Hiring a General Counsel is not necessarily a sign that a company has become "too big for external lawyers." It is often a sign that legal decisions have become too important, too frequent, or too interconnected to manage reactively.
Hiring a General Counsel is not necessarily a sign that a company has become "too big for external lawyers." It is often a sign that legal decisions have become too important, too frequent, or too interconnected to manage reactively.
For many growing businesses, there is a stage where legal matters stop being occasional.
Contracts are increasing.
Commercial negotiations are becoming more complex.
Regulatory requirements are expanding.
Management is entering new markets.
Investors are asking more questions.
Legal risks are beginning to affect strategic decisions.
At that point, business owners often ask:
"Do we need a General Counsel?"
The answer depends less on headcount and more on the nature and frequency of the company's legal needs.
And importantly, hiring a General Counsel does not necessarily mean hiring a full-time employee.
For many SMEs and growing businesses, an External General Counsel can provide the same strategic legal oversight on a more flexible basis.
What Does a General Counsel Actually Do?
A General Counsel is more than a lawyer who reviews contracts.
The role typically sits close to senior management and provides ongoing oversight across the company's legal affairs.
Depending on the business, a General Counsel may be involved in:
- Commercial contracts
- Corporate matters
- Legal risk management
- Regulatory compliance
- Employment matters
- Corporate governance
- Intellectual property
- Disputes
- Strategic transactions
- M&A
- Investments
- Business restructuring
The key difference is continuity.
A General Counsel understands the business and its objectives and can therefore advise management within that broader context.
The First Question: Do You Actually Need One?
There is no universal revenue or employee threshold at which a company suddenly needs a General Counsel.
A company with 30 employees in a highly regulated or contract-heavy industry may need ongoing legal support before a company with 200 employees in a simpler business model.
Instead, look at the following warning signs.
1. Legal Matters Are Becoming Frequent
If management is constantly dealing with legal questions, the company may have reached a new stage.
For example:
- Several contracts require review every month.
- Customers regularly negotiate their own terms.
- Suppliers are requesting amendments.
- Employment issues are increasing.
- Partnerships are becoming more complex.
- Management regularly needs legal advice.
At this point, relying on lawyers only when a specific issue arises can become inefficient.
Frequent legal activity is one of the clearest indicators that ongoing legal support may be appropriate.
2. Contracts Are Becoming More Valuable and Complex
A growing business often moves from relatively simple agreements to larger commercial contracts.
These may contain:
- Significant financial commitments
- Long-term obligations
- Exclusivity
- Complex liability provisions
- Performance requirements
- Intellectual property
- Termination restrictions
- Indemnities
The higher the value and complexity of your contracts, the more important it becomes to have someone maintaining oversight of the company's overall contractual risk.
3. Legal Risk Is Starting to Affect Business Decisions
This is a major turning point.
Management may begin asking:
"Can we legally do this?"
But the more important question is often:
"What are the legal risks of doing this, and are they commercially acceptable?"
For example:
- Should we sign an exclusive partnership?
- Should we enter this market?
- Should we acquire this company?
- Should we terminate this supplier?
- Should we accept this customer's contract?
- Should we restructure the business?
When legal considerations become part of strategic decision-making, having ongoing legal leadership can become increasingly valuable.
4. You Are Spending Too Much on Ad-Hoc Legal Advice
External law firms are essential for many matters.
However, if the company is repeatedly engaging different lawyers for routine legal questions, costs can become difficult to manage.
You may find yourself paying separately for:
- Contract reviews
- Employment matters
- Corporate advice
- Regulatory questions
- Negotiations
- Legal correspondence
This does not necessarily mean external law firms are too expensive.
It may mean that the business needs a central legal function to coordinate routine matters and determine when specialist counsel is actually required.
5. Your Business Is Expanding Into New Markets
Expansion can create additional legal complexity.
This may include:
- New jurisdictions
- New licences
- New regulatory requirements
- New employees
- New customers
- New suppliers
- New commercial arrangements
Before expansion, management should understand the legal implications—not discover them after entering the market.
A General Counsel can provide a central legal perspective across the expansion process.
6. You Are Raising Investment or Preparing for a Sale
Investment and M&A transactions often expose weaknesses that may have been overlooked during normal operations.
Investors and buyers may review:
- Corporate records
- Material contracts
- Employment arrangements
- Intellectual property
- Disputes
- Regulatory matters
- Licences
- Customer agreements
- Supplier agreements
- Shareholder arrangements
If your company is approaching a major transaction, legal readiness becomes particularly important.
A General Counsel can help ensure that the business is transaction-ready rather than scrambling to organise its legal affairs once due diligence begins.
7. Your Business Is Becoming More Regulated
The more regulated the industry, the more important ongoing legal oversight can become.
Businesses may face requirements relating to:
- Licensing
- Employment
- Data protection
- Intellectual property
- Consumer protection
- Financial regulation
- Industry-specific regulation
An ongoing legal adviser can help management identify changes and integrate legal requirements into business processes.
8. You Have No Central Ownership of Legal Risk
Ask yourself:
Who in the business is ultimately responsible for legal risk?
If the answer is unclear, that is a warning sign.
The CEO may be dealing with contracts.
Finance may be dealing with commercial commitments.
HR may be dealing with employment matters.
Operations may be dealing with suppliers.
External lawyers may be handling individual issues.
But who is looking at the complete legal risk picture?
A General Counsel can provide that central oversight.
9. Your Business Is Entering More Strategic Partnerships
Strategic partnerships often involve more than a simple commercial contract.
They can involve:
- Exclusivity
- Intellectual property
- Revenue sharing
- Confidentiality
- Non-compete provisions
- Customer ownership
- Data
- Termination rights
- Long-term commitments
The commercial opportunity may be significant, but so can the legal consequences.
Having legal input before the deal is structured—not just before the contract is signed—can make a meaningful difference.
10. Management Wants a Legal Adviser Who Understands the Business
Perhaps the strongest indicator is simple:
Management wants someone who understands the business, not just the legal document.
A General Counsel should understand:
- Where the business is going
- What management is trying to achieve
- Which risks the company is willing to accept
- Which risks are unacceptable
- How contracts affect operations
- How legal decisions affect profitability and growth
That makes the role fundamentally different from simply sending a contract to a lawyer for review.
Do You Need a Full-Time General Counsel?
Not necessarily.
This is where businesses should distinguish between needing the General Counsel function and needing a full-time General Counsel employee.
For some companies, a full-time General Counsel makes sense.
For many SMEs, however, the legal workload may not justify another senior full-time executive.
An External General Counsel can provide an alternative.
External General Counsel: The Flexible Alternative
An External General Counsel provides ongoing legal support without requiring the company to establish a full-time in-house legal department.
This can give businesses access to:
- Ongoing legal advice
- Contract review
- Commercial negotiations
- Legal risk management
- Corporate advisory
- Governance support
- Regulatory guidance
- Strategic transaction support
The arrangement can be structured around the company's actual needs and can scale as the business grows.
General Counsel vs External General Counsel
| Full-Time General Counsel | External General Counsel | |
|---|---|---|
| Employment | Full-time employee | External adviser |
| Cost structure | Fixed salary & benefits | Flexible arrangement |
| Availability | Internal | Agreed ongoing access |
| Business familiarity | Very high | Develops through ongoing relationship |
| Scalability | More limited | High |
| Specialist access | Usually external | Can coordinate specialists |
| Suitable for | Businesses with substantial legal volume | SMEs and growing businesses |
The right model depends on the company's size, complexity, industry, transaction volume and legal requirements.
When You May Not Need a General Counsel
A General Counsel may not be necessary if:
- Legal matters are genuinely occasional.
- Contracts are relatively simple.
- The business has limited regulatory exposure.
- There are few significant commercial transactions.
- Management rarely requires legal advice.
- A trusted external lawyer can efficiently handle the company's needs.
The goal should never be to create unnecessary overhead.
The goal is to have the right level of legal support for the level of risk the business is taking.
A Simple Test for Management
Ask yourself these five questions:
1. Are we dealing with legal matters regularly?
2. Are our contracts becoming more complex or valuable?
3. Are legal risks increasingly affecting strategic decisions?
4. Are we spending significant time or money coordinating external lawyers?
5. Would management benefit from having one legal adviser who understands the entire business?
If the answer to several of these questions is yes, it may be time to consider a General Counsel function.
That does not necessarily mean hiring a full-time executive.
An External General Counsel may provide the right level of support for your current stage.
How SHAAS Supports Growing Businesses
SHAAS provides External General Counsel services for businesses that need ongoing legal oversight without establishing a full-time in-house legal department.
We work alongside management across areas including:
- Commercial contracts
- Contract risk management
- Corporate and commercial advisory
- Corporate governance
- Regulatory compliance
- Employment advisory
- Strategic partnerships
- Investment and transaction support
- Legal risk management
- Coordination with specialist legal counsel
Our role is to provide ongoing, commercially focused legal support that aligns with the company's objectives and growth plans.
Rather than waiting for legal problems to appear, we help management identify risks, structure decisions and address legal considerations early.
The Right Time Is Before Legal Risk Becomes a Business Problem
There is no magic number of employees or revenue that determines when a company needs a General Counsel.
The better indicator is complexity.
When contracts, regulations, transactions, partnerships and strategic decisions become increasingly interconnected, legal support needs to evolve with the business.
You may not need a full-time General Counsel today.
But if legal decisions are becoming a regular part of management, it may be time to bring the General Counsel function into your business.