Establishing the Business Case to Hire a Second In-house Lawyer.
As organisations grow and evolve, a sole legal counsel will want to recruit a second in-house lawyer, and plant the seeds for an in-house legal team.
Many companies find themselves in a common predicament: they’ve hired their first in-house legal counsel, typically a senior lawyer with significant experience, only to discover that this single addition to the management team is becoming overwhelmed. The sole legal counsel simply becomes a victim of their own success, rather than a perceived lack of ability.
The importance of strategic growth in legal departments cannot be overstated. As businesses face increasingly complex regulatory environments and fast-paced market conditions, the role of in-house legal teams has transformed from mere cost centres to strategic partners in business growth and risk management. However, achieving this strategic position often requires more than just a single, albeit highly qualified, legal professional.
This article aims to provide a roadmap for sole legal advisers working as a company’s General Counsel or Head of Legal and finding themselves in this position, offering up some practical advice on how to convince the business of the need to expand the legal team further. It only takes one suitably screened individual with the right behaviours and experience to start to unlock true cost-effectiveness.
The Sole Legal Counsel’s Dilemma
The challenges faced by a sole legal counsel are multifaceted and sometimes overwhelming. These professionals find themselves constantly balancing tactical, day-to-day legal work with the need to provide strategic guidance to the business. This balancing act frequently results in the lawyer becoming a bottleneck for important business processes, as all legal matters – regardless of their complexity or strategic importance – must pass through a single point of contact.
Moreover, the sole legal counsel often struggles with managing the costs associated with external counsel. While outsourcing can provide specialised expertise and additional capacity, it comes at a significant financial cost to the business. The sole in-house lawyer must carefully weigh when to handle matters internally versus when to seek external support, all while managing their already overburdened workload.
This situation is not sustainable in the long term. It leads to increased stress for the lawyer, potential delays in business operations, and missed opportunities for the legal department to add strategic value to the organisation. Recognising these challenges is the first step towards building a case for expanding the in-house legal team.
Benefits of Expanding the Legal Team
Expanding the in-house legal team beyond a single general counsel can bring numerous benefits to an organisation. These advantages extend far beyond simply reducing the workload of the existing lawyer and can significantly impact the business’s overall efficiency and risk profile.
Improved Response Times
One of the most immediate benefits of adding another lawyer to the team is the reduction in response times for legal matters. With two or more legal professionals available, the team can more efficiently triage and address legal issues as they arise. This increased capacity helps prevent the legal department from becoming a bottleneck in business processes, allowing for smoother operations across the organisation.
Enhanced Ability to Focus on Strategic Initiatives
When a sole in-house lawyer is constantly putting out fires and dealing with routine legal matters, there’s little time left for strategic thinking and planning. By bringing in additional support, particularly for handling routine legal work, the senior lawyer can dedicate more time to high-value strategic initiatives. This shift in focus can lead to improved risk management strategies, more proactive legal guidance, and better alignment between legal and business objectives.
Cost Savings Compared to Relying on External Counsel
This might seem counterintuitive to your CEO and CFO if they have never hired in-house legal counsel before, but expanding a company’s in-house legal team usually leads to significant cost savings for the organisation. Make colleagues aware that by hiring in-house lawyers the company is joining a global trend.
According to a 2023 survey by the Association of Corporate Counsel and Everlaw, 66% of legal departments were bringing more work in-house as their top cost-containment strategy. This figure had risen from 59% the previous year. A Thomson Reuters survey in the same year noted that more UK in-house legal teams planned to cut legal spend than their global peers in the US and Europe. Other studies regularly show that the vast majority of Chief Legal Officers and General Counsel believe that adding in-house legal staff is the most effective way to control costs. In-house lawyers, with their deep understanding of the business and a high degree of continuity, can handle many matters far more efficiently than external lawyers.
Better Risk Management and Compliance Oversight
With additional legal resources, the in-house team can take a more proactive approach to risk management and compliance. This includes developing comprehensive compliance programmes, conducting regular risk assessments, and providing timely legal advice to various business units. The result is a more robust risk management framework that can help the organisation avoid costly legal issues down the line.
Making the Business Case
While the benefits of expanding the legal team may be clear to the general counsel, convincing the business to invest in additional legal resources can be challenging. Here’s how to build a compelling business case:
1. Quantify Current Workload and Projected Growth
The first step in making your case is to provide concrete data on your current workload and how it’s projected to grow. This involves:
- Tracking time spent on various tasks: Use time-tracking tools to document how you’re spending your hours. This data can reveal areas where you’re overextended and where additional support could be most beneficial.
- Identifying areas where work is being delayed or outsourced: Highlight instances where legal work has caused delays in business operations or where you’ve had to outsource work due to lack of capacity.
- Projecting future legal needs based on company growth plans: Work with other departments to understand the company’s growth trajectory and how this will impact legal needs. For example, if the company is planning to enter new markets or launch new products, this will likely increase the demand for legal support.
2. Analyse Cost-effectiveness
Demonstrate how hiring an additional in-house lawyer can be more cost-effective than relying heavily on external counsel:
- Compare costs of hiring vs. outsourcing to external counsel: Calculate the fully-loaded cost of hiring an in-house lawyer (including salary, benefits, and overhead) and compare this to the annual spend on external legal fees for comparable work. Start with our 2026 London in-house lawyer salaries and corresponding UK regional in-house lawyer salaries guides.Start with our salary guidance for London and the UK Regions respectively. Or arrange a confidential Discovery Call with us for more detailed guidance.
- Highlight potential savings in legal fees: Use data from your time tracking to estimate how much work could be brought in-house with an additional lawyer, and calculate the potential savings in external legal fees.
A 2019 study by the Corporate Legal Operations Consortium (CLOC) showed that companies with more developed legal operations functions, including right-sized staffing, achieved 30-50% savings in overall legal spend. This statistic can be powerful in demonstrating the potential for cost savings over the long term.
3. Demonstrate ROI
To truly convince the business, you need to show how additional legal support can drive business value:
- Identify areas where additional legal support can drive business value: This might include faster contract turnaround times, improved compliance leading to fewer fines or penalties, or more proactive risk management reducing the likelihood of costly litigation.
- Highlight risk mitigation and compliance improvements: Quantify the potential cost of compliance failures or major legal risks, and show how additional legal resources can help mitigate these risks.
4. Address Concerns About “Empire Building”
It’s important to preemptively address any concerns that your request for additional resources might be perceived as “empire building”:
- Emphasise alignment with company growth and strategic goals: Show how expanding the legal team is directly tied to supporting the company’s growth objectives and strategic initiatives.
- Propose a phased approach or trial period: Consider suggesting a contract or part-time position initially, which can help prove the concept with less commitment from the company.
5. Leverage Data and Benchmarks
Use industry data if it adds further support to your case, contextually. For example, you might use the following:
- Legal department headcount to total company staff: According to the Association of Corporate Counsel (ACC) 2023 Survey, the median ratio of lawyers to total employees is 3.3 lawyers per 1,000 employees (0.33%). Use this benchmark to show how your current legal staffing compares to industry standards.
- Legal spend as a percentage of revenue: The latest couple of annual ACC Benchmarking Reports indicate that percentage of legal spend to revenue tends to run at about one half of a percentage point.
- In-house legal costs to external counsel spend: The same reports show that, out of 400+ legal departments across two dozen industries in 32 countries, just over half the legal spend is allocated to in-house counsel (52%) including taxes, overheads and admin costs. However, as you might expect economies of scale come into play and larger companies spend more externally – reflecting a more complex set of legal needs.
Overcoming Resistance
Even with a well-prepared business case, you’re likely to encounter questions or objections from senior management.
Here are the three most common push-backs and how to address them:
“We just hired you – isn’t that enough?”
Explain how additional support amplifies your impact. Show how bringing in junior support for routine matters will free you up to focus on high-value, strategic work that directly impacts the business’s bottom line.
“Is there really enough work?”
Present your detailed workload analysis, highlighting not just the volume of work but also the opportunities being missed due to lack of resources. Emphasise how proactive legal work can prevent issues before they become costly problems.
“Can’t we just use external counsel more?”
They may have lost sight of the fact that one of the key reasons behind hiring legal counsel is to do less of that or adopt a smarter approach to doing so. There’s an optimum time and a place to extract value from external legal relationships. This might be high stakes joint ventures, corporate transactions or commercial dispute resolution. Each of these might come with significantly serious risk, cost, liability or reputational implications to warrant the use of external counsel.
“Hiring a second lawyer is like upgrading from a single-lane A-road to a dual carriageway – traffic flows faster, capacity doubles, and bottlenecks disappear.”
The 2021 EY Law Survey reported that 53% of CEOs “anticipated launching a significant cost reduction effort” in the 12 months that followed and that legal departments had their part to play. As a result, 88% of General Counsel reported they were planning to reduce the overall cost of the legal function over the next three years.
To bring about positive change, you will want to present the business with cost comparisons and demonstrate inefficiencies or frustrations in relying too heavily on external lawyers. Emphasise the benefits of institutional knowledge and proactive risk management that come with in-house counsel. The General Counsel or Heads of Legal are continually being required to do more on a lower budget, which is arguably impossible with just a sole legal counsel.
Implementation Strategies
Once you’ve made your case and received approval, consider the following strategies for implementation:
Consider Starting with a Contractor, Secondee, or Part-time Position
Beginning with a non-permanent position can help prove the concept with less risk to the company. Each option has its pros and cons:
- Contract position: Offers flexibility but sometimes makes it harder to attract top talent. Contractors are rarely at the same level of seniority (or cost) as the kind of lawyers you would ordinarily choose as a permanent number two.
- Secondee: Provides experienced support but may come with higher costs. If you are undertaking a review of panel law firms, some may be prepared to offer you additional resource if you ask for this to help you demonstrate the value of having another lawyer on board. We have lost count of the number of secondees who have ended up working for the client.
- Part-time position: Can be cost-effective but may limit the pool of candidates for similar reasons to contractors. Once you have a part-time person on board, the work will expand and they will simply feel the same kind of pressure you have been under as a full time lawyer trying to do everything you would like to.
Clearly Define Roles and Responsibilities
When bringing in additional legal support, it’s crucial to clearly delineate roles, responsibilities and job titles. Consider the following division of labour:
- General Counsel / Head of Legal: Focus on strategic initiatives, high-stakes negotiations, and complex legal issues.
- Legal Counsel: Training non-lawyers to handle routine contract reviews, with escalation to the legal team. Introducing precedents and contract frameworks. Assisting with compliance matters, and managing day-to-day legal enquiries from the business.
Set Measurable Goals and KPIs
To justify the return on investment, establish clear goals and key performance indicators (KPIs) for the expanded team. These might include:
- Reduction in external legal spend.
- Improved contract turnaround times.
- Increased proactive legal guidance to business units.
- Reduction in compliance incidents, complaints and disputes.
Conclusion
The decision to start or expand your in-house legal team is a critical step in evolving from a reactive legal function, where headcount issues may have inadvertently caused some bottlenecks, to becoming the proactive strategic legal business partner you know you can be, and which the business wants and needs.
Whilst some might feel a sense of overwhelm in not being able to do it all, this should not be viewed as some kind of attempt at reducing your personal workload. Instead, if you address everything in your business case from the perspective of the business, you are much more likely to be perceived as an enabler seeking to enhance the overall value a legal department will bring to the organisation. A well-staffed legal team can provide faster response times, more strategic guidance, and better risk management – all of which contribute directly to the company’s bottom line.
By quantifying your workload, demonstrating cost-effectiveness, leveraging industry data, and addressing common objections, you can build a compelling case for the strategic growth of a small legal team. A 2018 Thomson Reuters study found that in-house legal functions handle about 75% of all legal work, up from 60% twelve years earlier. So, the trend towards building robust in-house legal teams is clear. By making a strong case for expanding your team, you’re not just solving a short-term capacity issue – you’re positioning your legal department, and by extension your company, for long-term success in an increasingly complex and competitive business environment.
