When You’re Ready to Hire Legal Counsel for Your Business

Gain a better understanding of the differing types of legal counsel.
Posted on
May 19, 2022
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There are many ways to engage legal counsel for your business. We break down the main approaches, with pros and cons for each type of engagement.

As we all know, attorneys try to be precise, which can lead to being wordy and, ironically, confusing to other people. You’ll find legal positions are often referred to by their function and their position relative to the company. Typical functions include general counsel, corporate counsel, litigation counsel, IP counsel, and so forth. References to positions usually include in-house counsel, outside counsel, external counsel, and even “of counsel.”  

The Meaning of “In-House Counsel” and “Outside Counsel”

“In-house counsel” typically refers to a lawyer who is employed directly by a company. They are often full-time employees but could be part-time employees, too. They are paid directly by the company. In-house counsel is also referred to as “inside counsel” or “internal counsel” or similar titles.

In contrast, “outside counsel” is employed by a law firm and works through an “engagement” with a company as a client of the law firm. The company hires and pays the law firm, and the law firm pays the attorney for working with the company. Outside counsel can also be called “external counsel.”

Either in-house counsel or outside counsel can function as the general counsel, corporate counsel, litigation counsel, IP counsel, or other type of counsel for a company.  

From a company’s perspective, the differences between hiring in-house counsel and outside counsel relate to control of their compensation, availability, formal title, state bar registration, malpractice insurance, and conflicts of interest.

The Meaning of General Counsel

General Counsel is a coveted title for many attorneys. When a business hires general counsel, they are looking for an attorney who has a special combination of skills—the ability to understand the business, assess legal risks on multiple topics, and provide actionable advice to the business executives and their teams.

Depending on the size of the business, the general counsel position also might involve managing a small or large legal team. Startups tend to hire their first lawyer and call them general counsel, even if their expertise is limited to a specific area of law. Global corporations hire general counsel to manage massive teams of lawyers with various experts spanning all areas of law.  

Great communication skills are a prerequisite for your general counsel. While there are many attorneys with deep legal expertise, there are few attorneys whose expertise spans legal and business topics to the degree that they can assist the business in assessing and avoiding risks across many departments of the business.

To borrow from other disciplines, a general counsel attorney is similar to a general contractor in the building industry—the general contractor has a broad understanding to manage all the other construction disciplines, takes care of some of the general issues on site, and brings in experts within their network to complete work in other disciplines.  

The Meaning of Corporate Counsel

Corporate counsel typically refers to an attorney who helps with legal issues related directly to the business entity. These can be issues like setting up a business entity, managing corporate governance of the business, assisting with legal documents for debt and equity financing, and in some cases helping draft general agreements for different teams within the company.

Other Types of Legal Counsel

There are many other areas of law in which attorneys specialize. Some of the accompanying titles are subject to specific rules—a “patent attorney” must be registered with the US Patent & Trademark Office. Most titles are just designations of the type of law in which the attorney practices—family law, trademark law, securities law, criminal law, labor and employment law, intellectual property law, business litigation, etc.  

Should I Work with Legal Counsel, an Attorney, a Lawyer, or an Esquire?

In the US, most of the legal community doesn’t care exactly what you call them: legal counsel, attorney, or lawyer. There might be some archaic differences between attorneys and lawyers, but those titles are used interchangeably now. This article uses these terms interchangeably, too.

Historically, lawyers may have been more general practitioners or students of the law, while attorneys were specifically authorized to represent and advocate on behalf of clients in the courtroom. While requirements still exist in most states for joining the “bar” and in court jurisdictions for representing clients, the distinction between these titles has disappeared.  

Some people love to add “Esquire” to their signature, but its origins are a mystery. It’s typically a title used by the attorney to refer to himself. However, unless your “Esquire” shows up adorned in armor, it just sounds fancy. Within the legal community, if esquire means anything, it simply means the same thing as attorney or lawyer.

In Conclusion

There are varying types of legal counsel. How you choose to engage in legal counsel with be dependent upon your specific needs and expectations. We hope that gaining a clearer understanding of the differing types of counsel options will aide you in making the right decision for you and your team. Still wanting to know more? Book a call with our team below.

Jeff Holman
Jeff Holman draws from a broad background that spans law, engineering, and business. He is driven to deploy strategic business initiatives that create enterprise value and establish operational efficiencies.

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