Pros and Cons of In-House Lawyers
Our law firm is often hired by businesses to act as “General Counsel” and about 50% of the time our business clients have in-house lawyers that assist the business during its life-cycle. Defining what an “in-house” attorney does is nearly impossible because almost every such attorney has a unique role specific to that organization and its management team, but the effect of having an in-house lawyer is often the same.
Business lawyers are trained to think about business issues differently than management, owners, accountants and other employees and can therefore be a major asset over time. However, bringing a business attorney into a business to generally help the business grow and prosper is often a big step because there are many pros and cons to having a lawyer around full time. The following is a list of a few such pros and cons to help companies sophisticate themselves about the decision to bring a lawyer onto the payroll:
Contracts, legal analysis, negotiations and other tasks generally performed by a law firm can be started (and often finished) in-house for far less money than if the same was outsourced to a law firm that needed to get up to speed on everything.
Day-to-day interactions with a business lawyer can help to identify and expedite strategic change within a business.
Strategic risk can be more easily analyzed by a team that includes a lawyer that is highly sophisticated about the company.
Litigation strategy is easier to implement if it was designed by an in-house lawyer who knows all of the good and bad facts.
In-house business lawyers can bring credibility to a business and open doors that might otherwise be closed.
Lawyers are expensive and are often among the highest paid employees at a company.
Lawyers are often very critical, risk-averse people that can slow progress if they act more as a fear monger than a strategic analyst.
Business lawyers’ opinions can sometimes conflict with those of management and cause strain in an organization.
In-house lawyers often know all of the secrets a business has and therefore can cause significant problems when exiting an organization.
In-house attorneys can become complacent in their positions rather than always keeping their legal skills sharp like a private practice attorney. This can cause a company to be blindly exposed to risk for long periods of time.
Generally it is best for a company to never wholly rely on the skills of an in-house lawyer because of the specialized nature of the position. Having the business’ attorney work with outside counsel from time to time can hedge the cons described above to some extent and will often keep the in-house attorney on his or her toes. Additionally, if you feel like your in-house or outside legal counsel is not quite meeting your expectations you should always interview other lawyers and law firms to see if there might be a better fit.