When Does Your Startup Need a Legal Department?

I didn’t keep an exact count, but I knew when I’d arrived at my breaking point. The costs and headaches associated with working with firms, which were both disconnected from one another and from the daily operations of my company, were rising. We needed help with matters such as establishing trademarks and drafting and editing partnership contracts (at least four to five per day). Understandably, our legal matters were just one of many to-dos on an outside counsel’s list, which meant that our priority levels and timelines had to be balanced against their other clients’. It seemed clear that an investment in hiring a lawyer in-house would be the most economical and efficient decision.

But before I created an entirely new department, I wanted to check my thinking. My team and I evaluated our legal expectations and gaps and came up with five specific indicators that made the final decision to hire seem like a no-brainer.

If these problems sound familiar to you, then establishing a legal department may be a valuable next step for your business too.

Your turnaround time on legal matters is too slow. 

We were dealing with a significant number of contracts, and the amount of time it took to work and return markups from outside counsel was becoming excessive. Efficiency is critical when it comes to finalizing legal agreements with business partners, and any delay put valuable relationships at risk. A general counsel could exponentially speed up our turnarounds – moving from a phone tag process that could take a few hours to a one-minute casual conversation – and keep our promise of great support and service to our partners.