There is a new revolution in the provision of business law legal services to small—and mid-size businesses: outsourced fractional general counsel services.
This is an idea whose time as come, as both business lawyers and companies break free of the traditional law firm and the traditional general counsel model. The latter worked at some level for companies with huge budgets, but they worked less well or not at all for smaller companies who could not afford to pay the high cost of experienced legal services.
The idea is simply to use the cost savings of remote lawyering – no high overhead costs of fancy, gleaming brick-and-mortar law offices and no need for a full-time in-house lawyer earning a high six-figure salary – to reduce the high legal fees associated with the legal profession until now. As a result, both the businesses and the business lawyers benefit.
Businesses benefit by paying a small fraction of what they would pay with the old options of outside lawyers and in-house counsel, often a very tiny fraction indeed. That’s because the companies only need to harness the amount of legal services they actually need, on the one hand, and their attorneys are not incentivized to over-staff or to work slower than needed due to the need to generate high billable hour fees to pay for their high law firm office overhead or to make partner.
The attorneys benefit by having a smaller number of quality clients – small- to mid-size businesses – to whom they can dedicate themselves and get to know and help to nurture and grow. The attorneys can do so as quasi-in-house legal counsel, because they are not incentivized to increase billable hours, but rather to work efficiently within the reasonable budget of the company. The lawyers also receive some predictability and stability about who their clients are, what their workload will be, and what the clients’ foreseeable needs will be. And at the same time, because the work is performed remotely rather than at the client’s location, the lawyer and the client have more flexibility with scheduling and can perform their work and have their meetings from wherever they like.
All that being said, it’s important to be conscious of the differences within the world of fractional general counsel services. Not all the offerings are the same. For example, there are traditional law firms that simply have latched onto this development for marketing purposes: Rather than offering a fundamentally low-priced, high-quality service, they offer the same services, but just with a fixed monthly retainer. That eliminates only the unpredictable fee aspect (although only to some extent, because they will often claim that the retainer needs to be higher), but it doesn’t solve the other problem of the high overhead of a law firm making the fee-points fail to make sense for smaller businesses.
Another pitfall of which to be aware is that traditional law firms offering outsourced general counsel services often operate a “black box” whereby the lawyers actually doing the work are unknown to the company clients. All they see is the front-office partner who smiles and cracks jokes, while the ones actually doing the work are invisible. That lessens attention to the key details of the business, compared to when the same lawyer on the front-end is the one who is on the back-end. That kind of transparency and service is exactly what good fractional general counsel services provide.