In-house lawyer vs legal services through outsourcing?
(or about advantages of subscription legal service for your business)

5 October 2016

As a law firm, we would certainly recommend you legal outsourcing for your company vs in-house lawyer; however, in this article we suggest that you personally assess if our arguments are reasonable.

An employer (Director General, business owner) and HR manager often do not have legal education, and during an interview they can hardly assess candidate’s legal training for an in-house lawyer position.  The employer may judge appearance, poise, well-bread speech, punctuality; he/she may also ask about experience, life priorities and goals in the applicant's life; but he/she will not be able to understand whether potential in-house lawyer possesses special legal knowledge that is being required for the employer’s business activities.  For example, if the company is engaged in wholesale and retail trade, will the employer be going into finding if an applicant is competent about essential terms and conditions of the Supply Agreement, without which terms an agreements is deemed not concluded; or if an applicant is aware of risks which may occur when transaction is recognized null and void; or if an applicant possesses in-depth knowledge in IP law, in particular, the use of trademarks and methods to protect them by administrative, economic and legal ways; or how long ago had an applicant been to a court, and which disputes he/she considered there, etc.

To begin with, when law firm hires lawyers, it primarily assesses in details and weighs candidate's knowledge. In addition, law firm also evaluates if the lawyer has an ability to defend and argue his/ her own opinion. Also an important issue is how the lawyer updates his/her professional knowledge: if he/she reads commentaries in legal publications, or uses primary sources, or gets to know the bills in order to grasp the trends in legislation.

So, let us consider advantages of legal outsourcing.

ADVANTAGES OF LEGAL OUTSOURCING:

  1. Law firm has a website, name, and reputation, which in our time is of greatest value. How is it possible to evaluate reputation of an in-house lawyer and feedbacks about him/her?
  2. Law firm cares for its clients. Having provided them with qualitative service, the law firm gets positive feedbacks, which fact definitely impacts on positive reputation of the firm, thus attracting more new clients (feedbacks of clients is the mostly demanded tab on the website).
  3. In the law firm, lawyers work taking into account their specialization (some handle contractual work; others deal with claims, intellectual property, competition law, customs and tax law, migration law). All the above in complex gives a distinct advantage over the in-house lawyer,  which means that in a law firm client’s issue is considered from different perspectives, and he/she is recommended reasoned decision.
  4. The law firm does not go on vacation, leaving clients’ cases covered with dust; it cannot get sick, does not go on maternity leave, and never quits upon a 2-week notice to the employer, or even to the day upon informing the employer about his/her discharge in cases provided by law. Another lawyer in our law firm will always be able to pick up the client's case and handle it further, because we are one team, and responsibility and quality are key principles in our work. In other words, having employed a law firm, the customer concludes an economic and legal agreement to provide services, in which case the law firm is a service provider with full responsibility and guarantee for the quality of the services rendered. On the other hand, hiring an in-house lawyer, the employer often receives permanent work relationship, and to terminate such relationship the employer has to rack his/her brains and may resort to either reduction in force (which should be carried out in compliance with all the rules, so that the employee will not be able to reinstate by court decision), or tries to prove incompetence of such worker, which according to labor law is not an easy process.
  5. In the company, the legal work is quite diverse, in particular it refers to routine duties of keeping the register of contracts, claims, and audit log; consulting employees with respect to application of law (labor, economic, tax, customs, etc.); drafting of various agreements /contracts (supply, service, lease, loan, financial aid, foreign trade agreements, logistics and freight forwarding services, and many others); verification of counterparties through all available databases and registries; litigation (administrative and economic) in all instances; responding to requests by public authorities or, on the contrary, drawing up requests on behalf of the companies and addressed to governmental authorities; legal support to the company when the latter being inspected by state control bodies; legal research of current legislation, in particular new laws, and regular monitoring of practice in application of law based on analysis of court decisions; etc.  Is it really possible to carry out the above massive of work in a good manner, skillfully, and with reason by one in-house lawyer?
  6. To maintain high professional level of employees, the law firm makes the lawyers attend professional training courses of leading world speakers; participate in advanced courses, round tables, which has already become a must have practice.  In doing so, the law firm invests pretty good money in educating its employees.  Is an employer willing to do the same for his/her in-house lawyer? And if it is so, who will perform the lawyer’s ongoing work while he/she is being absent?

If you made a mistake employing to your staff an incompetent lawyer, who considers that it is  much easier to bribe than to defend interests of your company according to the law; or, such lawyer is unable to independently build a legal work at the company to have such work performed timely, properly and on highly professional level, in such a case you should think about applying a different legal format to support your business, namely to find a law firm working on outsourcing (legal subscription service) basis.

Based on our 10-year experience, we would recommend that you start with going to a law firm with a single question in order to pass the mutual testing of compatibility – Order giver (Client) – Performer (Lawyer), simultaneously assessing accessibility and clarity of legal advice, professionalism and overall breadth that cover the question. When entering into legal subscription service agreement, you should clearly specify what kind of issues the law firm would be responsible for.  You should also determine which issues will be out of the agreement in question that would be subject for further discussion through particular agreements.

WHY US?

If we speak about our law firm - we have an excellent background in servicing trade companies, which are engaged in foreign economic activities, and which conduct retail and wholesale business.  These companies have network of their stores, and also sell the goods through distributors.  We have also served recruiting companies engaged in search, outsourcing and outstaffing activities. Since our lawyers are competent in customs law, some logistics companies have decided to become our clients.  For them, we render brokerage services regarding customs clearance of goods (import, export, temporary import).  Our law firm is also successful in representing clients in courts, and behind us, there are some won cases against fiscal service, administrative case against the border service, successful debt recovery cases, etc.   In addition, we have an in-depth knowledge in immigration law and legalization of foreign citizens in Ukraine (including hired personnel for foreign companies).  However, to be honest in issues concerning criminal matters, in particular, crimes against the person, we are unlikely to be as effective as law firms that specialize precisely in criminal law.

Working with our law firm, we often fix our commitments as for legal services without any restrictions in number of requests (for example, within legal subscription service agreement, we will analyze only 5 agreements and will provide you with 10 verbal consultations). We verbally will set out legal needs of your business, on which bases we will offer you the fee for our work.   Then, we will conclude an agreement and start cooperation.  In such an agreement, we only stipulate exceptions: for instance, very often it concerns migration issues (work permits, residence permits), and legal representation. The first agreement is always made for a period of not more than 3 months, upon an expiry of which we either reduce or increase payment (depends on the amount of time spent and based on calls of your employees which are fixed in the ‘call log’: who applied to us, what was the question, what has been done / recommended, how much time was spent).  Based on such argument, you will make a decision either to continue cooperation or not.

And finally, we wish to add that it is your personal choice how to arrange legal work at your company.  You may either employ an in-house lawyer, or decide on a law firm working on outsourcing basis.  You may also wish to apply combination of an in-house lawyer (for routine legal work) and a law firm (to advise you on issues that require diverse experience).  This is your decision. 

In any case, only your experience, your knowledge and your intuition will help make the right decision.

We truly wish success to your business!

Sincerely
Tetyana Sotnyk
director, lawyer