The “fractional” executive is a trendy new term for an age-old concept. When companies aren’t ready for, or in need of a full time executive, but they need that skill set part time, they outsource the position. It’s a type of consultancy model that can work in many executive roles – from marketing to finance. Fractional executives usually get a line on the budget when the company is in scale mode and still small. Leadership in certain roles is necessary, but economically it doesn’t make sense to hire a full time person.
As Nimbus has proven, this model also works in legal. When a company hits about the $5M mark, they start to see their day-to-day legal needs, and bills, climb. This is when hiring an outsourced General Counsel makes sense. An outsourced GC can not only save the company a great deal of money, they can become part of the revenue engine, helping the company get to their next milestone more efficiently and with less risk.
However, outsourcing legal to a fractional GC isn’t like outsourcing to other fractional executives. The key differences are important to know, to help manage expectations before going this route. Indeed, having an outsourced GC can yield huge benefits, but it’s important to not look at this position as you would another fractional executive. Here’s what you need to know.
Doing vs. Overseeing
Many times, the role of a fractional executive is to act as the leader of an existing team. In marketing, for instance, a fractional, outsourced CMO would lead and manage the marketing team. In this respect, they probably wouldn’t dig into the weeds and actually execute marketing tasks like writing, creative, and media buying. Their role is to ensure the marketing function is working.
Similarly, an outsourced sales executive might set up the sales process and systems, hire the sales team, train them, and ensure the sales operation is a revenue-producing machine. But they’re likely not going to pick up the phone and call leads. Again, the tactical execution is left to the team, while the fractional executive is there to ensure performance.
The Ultimate Team Player
An outsourced General Counsel will act both as a business advisor AND execute transactional legal matters. They’ll create contracts, review documents, and stay on top of changes to the laws to ensure their client is avoiding risk. In the event that your company enters into litigation activity, or a securities offering, your outsourced GC will move into a leadership role and manage external legal resources. They’ll hire a law firm with applicable expertise, and manage that firm through the event to ensure maximum efficiency, predictable invoices, and less stress on your plate.
The benefit here is your outsourced GC will ensure intelligent use of resources, so your bill at the end of the day won’t put your business in the red. Concurrently, you’ll receive advisement precisely when you need (no more fear of being billed for a 15-minute phone call), and feel confident that the day-to-day legal work is being handled by someone who really gets YOUR business.