are ready to make the decision to take on nearly definite risk in order to achieve a corporate goal, there is something about attorneys’ training that makes us go to the worst-case scenario but in reality, there is a lot of room between taking a chance and ending up in a disaster. Great GCs make the business choice, take the risk, and do so with confidence that they can manage the outcome to protect the decision’s economic value while controlling the situation to avoid the worst-case scenario.