A business regardless of size and sector will come across a broad range of legal requirements, this has been particularly true in 2020 and likely to increase in 2021, with the impact of COVID-19 being felt around the world. At a certain point in a company’s lifecycle either as a Middle East hub or a regional corporation, it becomes effective to appoint an in-house legal counsel.
KEEPING IT IN-HOUSE - A COST / BENEFIT ANALYSIS
An analysis shows the positive extent to which having an in-house counsel leads to efficiencies, cost saving and other associated benefits. Hiring an in-house lawyer will involve a financial outlay by the business, but the right appointment can make a significant reduction and/or realignment of external legal spend.
As a support function within a business the hiring of a senior lawyer with 7 - 10 years + Corporate / Commercial legal experience can be a significant cost to a business, however with broad legal expertise or previous in-house counsel experience there are real tangible benefits.
If a company is using external lawyers the costs, either fixed fee or on hourly rates, means an organisation can be spending huge amounts of money on external lawyers' fees. Managing some of the work in-house means that significant savings can be achieved. For most businesses this can revolve around corporate / commercial work e.g. supply and distribution agreements. For a shipping company, hiring a maritime lawyer can be advantageous, likewise for a private equity fund having a corporate / PE lawyer on hand.
In the current economic climate, there are now more Lawyers available to potentially hire and on the market. This means in-house counsel salaries have remained static and as a results remains an employer lead market.
CONTINUED USE OF EXTERNAL LAWYERS
The majority of businesses are likely to still need to employ external lawyers, for large-scale, complex and specialised legal issues that may arise. However an in-house lawyer can look at reviewing how this has been spent, creating a panel of external providers, and then going forward managing and negotiating the cost of external lawyers.
A legal counsel also serves as an important conduit between the Management / Board and external lawyers, therefore freeing time that can be focused on the core business.
CONFIDENCE – INTERNALLY & EXTERNALLY
Most companies are currently strengthening their legal, risk and compliance functions in response to the influx of critical changes in the region to the regulatory field. It is crucial for businesses to assure shareholders, clients and key stakeholders that investing in the business is a wise and safe decision. Investors will be reassured to see that lawyers are an integral part of the business; increasingly, commercially-aware lawyers can be found sitting on the Board and contributing to thought processes and considerations for key strategic decisions.
Some external lawyers tend to become a backup ‘insurance’ for their clients, since most of the legal work can be done in-house with lawyers who are embedded in the business. In-house lawyers understand the commercial needs of a business trying to be competitive and wanting to stay ahead of fast-changing markets.
EXPERTISE - LEGAL SPECIALISM & SECTOR EXPERIENCE
Many of my clients (Heads of Legal and General Counsels) actually need to educate their external lawyers on their business-specific requirements and their institutional approach to certain transactions. In-house lawyers are able to provide well-tailored and on-point advice to a demanding business. The best are also able to anticipate, identify and resolve legal issues before they become a material problem or threat to the business.
A sole legal counsel of a company will still need to instruct external lawyers to obtain specialist technical advice, such as on tax, litigation and employee issues. The in-house lawyer is a reliable liaison between the company and the law firm.
In some cases, they have worked together in the past and the in-house lawyer can actually identify who may be best to use from their old firm or network, depending on the needs of the business or the deal under consideration. Since the in-house lawyer appreciates the complex legal issues facing the business and the likely work required, he or she will be able to provide more effective instructions to external counsel and translate complex legal jargon into terms that the business team will more readily understand.
If you would like to arrange a confidential discussion regarding the Middle East legal market, hiring options and how we can assist, please reach out to our Head of Legal Recruitment - Mariana Dargendo, Charterhouse Middle East at email@example.com