There is no hiding from the fact that companies, both large and small, need to invest in legal aid to help with the smooth running of their operations. And, with more than 90% of legal and tax professionals saying their work provides them with a significant sense of professional purpose, it would appear their contributions are meaningful and essential.
The list of legal help available to businesses is exhaustive, so it begs the question of whether it’s better to bite the bullet and hire an in-house legal team or to export help to a third party. Both approaches have their good and bad points, so it can be a difficult decision for business leaders to make.
From reviews and housekeeping to informed advice, due diligence and regulatory compliance, corporate lawyers must wear many hats. But which is better, in-house or third-party corporate lawyers and legal aid?
In-house lawyers: Why choose them?
Companies and organisations considering an in-house legal team will need to be aware that it will require a significant outlay to acquire one. However, with that increased investment comes improved efficiencies and wider benefits to the business.
Time savings and efficiency improvements
One of the key targets for companies around the world is to improve efficiency and save time on their processes and admin. While an in-house lawyer might not be able to improve any technical aspects of your business, they can certainly speed up any legal processes and market changes.
From understanding the intricacies of your intellectual property and how best to protect it, to delivering tailored advice to a demanding business, internal lawyers and solicitors.
External lawyers won’t necessarily understand the business-specific requirements of your company, which can cause delays in decisions as they need to be brought up to speed. An internal legal professional will have no such delays and can help to anticipate, resolve and identify laws and regulations before they become an issue.
Deciding to bring an in-house lawyer into your team does represent a significant initial outlay, with significant expenses in the first year including recruitment fees and employment costs. But with the costs of external lawyers regularly costing over £500 per hour, those costs quickly rack up.
An internal legal professional can provide their expertise on corporate, commercial and finance or regulatory matters swiftly and with a tailored focus on growing the business.
While an external lawyer can also do those things, they take longer to become familiar with the specific needs of the business, and at a significant hourly rate, costs can quickly escalate. For growing businesses, perhaps seeking acquisitions, and subsequent reorganisation efforts, outside legal help begins to make less cost sense.
Using your own legal team means you don’t have to give up control of your projects to a law firm that may not be as committed to your success as you are. Your projects will be completed to your company standards without the need for constant back-and-forth guidance, which can be time-consuming with outside assistance. For hands-on guidance, it’s best to trust an in-house team that already has a detailed understanding of the inner workings of your company.
What are the benefits of third-party legal assistance?
All leadership teams must seek legal advice from time to time, whether that is frequent or not. But it’s not always black and white whether you should opt for your own legal assistance or whether a third party is the safer approach. While often more expensive, there are clear reasons why businesses should choose outside legal help rather than in-house options.
Specialist knowledge and experience
While it’s great to have your own legal representative within the company, by nature they must have a more broad understanding of the law. Opting for a third-party lawyer means you can hire specialists in their field, often with many years of experience in their particular niche. Not only do they have the talent but they also have the contacts, network and resources to make a special project as watertight and legally compliant as possible.
It’s important to ask yourself whether you believe your existing team and framework have the capability to complete quality work in the areas required for any project. If you think the answer is a ‘no’ then it’s better to reach out to a specialist to ensure the right boxes are ticked throughout the process.
Gaining outside perspective
An in-house legal representative is a great choice because they are familiar with your processes and needs but that does mean they are at risk of losing some perspective. Particularly during busy times and intense projects, it can be hard for them to see the wood for the trees.
This is where an outside legal representative can come to the fore. They will provide an unbiased opinion and perspective, helping to deliver outside-of-the-box thinking which can help find solutions to problems in a much faster timeline.
Internal or outside legal help – which is better?
Ultimately, there is no one approach that is overall better than the other. Internal legal teams are great for more efficient processes and accountability while third-party lawyers can offer a depth of knowledge your company lacks. With commercial law and intellectual property law ranking highly in the most sought-after law fields, it’s clear that this area of the legal process is an essential one.
To ensure your business remains competitive, it’s important to weigh up the pros and cons in each scenario your business finds itself in, remaining flexible to ensure you choose the right solution for your budget and time constraints.