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The Importance of In-house Legal Departments


— February 27, 2019

Entrepreneurs have a lot to manage without tackling legal issues on their own. Should you hire outside counsel or have an in-house legal department?


Running a company is no easy feat. The amount of work involved is tremendous. Things like managing employees, speaking with investors, drawing up deadlines, goals, and finding business partners all lead to long workdays, business weekends, and general stress. On top of all this, there are so many legal regulations and processes that need to be taken into account. And not to mention any possible litigation, both directed at you, and instigated by you. Any mistake when dealing with legal issues can lead to a world of trouble. This is where an in-house legal department comes in handy.

By having professional paralegals and attorneys on call, you will be able to navigate any laws and statutes with ease. You can, of course, always hire a law firm outside of your own company. However, having your own legal department has many more benefits.

Great Source of Advice

Unlike outside counsel, in-house lawyers and legal departments actually understand the nuances of your business, and the relationships your business has. The simple reason here is that they are right there, where the action is taking place. They will be one-hundred percent dedicated to your business, not only because if it fails, they are out of a job, but also because of the relationships and the loyalty that is slowly developed through working at your company.

Two people reviewing a contract; image by Rawpixel, via Unsplash.com.
Two people reviewing a contract; image by Rawpixel, via Unsplash.com.

The second point is the actual knowledge they have about your company. Of course, any lawyer should do his or her best to understand how a certain business is run. But the nuances that you have, the intricacies and issues, the history your business possesses, all of these things are right in front of them constantly. For this reason, they can act as excellent advisors. Furthermore, they will mostly gain experience in the field your business is in. This means that they can actually offer advice that is not completely tied to legal issues. Quite often in-house lawyers serve as advisors to CEOs and managers.

Peace of Mind

Whether you have a legal department in your own company, or have a good law firm, like Northern Beaches Lawyer, on call, it doesn’t matter. What does matter is the fact that you have peace of mind. Issues and problems always spring up, it’s inevitable. But what makes a difference is that you can contact your lawyers immediately the moment an emergency rears its ugly head.

In fact, an issue can spring up at the worst possible time, when you are in the middle of a big deal, or an emergency yourself. The very fact that the problem will be delegated directly and instantly to your legal department can save you a world of hurt, stress, and misery. It will then create room for you to handle other issues yourself. A good legal department can sometimes get a grip on an issue before you even knew you had one.

It Creates Room for Growth

You can think of a legal department as an investment that will generate more money in the long term. The reason here is that you will be able to tackle more opportunities and deals with a great deal more confidence. Furthermore, know that sadly there are many people who want to scam hardworking businesses out there. A lawyer can spot a problematic contract, or a shifty character, the moment he or she sees it. They can save you from a bad deal.

You may simply see an honest business partner who, of course, still wants to protect his or her own interests. A good attorney can draft up a contract that serves both parties equally. And of course, the actual efficiency of navigating contract law will make things go much faster.

They also create room for growth by being quick and efficient. You will definitely need certifications and licenses for your business, no matter which line of work you are in. A good legal department can handle everything in a fraction of a time it would otherwise take. This may be both due to their actual knowledge of the law, but also due to connections and ties they have.

Finally, having your own legal department can be much cheaper in the long run when compared to hiring an outside law firm. If you have a lot of paperwork, bureaucracy, and other legal issues, having a lawyer always near you is a good idea. The other options are wasting time and resources on all that paperwork, or hiring an advisor for a couple of hours every time you can’t handle things yourself.

Good Negotiators

By their very nature, lawyers have high emotional and verbal intelligence. This makes them the perfect negotiators. They can interact and speak with various shareholders, stockbrokers, CEOs, and legal entities easily. This can further lead to them advise you on a deal. For example, you are in a meeting with another company, wanting to close a big project. An attorney will of course be present, but he or she can tell you what they think about the person sitting across from you. They can tell you whether they believe this person is trustworthy, and whether the actual deal can be finalized.

Furthermore, if you truly need outside council on greater and more serious litigation and disputes, then your lawyers can negotiate and find someone who fits. For example, perhaps your legal department doesn’t have much experience with copyright issues, while that is exactly what you need due to someone stealing your intellectual property. Your department can direct you to a firm that has all the necessary skills, and that does not cost an arm and a leg.

A legal department is there to make things run smoothly. They are the most cost-effective option, and the most efficient one as well. Your in-house attorneys can act as both advisors and as negotiators for whatever issue you have at hand, and both directly and indirectly enhance your bottom line.

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