Types Of General Counsel
Navigating the intricate world of business can be tricky, especially for those who choose to become entrepreneurs. In today’s fast and fierce business arena, legal matters can change in the blink of an eye, and to be frank, not everyone has their own team of legal experts on speed dial. This is where we come into the picture.
Fridman Law Firm is your virtual guardian angel in the business domain. We understand that whether you’re just starting out, buying or selling a business, or dreaming of taking your company public, the legal maze can be daunting. Not to fret, however, as our team of proactive attorneys is determined to protect your business from unforeseen and costly pitfalls.
We do not just work for you but partner with you, taking the time to comprehend your organization’s unique challenges. We have years of experience under our belt in everything corporate, so you can expect assistance in steering your business the right way. So, whether it is planning your next big move or handling day-to-day legal matters, Fridman Law Firm is your trusted ally. Call 212-262-9823 now to learn about the types of general counsel services we offer.
What Is General Counsel?
In the corporate world, general counsel refers to a high-ranking executive in an organization responsible for overseeing all legal matters affecting the entity and providing legal advice. A general counsel can help companies achieve particular business or industry objectives by acting as an advisor and enabler. A general counsel is usually at the heart of an organization, creating new ways to connect the varying areas of the business to align with the company’s specific goals.
General counsels (GCs) are qualified lawyers who have passed the state bar exam. Their credentials may include the Multistate Bar Examination (MBE) and other certifications specific to their particular state. Since they are tasked with delivering legally sound guidance tailored to the business context, GCs may also hold specialized certifications related to their corporation’s industry. These may include credentials in legal regulations governing consumer goods, oil and gas, technology, biotech, mining, etc.
What Are the Different Types of General Counsel?
There are typically two types of general counsel — outside general counsel and in-house general counsel. As the name implies, the latter exclusively represents an organization with offices inside or within its premises. Most startups or small to midsize companies may not deem in-house general counsel essential or financially viable, but this all boils down to their needs.
Outside counsel usually represents businesses and have their offices separate from the parties they represent. They act as legal advisors and business partners that provide insights regarding an industry’s best practices as well as assistance with legal matters like employment issues, intellectual property, and contracts. One of the primary benefits of outside counsel is that they provide companies with fresh perspectives on legal affairs.
What Is the Role of a General Counsel?
The role of the general counsel for an entity varies depending on factors such as the size of the company, the industry, and the jurisdiction. However, the most common roles include:
Serves as Chief Legal Officer
We live in an age of global regulatory movements and increased risk. As such, the general counsel can serve as the Chief Legal Officer (CLO) on the board, especially for publicly traded companies. GCs help mitigate legal risks by giving board members and executives information on any substantial legal issues the organization might face.
A company’s general counsel may also be responsible for overseeing all company contracts. They may come up with the process of handling, drafting, and reviewing contracts signed by the company and any certifications or licenses needed in order to operate as per the law. Their role is to ensure that the company can still run in good standing when incorporated.
Managing the Organization’s Life Cycle
While the in-house legal team is tasked with handling aspects like creating and dissolving specific entities as part of their overall compliance duties, it’s ultimately the responsibility of the general counsel to oversee the complete life cycle of these entities. The GC guides every phase of the entity’s life cycle from inception and development through startup, growth, and sustainability to expansion, maturity, and potential exit.
Conducting Due Diligence
A general counsel may also play the role of regularly assessing the organization’s operations. This may involve confirming that all procedures are followed, that all entities are within the right legal standing, and that financial and accounting matters comply with the established federal and state regulations. To effectively do this, the general counsel needs access to a centralized and reliable source of entity management information. This ensures that they always work with the most up-to-date and accurate data.
Legal Structure Risks Assessment
The GC is also tasked with leading the structural review of any projects to ascertain operational efficiency. To achieve this, the GC will usually lean on entity diagramming or organizational charting to visualize the whole structure. This can help them pinpoint any gaps, weak points, or threats in the market in order to spot any compliance issues and analyze the entire complexity of the company as it grows and expands.
During the unfortunate occurrence of a crisis, companies heavily rely on their general counsels for guidance. GCs usually play a pivotal role in creating effective strategies, encompassing tasks such as performing internal inquiries, cooperating with investigations, and managing responses to the media.
Record Retention and Management
Documents are imperative, as they can be used to protect an organization’s liability. Notably, the Sarbanes-Oxley Act requires entities to keep all records regarding the annual audit for 7 years following the audit. General counsels ensure that these records can be retrieved quickly when required and protect documents that could be subject to litigation.
Controlling Legal Spending
Helping an organization control costs is another well-known role of the general counsel. That said, most general counsels consider communication, contemplation, and capitalization — the three Cs. Communication entails clarifying and discussing expenses; contemplation entails analyzing, evaluating, and exploring alternatives; and capitalization involves producing and protecting revenue. Fair and timely compensation for lawyers also falls within this category.
Outside Counsel Management
When general counsel determines it is wise to seek outside counsel on a legal affair, they determine who to hire and the amount of work that needs to be outsourced. They interview different firms and create an engagement letter with their chosen party. This process includes outlining expenses for the case as well as debriefing afterward.
Seasoned general counsels are valuable assets when it comes to creating the systems and processes required to prevent events that can result in lawsuits. GCs provide legal advice and guidance for executives and board members on how to avoid legal pitfalls that may lead to legal and financial consequences.
Intellectual Property (IP)
A general counsel can also oversee a company’s IP strategy, safeguarding patents, copyrights, trademarks, and trade secrets. They typically enforce IP rights by filing complaints with relevant regulatory bodies or sending alleged infringers cease-and-desist letters. GCs are also responsible for negotiating licensing agreements and technology transfers in order to leverage or protect the company’s assets.
Mergers and Acquisitions
When it comes to M&A transactions, these legal experts perform due diligence to assess legal risks and contractual obligations. They draft purchase and merger agreements, negotiate deal terms, and ensure regulatory compliance. A general counsel’s expertise is pivotal when moving around the intricate mergers and acquisition landscapes, reducing risks, and ascertaining successful transactions.
A general counsel can ensure your business complies with the different laws and regulations, advising on human resource policies. GCs handle disputes, such as wrongful termination cases and discrimination claims. They can also draft employment contracts, confidentiality agreements, and non-competes. This is essential to maintaining a fair and legally compliant work environment.
Ethics and Compliance
Another responsibility of general counsel is to establish and enforce ethical standards. They develop and enforce codes of conduct to ascertain ethical behavior and regulatory compliance in different industries. This is important to protect the organization’s reputation and mitigate risk. In addition, general counsels investigate possible violations, implement compliance training programs, and guide the company in making ethical decisions.
Advice on Opportunities for Strategic Growth
This is another major role of a general counsel, particularly when it comes to entity management. As the CLO in charge of a company’s risk profile and legal structure, they must advise the board regarding strategic growth opportunities. They are tasked with using all the available entity data analysis and management tools to predict what may occur and guide executives toward the right legal and compliance options for strategic growth.
Call Fridman Law Firm Today for Experienced General Counsel
Fridman Law Firm offers general counsel services, regardless of the size of your business. No matter the sector, our legal team is ready to guide you through business and legal issues in an effective manner. With years of general counsel experience, our reputable NYC law firm takes pride in being part of your growth and success.
So, if you are a business owner in need of general counsel and don’t have an internal legal department, consider hiring a team that can ensure you get the necessary legal protection and support. Call us at 212-262-9823 or contact Fridman Law Firm to schedule an initial appointment and discuss more about your legal options.