Why an Outsourced GC is the ideal third option for Alagen
Alagen, a 10-year old cybersecurity consulting company, has found itself in scale mode. The small business, based in Phoenix, AZ, has been quickly expanding to new US markets and working with midsize companies all over the world. They offer premium security services, which is an industry that continues to expand every year as cyber threats evolve and mature.
When the company began expanding, Gregg Davis, Alagen’s CEO, noticed their legal costs expanding with it. This was not unexpected, but it was becoming stressful as he and his CFO tried planning for legal costs year over year.
“The idea of a fractional, fixed-fee general counsel was something I had been thinking about for a long time. Small businesses like ours have a real challenge with fluctuating legal invoices and needs. It’s almost impossible to estimate what the meter is going to run and project for that.”
In addition to the unpredictability of costs, Davis also found he needed legal advice and transactional work on a more on-demand basis than what he could get with a traditional law firm. Some months were quiet, while others demanded more assistance. He increasingly needed legal representation on sales negotiations, and had a mountain of documents to be organized and managed. With every new market Alagen added to its’ roster, the more chaotic it became to manage the legal side of the house.
“I debated hiring a full time general counsel just to bring some consistency and manage costs. But I also knew that I didn’t have enough in the way of legal needs to justify a full time GC. I debated if it would be worth it to suck up the cost of a full time GC just to have the benefits that come with it, or keep using the traditional law firm model, which was slightly more affordable but didn’t meet all of our needs.”
Finding a Third Option
Alagen became one of the first companies to sign on with Nimbus Legal, a group of outsourced General Counsel on the Auxana platform, and Davis says it’s been one of the best business decisions he’s made.
“As soon as I learned what Beth was doing with Nimbus Legal and Auxana I knew it was the right option for Alagen. Aside from the obvious economic benefits, I loved the idea of having a fractional GC. It’s exactly what we need for where we are in the business lifecycle. Plus, being able to predict and budget legal costs is a dream come true for our CFO.”
Having an Outsourced General Counsel has been beneficial for all executives and departments at Alagen. Davis and his team realized quickly that the company had a dedicated resource who took the time to get to know the ins and outs of their business. Their Outsourced General Counsel through Nimbus Legal found ways to streamline and help operations across finance and sales. And when legal needs outside of their purview arise, their outsourced GC has a network of specialists to bring in, which she could manage on behalf of Alagen.
“Auxana GCs do so much more than transactional work, and there’s an implied level of trust to their recommendations. It’s not beyond our GC to get on a client call with us and represent Alagen as our in-house counsel. It’s a huge help in negotiations, and it makes Alagen look more on level with some of our larger clients.”
Davis says that even though their Auxana GC spends a good amount of her time on contract review and negotiation, it’s extremely helpful to have her there for general legal advisement, and having her input on financial and operational processes. “Our Auxana GC keeps us current on various HR, tax, and business regulation, which is really important. We’re in a constant state of refreshing documentation based on regulatory changes. To that end, document management is something she manages so it doesn’t get out of control. Not having to worry about that is a HUGE benefit for me.”
When your company is growing quickly, it’s easy to feel like you’re constantly putting out fires and in reactive mode. Davis says having a Auxana GC feels like his company is in more of a proactive vs. reactive state in terms of business risk and assessment.
“Without Auxana, I’d have a serious gap in my business. My GC is a true partner who’s helped us in our growth. We’d lose a LOT of knowledge capital and expertise in how we operate as a company if we lost her.”