Fractional General Counsel Programs Benefit Startups
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Fractional general counsel programs can offer legal assistance to small businesses and startups.
Legal fees can be expensive. Not many startups or small companies can afford to shell out $165K or more to bring on a full-time general counsel.
Fractional general counsel programs can give a small company an opportunity to have competent legal counsel when required. The monthly-fee structure lets clients integrate legal fees more easily into their budget. And fractional general counsel programs allow these businesses to proactively seek legal counsel when they need it. This helps legal advisors invest the necessary time on tasks they think is in the best interest of their clients.
The Tampa Business Journal says that as a result, this creates a high trust relationship. That’s because legal advisors get to know their clients intimately. In addition, their clients feel they have access to a trusted in-house attorney. It’s just as though the attorney’s office is right down the hall, at a fraction of the cost.
Startups Fear the Billable Hour Structure
Any company can and will face legal questions that could require the assistance of legal counsel. But startups can be reluctant to reach out to call an attorney. This is because of the billable hour structure that’s common at most law firms.
Because of this fear of the billable hour, companies may try to do it themselves. This is a mistake. A company might wait to handle a situation that arises or engage in self-help. However, that situation could become an even greater mess and prove much more costly to resolve.
Fractional general counsel programs can address this concern and hesitancy. These programs understand that startup and small business clients need more than a billable hour option. A client with a singular focus on the billable hour can create an inherent conflict. A sound fractional general counsel program will provide a risk- and value-based approach. The approach can be customized to what each startup and small business client seeks while reducing the legal expenses incurred.
How Does a Fractional General Counsel Program Work?
Attorneys and law firms who serve as fractional general counsels try to understand the overall goals of their client’s business. With this knowledge, fractional general counsels develop a suite of specific services tailored to their client’s legal needs. The key is to prioritize what’s truly important to each client, because it’s not a cookie cutter, one-size-fits-all deal.
The fractional general counsel can help a client better understand his or her businesses. They also can provide effective legal services on an as-needed, on-demand basis.
A primary component of this curating process is pricing for legal fees. Fractional general counsels can provide constant flexibility with respect to a client’s budget. This provides the client with greater control over expenditures. Instead of simply paying a bill each month based on billable hours, fractional general counsels and their clients can forecast a budget for legal needs while prioritizing the most important growth goals. This method allows fractional general counsel clients to have continuous conversations with their legal advisor about the value being delivered. It also enables attorneys to assess what their client’s legal needs are every month.
Who Are Fractional General Counsel Clients?
Just about any company no matter the stage of the growth process—including startups and small business—can benefit from a fractional general counsel program.
The value of this service is like any subscription-based service a company regularly uses.
What Are the Benefits to These Programs?
There are several benefits to this type of program, including:
- Eliminates overhead and employment costs for in-house counsel and corporate law departments
- Provides a flexible cost plan that lets a startup and small business budget for legal services.
- Provides affordable legal counsel from a law firm that knows and understands you and your business.
- Offers discounted legal services for services outside of the basic plan, as well as lower fees for services based on long-term contracts, and
- Timely access to an attorney for time-sensitive matters.
In addition, a fractional general counsel program allows owners and managers to focus on operations instead of legal and compliance issues, which can take up large amounts of time. Plus, a proactive legal counsel can avoid mistakes and problems that increase risk of liability for startups and small businesses. Finally, these companies have an attorney who can manage crises and provide sound legal advice on all business matters in addition to just legal matters.