Hiring a part-time executive is nothing new to scaling businesses with ambitious growth goals and constrained resources. LinkedIn is saturated with requests and offers for fractional CFO and CMO services because founders know that cost-effective and sophisticated financial and marketing expertise is essential to the long-term success of a scaling business.
The same is true for sophisticated legal expertise and advice. However, due to the dominance of the high-cost law firm model, many executive teams are resigned to limiting their reliance on legal experts to major transactions or disputes until they can afford to hire their own in-house legal team.
While some scaling businesses treat their lawyers and external law firms as luxuries for only the most critical matters, many others have discovered the obvious business case for integrating legal counsel and support into their daily operations with a fractional in-house counsel. Like a fractional CFO or CMO, a fractional legal counsel offers sophisticated, embedded expertise in a flexible and cost-effective way.
Flexibly integrating a trusted-legal partner into a business's operations is perfect for start-ups, scale-ups and established mid-market companies looking for a more efficient way to get the legal support they need. It is also a great solution to support strategic projects like a product launch or compliance review mandate, as well as to supplement an existing in-house legal team on a short-term basis.
Here are some of the top reasons why scaling companies are excited by fractional legal counsel engagements:
1. An investment in your team
Valuable business relationships require mutual investment, trust and compromise. Unfortunately, founders’ relationships with external law firms can feel uncompromisingly transactional. You need assistance with a specific legal matter, so your external law firm diligently completes the required task and sends you an itemized bill capturing every minute they spent on your matter.
As an embedded team member, a fractional legal counsel is engaged to create and serve a recurring business relationship, not a one-off transactional mandate. Your fractional legal counsel integrates into your organization, gets to know your team and attends key business meetings to become an expert in your business — producing actionable and nuanced legal advice that supports better business decisions.
A fractional legal counsel also helps improve internal operations and strategy by proactively managing tasks and risks before issues arise. In the most successful cases, a fractional legal counsel replaces the senior law firm partner as the CEO’s primary counsellor, becoming a core member of management and participating in decisions and actions about both law and business.
2. Access top-tier legal experts
On the heels of the pandemic and the Great Resignation, senior legal talent is leaving established law firms and migrating to start-ups for alternative engagements and fractional legal counsel roles. For some lawyers, it is a means to find work-life balance while others are excited to collaborate on hard problems with exciting management teams or see it as an opportunity to work in mission-driven companies.
This is great news for start-ups and scaleups, especially those in regulated industries, where senior legal expertise and guidance are essential to their long-term success.
Ideal fractional legal counsel candidates have strong technical legal training, experience working with successful organizations and years of practice operating in a practical, business-minded way in your industry. With the right combination of technical legal expertise and industry experience, your fractional legal counsel will help your team solve legal challenges efficiently while contributing to the company’s growth and success.
3. Cost efficiency and transparency
It’s easy for executive teams — busy with a myriad of responsibilities — to lose track of external legal engagements and fees. In fact, under the traditional billable hour model, growing businesses can easily rack up hundreds of thousands of dollars in external legal bills.
Due to the high cost of working with external law firms, many scaling businesses limit their legal engagements to major transactions or disputes, missing out on the strategic value of operationalizing their recurring legal needs during a critical phase of growth and development.
With the fractional legal counsel model, start-ups and scale-ups are realizing the benefits of embedding a legal partner to manage their recurring legal operations while drastically reducing the size of their legal bills. Premised on fixed monthly fee arrangements, the fractional legal counsel model means that all your business’ legal questions and operations get addressed without worrying about being “on the clock.”
4. Clarify, prioritize and operationalize your legal roadmap
A typical fractional legal counsel engagement often begins with a comprehensive legal assessment of your organization to evaluate legal risks, identify your legal priorities and build a roadmap for your legal and business operations. Armed with the confidence of organizational clarity, your fractional legal counsel can take ownership of your legal roadmap, so your executive team can concentrate on growing the business.
5. Free up your executive team
CEOs, CFOs and founder teams are spread thin. They manage many responsibilities within their organizations, finding little time to hit everything on their (always-growing) to-do lists.
An effective fractional legal counsel reduces the demand on executives’ time, so they’re able to concentrate on their core management tasks rather than delegating and managing legal work. Imagine how fast your organization could move with your executive team focused on exactly what they do best.
Demand for à la carte legal support from external legal teams isn’t going anywhere. But for many companies, predictable and reasonable fees for an experienced lawyer that understands their business and operations from the inside is the best way to go.