Fractional general counsel services – or outsourced general counsel services – are a new solution that harnesses the power of remote communication to create a cost-effective, high-quality, efficient solution for providing in-house legal services to small to medium-sized companies.  

The basic idea of outside general counsel services looks like this:

  • A company needs legal counsel to assist it to manage legal risks across a variety of its activities, from managing deals to ordering relations between distributors and agents, to managing IP licensing.
  • The company cannot afford to pay the exorbitant billing rates of traditional law firms, and hiring a full-time expensive general counsel to work in-house would be both overkill and too pricey.
  • The company turns to the fractional general counsel services solution, which provides a part-time dedicated in-house lawyer to effectively act as part-time or fractional general counsel in-house for the company.
  • A fractional general counsel’s services can cost as little as 5% of the cost of outside traditional law firms or full-time general counsel. 
  • And because the lawyer is dedicated to the business, he or she knows the business and its legal needs well.

There are other hidden benefits of the outsourced fractional general counsel model such as:

  • No hourly billing, as hourly billing incentivizes lawyers not to be efficient, to generate high billable hours, and staff matters with a “team” of lawyers who will increase the legal bill.
  • No expensive overhead that increases billing rates because the lawyers have to pay on their backend for fancy law offices that don’t benefit clients in any substantive way.
  • No front-end “rainmaker” partners who give clients a false sense that they are the actual lawyers servicing the business and doing the actual work, even though they are just the smiling face of a faceless group of low-level “service lawyers” who do the actual work.   This means that rain-making partners don’t actually know much about the business, and neither do the service lawyers because there’s always a deliberate distance created between the lawyers doing the actual work and the clients.

There are benefits for the outsourced in-house general counsel lawyers, such as greater job satisfaction and dedication to clients, rather than the grueling and dehumanizing pressures and non-relationships of traditional law firms.  Believe it or not, attorneys are people too (really they are!) and prefer fun and healthy personal relationships with their clients rather than instrumental and grasping fee-driven relationships.  

Services to Watch Out For and Avoid

Beware of traditional law firms that offer a fractional general counsel service, because it could be that the pitfalls discussed will be hidden within that firm’s services.  In fact, a traditional law firm masquerading as a fractional general counsel service can be just as bad as a traditional law firm, with all of the disadvantages and none of the advantages.

Instead, it makes sense to turn to a service that really specializes and is dedicated to the fractional general counsel services model, one that truly offers dedicated general fractional counsel services such as those provided by a dedicated platform.

Article by David Page, Founder, and CEO of Inside Outside Counsel