Outside general counsel always part of the relationship between business and law

When it comes to legal representation, it’s not uncommon for companies to utilize outside general counsel in addition to or in place of inside general counsel.

A 2023 report from the Association of Corporate Counsel and legal recruiting firm Major, Lindsey & Africa showed the average legal spend by companies is 53% internal and 47% external — about the same as it was in 2022.

Donald O. Chesworth, a partner in the Rochester office of Tully Rinckey PLLC, has been practicing law for nearly six decades. He’s always seen the use of outside general counsel by companies, but the frequency ebbs and flows.

“It kind of goes in phases,” Chesworth said. “As the economy slows down and companies seem to be making less money, then they start looking at ways to save money, and one of those ways is to reduce their in-house counsel expense and go to non-in-house counsel as an economy measure.”

Chesworth currently sees strong activity in the outside general counsel space — which can be referred to in several other ways, including fractional, outsourced, outside, or non-in-house. The types of businesses Tully Rinckey represents as outsourced counsel run the gamut from restaurants and resorts to small stores and charitable organizations.

“We represent a lot of smaller companies and partnerships that can clearly benefit from using the services we provide in lieu of them hiring somebody full time,” said Chesworth, who also noted larger, mature companies also sometimes prefer outsourcing legal work because they don’t have the workflow to justify having in-house counsel or they have in-house counsel, but they need specialized counsel or litigation assistance.

Harter Secrest & Emery LLP frequently provides outside general counsel with a team and relationship-focused approach for large, mid-size, and smaller companies. Sometimes clients do not have in-house legal resources; other times they work collaboratively with an in-house general counsel or broader legal team.

“In either case, our goals are the same – learn the business, and help to solve problems in a practical and efficient way,” said Craig S. Wittlin a corporate attorney and managing partner at Harter Secrest & Emery, who notes that through by truly getting to know their client and their business the firm can add value as a de facto part of the management team.

Wittlin has been practicing law for three decades and has served as outside general counsel to businesses of all sizes. He currently serves as outside general counsel to one of the largest retailers in the Northeast United States.

“For me, serving in an outside general counsel role is the most rewarding work I get to do, because it allows me to bridge the gap between traditional lawyering, and helping clients with business problems that need experience and judgment,” Wittlin said. “The opportunity to be a strategic advisor and function as an extension of the client’s management team is fulfilling and gratifying.”

When looking to hire outside general counsel he recommends looking for a law firm that will invest the time and energy, on their own dime, to know you and your business, and understand how they can help to contribute to your success.

Wittlin believes at the heart of the matter, clients want to partner with lawyers and law firms that are efficient and focused on problem solving – not writing legal treatises, but rather understanding the company’s business objectives, challenges, and opportunities.

Brian Becker, managing counsel at Ivory Law Group, has seen both sides of the coin when it comes to in-house and outside general counsel. After graduating from Syracuse University with a J.D./M.B.A. in 2015 he worked for an AmLaw 100 law firm where he concentrated on mergers and acquisitions, private securities transactions, and general corporate advisory services.

He then held multiple roles as in-house counsel within mature and emerging growth companies, including as a senior member of the legal department within a Fortune 500 company.

All of these combined experiences led Becker, of Rochester, to found Ivory Law Group in 2021. A fully remote firm, it takes a client-centered, cost-conscious, and technology-rich approach to delivering outside corporate counsel.

“We’re built much more like an in-house legal department and try to integrate closely with our client’s business,” said Becker, who notes that the firm is transparent and approachable with clients via project management tools like Teamwork. “We put everything we do in Teamwork so clients can see the progress of what we’re working on live. They have a lot of insight on where our time is going and where their resources are going.”

Due to the remote nature of the practice, the firm’s overhead is lower than a traditional brick-and-mortar practice, which clients see reflected in rates. Being remote also allows the firm to pull from a nationwide remote pool of legal talent and there is an emphasis on legal operations for efficiency.

Clients range from small startups to well-established companies that have in-house counsel but utilize Ivory’s services to supplement their in-house teams. One marketing analytics data company that is a client, for example, has two in-house attorneys, but uses Ivory for assistance with certain transactions.

“For some clients, we are their first stop for anything legal, and for other clients, we provide more narrowly tailored services,” said Becker, who notes response to the firm’s approach has been very positive. “Clients like that there’s a lot of flexibility in our model.”

Chris Rodi is a Rochester-based partner in the business and finance department of Woods Oviatt Gilman LLP. He has a background in mergers and acquisitions, but over the past several years has also taken on outside general counsel roles for U.S.-based and international companies, something he enjoys.

“I love learning about the companies,” Rodi said. “It’s absolutely necessary to do the job, but it’s also really fascinating to see the unique and amazing ideas people have built really successful companies around.”

Rodi notes that outside general counsel has always been a part of the relationship between business and law, but a change he’s seen of late has been the recognition, naming and marketing of it as a service, especially in the middle market of firms and clients.

“I think it’s become more recognized and formal,” Rodi said.

Tips Rodi has for companies looking to hire outside general counsel are to look for an attorney/firm that understands their business and has experience in its space. It’s also important to find a good match in terms of personality and risk tolerance.

“When you’re in a general counsel capacity, you really need to understand everything about the business,” Rodi said.

Caurie Putnam is a Rochester-area freelance writer.