Many small and medium-sized businesses find themselves “out in the cold” when it comes to working with a business lawyer. Most of the time, it doesn’t make much sense for a small business to have an attorney on staff full-time. Attorneys are expensive, and most smaller businesses don’t have enough legal work to keep one busy full-time. The unfortunate result of this, however, is that many smaller businesses don’t get legal help when they actually do need it-before making important decisions that could have costly consequences. Usually attorneys that work in private practice with small businesses work on a project basis-the client hires the attorney to draft a contract, or to negotiate a deal, or to form an entity. Once the project is completed, the client doesn’t call the attorney again until another project arises. It is unusual for attorneys to become an integral part of the business decision-making process within the business. As a result, many times businesses are blindsided by legal problems that could have been easily avoided with a little help and counsel from an attorney familiar with their business and industry.

Small Businesses Can Benefit From a General Counsel Too

Many smaller businesses would benefit greatly from forming an “outside general counsel” (OGC) relationship with a skilled, experienced attorney. In much the same way that huge corporations employ dozens of in-house attorneys to oversee and provide input on all facets of the corporation’s operations, an outside general counsel can provide insight and assistance to business owners and managers seeking to avoid legal pitfalls and take advantage of opportunities. As the name suggests, the attorney is not an employee of the business. Instead, he or she is a trusted outside advisor to the leadership team, offering legal counsel on a regular basis. Instead of calling the attorney only when something goes wrong, the business owner, leadership team, and attorney meet regularly to bounce ideas off each other and make sure that the plans for the business don’t raise any legal red flags. Keeping in mind the old adage that “an ounce of prevention is better than a pound of cure,” the OGC’s role is to prevent problems before they occur. And if unforeseeable problems do arise, the outside general counsel is perfectly positioned to be able to address those problems without having to spend expensive billable hours to “get up to speed” on the client’s unique business, key players, and industry issues.

Outside General Counsels Can Bring Specialists as Needed

Another benefit of working with an outside general counsel is that the attorney tends to know other attorneys in other disciplines. Few attorneys are general practitioners anymore-in this age of specialization, clients are rarely well served by an attorney who claims to offer everything to everyone. Instead, a client can save valuable time and resources by seeking qualified referrals from the OGC when a specialized need arises. In this way, the OGC becomes the “go-to ” source for all legal questions.

If the OGC can handle the issue in-house, then he or she will do so. For issues or projects outside the scope of the OGC’s practice, skilled, experienced colleagues can provide solutions with the OGC’s input and guidance. Clients don’t have to spend time and money searching for an attorney that specializes in employment law, or securities law, or the UCC. The OGC can bring allied professionals to the table.

Many business owners shy away from on ongoing relationship with an attorney, concerned that such regular contact will be expensive. However, experience suggests that the opposite is true. Clients who take the time to meet with their OGC regularly tend to find that the business runs more smoothly and efficiently, and that issues rarely get out of hand. In contrast, business owners who wait until the last minute to call an attorney often find that small problems that might have been handled easily at the outset explode into expensive and lengthy litigation-the bane of any small business. As in many areas of business and life, it’s much easier to do the routine maintenance than it is to make costly repairs. A good, experienced outside general counsel can help a business stay on focus, control costs, and avoid problems. (more…)