What is fractional general counsel?

Good in-house lawyers are critical to the health and growth of organisations.

‘Fractional general counsel’ or ‘fractional counsel’ is a highly flexible way of bringing in-house legal expertise and horsepower into your business in a shape that suits your organisation’s specific needs and budget – because every business is different.

In a series of brief posts, I explore how fractional counsel works in practice. Does it overlap with your other resources or is it an alternative?

First of all, it’s helpful to understand the important differences between the traditional schools of business lawyers.

What is the difference between in-house lawyers and private practice lawyers?

Whilst all lawyers provide legal advice, there are a number of significant differences between external (private practice) lawyers and in-house business lawyers.

The differences typically include:

• their areas of expertise and the depth of that expertise

• the breadth of their practices, knowledge and experience

• their alignment with and understanding of their client’s business

• the cost of their services

• their approach to risk

What do private practice lawyers do?

External lawyers, in traditional law firms are, by and large, excellent lawyers, but they are typically highly specialised on a single practice area (such as a specialist type of financing or a particular medium of dispute resolution) in which they build deep expertise over time.

For that reason, traditional law firms are particularly good at delivering large, one-off projects such as a capital raise, a business acquisition or a complex, drawn out court battle.

The price for law firm support is normally very high, but the result should be a large and complex project delivered with high quality, over a short time frame and with low risk.

Clearly there is, and always will be, a place for this service, provided that it is consistently delivered to a high standard.

On the other hand, traditional law firms are not so well positioned to support a business with the legal aspects of their day-to-day business operations.

Their expertise is typically too spread out across different individuals and their pricing model (normally high hourly rates) effectively disqualifies them for regular work for all but the most profitable and risk averse organisations.

So what about in-house lawyers?

In-house lawyers operate very differently.

For starters, by definition, they are normally full time employees of their only client and, as part of an organisation’s internal team, their job is to provide ongoing oversight of their organisation’s risks as well as the legal aspects of their organisation's business activities on a day-to-day basis.

To deliver that service, in-house lawyers must take a far more holistic and proactive approach than private practice lawyers.

They must learn to head off risks before those risks manifest and they must do so across multiple business functions and multiple areas of expertise.

This is a very different function and a very different skill set.

All at the same time, in-house lawyers must be commercial contract negotiators, litigators, company secretaries, corporate lawyers, intellectual property experts, data protection and regulatory experts, risk analysts, board advisors… the list goes on.

Each of these single skillsets is often the work of an entire career for a private practice lawyer in a traditional law firm.

Further, in-house lawyers must come to learn and contribute to their organisation’s risk appetite and preferences, politics and reporting lines.

They must operate as part of their organisation, they must align with their management teams and they must play a central role in their organisation’s mission to drive growth and manage risk.

Where does fractional GC fit?

Clearly the two traditional constituencies of business lawyer have their rightful place in the mix of business legal services.

So where does the fractional GC fit in? Well... find out in the next riveting instalment of this series!

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