When it comes to legal representation, it is not uncommon for companies to use outside general counsel in addition to or instead of in-house general counsel.
A 2023 report by the Association of Corporate Counsel and legal recruitment firm Major, Lindsey & Africa found that companies’ average legal spending was 53% internal and 47% external – roughly the same as in 2022.
Donald O. Chesworth, a partner in the Rochester office of Tully Rinckey PLLC, has been practicing law for nearly six decades. He has always seen outside general counsel being used by companies, but the frequency ebbs and flows.
“It’s going in stages,” Chesworth said. “As the economy slows and companies make less money, they start looking for ways to save money, and one of those ways is to reduce in-house consulting costs and hire understaffed consultants. is an economic measure”.
Chesworth is currently active in the external general counsel space – which can be referred to in several other ways, including fractional, outsourcing, overseas or in-house. The types of businesses Tully Rincki represents range from restaurants and resorts to small shops and charities as outside counsel.
“We represent many smaller companies and partners that can clearly benefit from using the services we provide instead of hiring someone full-time,” he said. t do not have the workflow to justify in-house counsel, or they have in-house counsel but need specialized advice or litigation assistance.
Some of the more common areas assisted by the firm’s outsourced attorneys are corporate formation, commercial transactions, intellectual property, labor and employment, business consulting, financial services, and mergers and acquisitions.
“Most in-house lawyers don’t actually do litigation,” Chesworth said, citing some of the reason the company doesn’t have insurance that typically covers litigation. “In many cases, it’s more efficient to have an outside attorney in that role because that outside attorney has insurance and can see the litigation.”
When looking at an outside general counsel firm, Chesworth says one of the most important things you can do is talk to other companies like yours.
“The best way to make sure you’re getting a good product is to get a recommendation from someone else who’s already used it,” Chesworth says. “Go to someone who already uses these types of services and find out who they would recommend and who they would stay away from.”
He also says that once you’ve chosen a firm, make sure the retainer agreement is clear and there’s agreement on both sides about what the outside counsel’s duties are, the cost, and how billing will be done.
Brian Becker, managing counsel at Ivory Law Group, has seen both sides of the coin when it comes to internal and external general counsel. After graduating with a JD/MBA from Syracuse University in 2015, he worked at an AmLaw 100 law firm, where he focused on mergers and acquisitions, private securities transactions, and general corporate advisory services.
He then held multiple roles as in-house counsel at mature and emerging companies, including as a senior member of the legal department at a Fortune 500 company.
All of these combined experiences led Becker, of Rochester, to found Ivory Law Group in 2021. A fully remote firm requires a client-centric, cost-conscious and technology-rich approach to outsourcing corporate consulting.
“We’re structured more like an in-house legal department and try to integrate closely with our client’s business,” said Becker, noting that the company is transparent and accessible with clients through project management tools like Teamwork. “We put everything we do into Teamwork so that clients can see the progress of what we’re working on live. They have a lot of ideas about where our time is going and where their resources are going.”
Due to the remote nature of the practice, the firm’s overhead costs are lower than traditional brick-and-mortar practices, which clients see reflected in rates. Being remote also allows the firm to tap into a nationwide pool of remote legal talent and focus on legal operations for efficiency.
Customers range from small startups to established companies that have in-house counsel but use Ivory’s services to supplement their in-house teams. For example, a client of a marketing analytics data company has two in-house attorneys, but uses Ivory to help with certain transactions.
“For some clients, we’re their first stop for all things legal, and for other clients, we provide more narrowly tailored services,” Becker said, noting that the response to the firm’s approach has been overwhelmingly positive. “Customers like that there’s a lot of flexibility in our model.”
Chris Rodi is a Rochester-based partner in the business and finance department of Woods Oviatt Gilman LLP. He has a background in mergers and acquisitions, but over the past few years has also taken on overseas general counsel roles for US-based and international companies, which he enjoys.
“I love learning about companies,” Rodi said. “It’s definitely worth doing, but it’s also really fascinating to see the unique and amazing ideas that people have built really successful companies around.”
Rodi notes that outside general counsel has always been part of the nexus between business and law, but a recent shift he’s seen has been the recognition, naming and marketing of services as a service to mid-market firms and clients in particular.
“I think it’s become more recognized and official,” Rodi said.
Rodin’s advice to companies looking to hire outside general counsel is to look for an attorney/firm that understands their business and has experience in their field. Finding a good fit in terms of personality and risk tolerance is also important.
“When you’re in a general counsel position, you really have to understand everything about the business,” Rodi said.
Caurie Putnam is a freelance writer in the Rochester area.