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How To Hire An In-house Legal Counsel For Startup

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Most startups do not hire in-house legal counsel when they begin their operations. Instead, they engage lawyers specializing in different practice areas whenever a need arises. However, as time passes and the business starts to grow, they will require in-house legal services. A general counsel will provide assistance in all legal issues besides advising on important business matters. The resident professional will be valuable in mitigating risks for the enterprise and ensuring that its operations remain within the confines of applicable laws. An in-house adviser will also impress upon the need for following ethical practices and contribute to the development of a healthy corporate culture. In this article, we are discussing when do startups need a full-time advisor and how can they hire one.

Most startups do not hire in-house legal counsel when they begin their operations. Instead, they engage lawyers specializing in different practice areas whenever a need arises. However, as time passes and the business starts to grow, they will require in-house legal services. A general counsel will provide assistance in all legal issues besides advising on important business matters. The resident professional will be valuable in mitigating risks for the enterprise and ensuring that its operations remain within the confines of applicable laws. An in-house adviser will also impress upon the need for following ethical practices and contribute to the development of a healthy corporate culture. In this article, we are discussing when do startups need a full-time advisor and how can they hire one.

When Does A Startup Require In-house Legal Services?

The first question that business owners need to ask themselves is when do they need to engage a general counsel lawyer. Entrepreneurs must start looking for such professionals in the following scenarios:

1.Growing Legal Responsibilities

As the business expands and its operations grow, so do its legal responsibilities. It will come under the ambit of new laws and other regulations. Its tax liabilities might also increase. In such a case, the company will need more help to fulfill all its legal requirements. An advisor will also be necessary for effective financial planning and minimizing its tax burden.Current Legal Micromanagement Framework Becomes Inefficient

2. Current Legal Micromanagement Framework Becomes Inefficient

The increased liabilities might be hurting the current legal micromanagement system and making it inefficient. The workforce will be under extra pressure to manage legal issues while discharging their regular duties. This will have a negative impact on the overall efficiency of the organization. Owners must hire a full-time lawyer to prevent such a situation.

3. Increased Costs Of Hiring Different Lawyers

A clear sign that the corporation needs an in-house professional is the increased costs of hiring different lawyers. Most companies need regularly need assistance in areas like employment law, intellectual property, contracts, and tax. When hiring separate individuals or agencies becomes expensive, enterprises must appoint a permanent counsel.

What Is The Role Of A General Counsel?

A general counsel attorney shoulders the following responsibilities:

  1. Manage Legal Matters

The professional is responsible for managing the company’s legal team and representing it in courts when the need arises. He/she must decide the organization’s stand in all legal issues it is involved in.

2.Draft Contracts And Agreement

General counsels draft all the contracts and other written agreements needed by the enterprise. Companies need these documents to formalize their arrangements with employees, vendors, dealers, clients, and other business associates.

3.Assess Financial Transactions To Identify Risks

Legal advisors study all transactions undertaken by the organization to identify risks. Their assistance is required during critical business deals like mergers, acquisitions, and joint ventures. They conduct proper due diligence to find out whether the deal will be profitable for their company or not.

4.Collaborate With Business Sections To Ensure Compliance

An in-house legal counsel must collaborate with all the business sections to ensure that all applicable regulations are being adhered to by the company. It is the professional’s duty to communicate to all departments the conditions they need to fulfill.

5.Negotiate Terms With Outside Lawyers

Lawyers play a vital role in protecting startups’ interests by negotiating terms of agreements with lawyers of other organizations. Their skills are required to settle deals, contracts, and litigations.

6.Formulating Corporate Policy And Procedures

Attorneys are also important for corporate governance. They will ensure that corporate policies, procedures, and other programs are formulated to include ethical practices.

What Are The Areas In Which The General Counsel Attorney Can Help?

Full-time general counsel services can help startups in the following practice areas:

  1. Litigation

The in-house attorney will help in managing all kinds of litigation a company is involved in. The professional will represent the organization in small cases. In matters which require specialized assistance, he/she will guide the hired professional.

2.Employment Law

Startups can get help from the attorney in framing employee contracts and handbooks. The professionals will help devise an appropriate system for hiring and dismissing workers.

3.Intellectual Property

General counsels are valuable for protecting the intellectual property assets of a company. Most startups are based on an innovative idea or are involved in selling a unique product. They require a lawyer to secure their valuable IP assets.

4.Claims Support

Businesses have to resort to claims actions to recover their rightful dues from clients and other entities. The in-house attorney will know the correct procedure to initiate an action and if need be, escalate it.

What Are The Essential Qualities Of A Good In-house Counsel?

Startups must look for lawyers with the following qualities:

  1. Comprehensive Experience

Business owners must look for attorneys with considerable experience of working with startups. They must also search for professionals who have worked with businesses located in their industry, in the past.

2.Extensive Knowledge Of Applicable Laws

An efficient lawyer will know about all the important laws that can be applied to a startup. In-house professionals must be knowledgeable about employment, IP laws etc.

3.Knowledge of Business Aspects

Good corporate lawyers have an in-depth understanding of all business aspects. They also know about the current economic conditions of the jurisdiction where the business is located.

4. Excellent Communication Skills

Startups must engage a professional who is an excellent communicator. Such a lawyer will be an asset during negotiating deals and settlements.

Conclusion

Engaging an in-house legal counsel for a startup is a big decision. Entrepreneurs must identify their own requirements and match them with the skillsets of different lawyers before selecting a suitable professional.

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