Save Money By Taking on These 3 Legal Tasks Yourself
Companies can quickly find themselves becoming overly dependent on legal counsel as their business’ needs grow. It’s the reason so many CEOs and CFOs have their attorneys on speed dial. Who wouldn’t want that kind of reassurance from their own trusted advisor?
Truth be told, a multitude of recurring issues may be efficiently managed by utilizing readily-available technology and internal resources. If you’re running to your lawyer with every legal-related business need, you’re probably paying tens of thousands of dollars a year on tasks that could be handled in-house just as well, and for a fraction of the cost. Traditional law firms run their business by utilizing billable hours, so if an attorney can achieve their quota with a few clients who have them on-demand, then of course they will.
This isn’t to say that law firms shouldn’t play a crucial part in your business growth and legal health. However, once a company hits a certain stage in growth, it may make sense to consider a fractional general counsel to help manage legal spend and create internal efficiencies. When you’re faced with a corporate transaction or area requiring specific expertise, such as patent applications, your Outsourced General Counsel will help your company utilize external legal resources and law firms, and manage that legal spend to stay within budget. Here are 3 things you can tackle internally in order to recoup some of that budget previously set aside for your attorney.
Equity management is just a fancy way to describe keeping cap tables up to date, managing stock option vesting, equity issuance and transfers, and running scenarios. The Auxana GCs include equity management in their regular toolbox and can assist with implementing equity management software, or if you are ahead of the game and already using an awesome software tool, your Auxana GC can take equity management using the software off of your overflowing plate. We like Carta to manage your equity and cap table in a really smart, intuitive online platform. From cap tables to option grants to 409A valuations, things that your law firm may do using humans and spreadsheets, is managed by software for a fraction of the price. If you have an outsourced GC, they can make sure the data is kept up to date for you, so it’s current when you need it and out of your hair when you don’t.
Contract Management & Filing
Contract management (think customers, vendors, business development partners, NDAs) is tedious and often unruly. As you grow, so do your contracts, forms, governing documents, and all manner of agreements that need to be kept organized, up to date, and easily accessible. Most companies in scale mode find that their Dropbox folder is nothing short of chaos, and so they turn to their lawyers to be their document manager. This is costly and unnecessary.
Contract and document management tools, like PandaDoc, do this for you. Give your operations lead the keys to a good document management software, and you may literally cut your legal bill by thousands of dollars per year.
Again, traditional law firms definitely serve a purpose and our Auxana GCs have relationships with many corporate law firms. They are comprised of attorneys who practice in specialized areas of law all day long. You may have spent a lot of time with your lawyer during your Series A round, and they did a great job of making sure the capital raise went smoothly without any legal hiccups. They might be smart as a whip and a trusted advisor, but they’re not the person to call every time a prospective new customer redlines your sales contract. Don’t pick up the phone and dial them when you’ve spaced on updating your 409A valuation, or to talk through a sticky situation with a co-founder.
This is where an outsourced GC makes the biggest difference. When you hit scale, you need that legal advisor who can guide you through the day-to-day challenges where legal intersects with business and someone who has the time to learn your business, your product, your culture, because they are not billing by the hour. You know it’s not economical to call your $800/hour securities attorney when a contract negotiation goes south. Yet, you also can’t go that alone due to the risk. The outsourced GC is your third option. It’s the experienced day-to-day counsel you need at a flat monthly rate.