Why Use an Outsourced Legal Department? (IV)

By Jonathan Wachs, Offit Kurman

Why should an organization consider using an outsourced legal department? This series takes a look at some of the most compelling reasons to engage a third-party lawyer or team of lawyers to meet your legal needs. Part IV.

Reason #4 to Consider an Outsourced Legal Department: Cost Efficiencies

How much does legal support cost? According to a 2016 industry report, base salary for in-house counsel ranges from $82,250 to $259,750. While no similar survey exists for attorneys at private practices—lawyers’ fees fundamentally vary based on the firm and the nature of services provided—one need only look at business news headlines to get a sense of compensation at the higher end.
In light of the apparent costs, some leaders of small and mid-sized companies forgo qualified legal support entirely. Instead, these executives opt to take care of their businesses’ legal needs through so-called do-it-yourself legal services. Armed with downloadable forms, contract templates, and libraries full of how-to guides and frequently asked questions, non-lawyers may believe themselves ready to handle any legal issue that may arise.
Most of the time, however, it isn’t long before the DIY approach reveals its limitations. By then, the business in question faces expenses of an even greater magnitude. Serious legal matters necessitate attorney involvement. Consider the worst-case scenarios:

  • real estate title defects
  • IRS audits
  • intellectual property theft
  • employment disputes
  • bankruptcy
  • class action lawsuits

Would an online document preparation service give you what it takes to defend your business in court or in front of a federal investigator? Sometimes, you just need an attorney.
Less critical issues, as well as seemingly minor ones, also benefit from a lawyer’s perspective. An attorney can help you draft an equitable and nondiscriminatory workplace policy, tighten a pitch for investment, safeguard your trade secrets, and plan for a transition in leadership. In each of these cases, legal support will allow you to generate greater revenue and save money in the long run.
If you understand the value of a legal partner but cannot afford the upfront costs of an in-house attorney or conventional private practice arrangement, an outsourced legal department may be the solution you seek.
Outsourced legal departments move at the speed of your business, handling legal matters as they emerge and adapting to the various stages your company undergoes as it grows and develops within your industry. When solo practitioners and members in-house counsel would otherwise need to spend time acquainting themselves with new laws and procedures, an outsourced legal department provides you access to seasoned attorneys with relevant experience, thereby reducing your immediate expenses and helping your business achieve results quickly.
Through services like Offit Kurman’s New Paradigm Counsel®, attorneys work alongside clients on-site. That means a lawyer participates in your business meetings, supplements your existing legal departments, and has the chance to learn about your company’s unique strengths and opportunities. With this level of hands-on involvement, your legal partner can act not only as a mediator, representative, and compliance officer, but as an ongoing advisor who imbues your business with legal insight. In other words, you gain the competitive advantage of a defense attorney and strategic consultant at a fraction of the cost of hiring either.
When you outsource your legal department, you can determine the scope and budget of a project before committing to engagement with an attorney. There are no surprise fees or inflated billable hours. If the unexpected arises, your Client Relationship Manager will sit down with you to discuss the fastest and most cost-effective methods to address the issue at hand, keeping in mind your business’s current financial status and overall objectives.
When you no longer need the support of an outsourced legal department, you can part ways, secure in the peace of mind that you will not have to bear the costs of a continuing salary or retainer agreement. At New Paradigm Counsel®, we ensure that we work with clients for only as long as each client deems necessary. Whether your industry is subject to new regulations, your company is onboarding new staff, or you are implementing a new business structure, you get experienced and cost-effective legal services when—and only when—you need them.
Besides their lower total costs, outsourced legal departments outpace the alternatives for some businesses due to the predictability of fees. Your Client Relationship Manager can manage the overall delivery of legal services to fall within a monthly or quarterly budget, and can prepare budget forecasts so that your company can evaluate the relative costs and benefits of each proposed project.
Outsourced legal departments circumvent the costs of administrative overhead. Because of the nature of the arrangement, members of an outsourced legal department can offer their services at discounted rates. Plus, regular written status reports will detail the work that your outsourced legal department has done and the work it plans to do for you.
To meet the needs of today’s dynamic organizations, Offit Kurman has developed New Paradigm Counsel®: a service offering through which Offit Kurman develops and delivers outsourced, customized legal departments. For less than the cost of traditional full-time senior legal employee, New Paradigm Counsel® provides clients with access to Offit Kurman’s comprehensive suite of legal services.

To read past articles in this series click one of the following:

Jonathan Wachs

Jonathan Wachs

Offit Kurman, Baltimore, United States
T: +1 301 575 0302
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Jonathan Wachs provides strategic counseling and operational advice to clients in the areas of intellectual property, commercial transactions and outsourced legal departments. As head of the firm’s Intellectual Property Group, Mr. Wachs works closely with clients to develop, register, analyze, enforce, and transfer intellectual property assets in a customized, cost-efficient, and highly effective manner. Additionally, he conducts intellectual property audits through which clients learn the nature and value of their intellectual property assets and the steps needed to protect such assets from misappropriation or dilution. As a business lawyer, he has successfully negotiated and completed several multimillion dollar business transactions and has served as general counsel to several small and midsize businesses and organizations in various industries and professions. He also manages a blog about intellectual property issues, Friday Factoids. Mr. Wachs co-manages New Paradigm Counsel, a service through which Offit Kurman delivers customized, comprehensive and cost-effective outsourced legal departments. Through New Paradigm Counsel, Jon served as outsourced general counsel for a government contractor, a large printing business, a payment processing company and an identity theft restoration business.

Published: June 2016 l Photo: Colourbox.de - Kzenon

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