When an enterprise starts growing, the number of legal complexities it has to handle also increases manifold. As it signs new deals with multiple vendors, suppliers, customers, and other business partners Contracts pile up, compliance risks multiply, and the enterprise must ensure that it continuously complies with multiple local as well as international laws. At this time, the decision it needs to make is not whether to build an internal legal team or not, but how to do it most effectively.
The decision to add an in-house counsel goes beyond just adding legal capacity. It defines how the enterprise will manage legal data, streamline workflows, and align compliance with the growth objectives of the business from here on.
This is why the enterprise leadership team must be very clear about what they want to achieve by building their internal legal team. They must answer the following key questions before deciding how to build the internal legal team. Getting the right answers to these will help them design a legal function that is scalable, intelligent, and can have a long-term impact on the business.
1. What Role Will The Legal Team Play in Driving Business Outcomes?
For any enterprise, the first in-house lawyer is not going to be just another legal resource that they hire. They will be the architects of how legal strategy connects to the growth of the business. Therefore, before hiring, the leadership team needs to define what they expect the legal team to achieve.
They must start by assessing the legal challenges that are currently slowing the business down. Are the deal cycles stretching because of lengthy contract reviews? Is the compliance team working in a silo? Are the regulatory risks visible early enough for the leadership team to act in time? The answers to these questions will reveal whether the legal function needs to focus on efficiency, visibility or strategic alignment with the other business functions.
A forward-looking legal counsel will help in bridging the gap between risk management and revenue. They will find out how the business can grow faster even after complying with the legal regulations, identify ways to speed up the contract cycles, and design effective controls that will empower, not restrict, the business teams.
Modern enterprises are increasingly expecting the legal teams to deliver measurable outcomes. They are doing it by integrating legal metrics with business KPIs, like turnaround time, deal closure rate, and compliance predictability. When the legal function adapts to this change, it stops being a cost centre and becomes a driver of performance for the enterprise.
2. Should You Hire a Generalist or a Specialist?
Another critical question that the enterprise must answer is what it is expecting from the in-house counsel. Should they be flexible enough to handle the entire legal process or be highly focused on a particular area? The answer to this dilemma will depend on the company’s stage of maturity, how complex its operations are, and the extent of legal exposure it faces.
Hiring generalist counsel is ideal when the organisation needs a single point of contact who will manage varied functions, such as contracts, compliance, and governance. The generalists can function in a versatile way, can coordinate across multiple departments, and help standardise legal processes that may currently be handled by multiple external firms.
On the other hand, hiring a specialist is the right choice when the enterprise operates in a heavily regulated or high-risk industry, such as fintech, manufacturing, or pharmaceuticals. The vast domain knowledge of a specialist will allow them to anticipate complex regulatory shifts early and design frameworks that will protect the enterprise from future risks.
Many enterprises begin with a generalist who receives support from external subject matter experts. Once the legal function matures, specialists may be hired to strengthen the domain-specific areas. They will also be able to handle the increasing complexities in areas where the enterprise faces the most strategic risks.
3. How Can Legal Integrate Smoothly with Business Teams?
In most large organisations, the legal team often sits away from the other teams that handle day-to-day business operations. Separation can create a sense of alienation in the legal team. This can lead to frictions, slow decision-making, and misaligned priorities among the different teams. The goal of the enterprise should be to make the legal team a business partner rather than just a compliance checkpoint.
The leadership team can start this process by mapping how different departments interact with the legal team currently. They must also understand the legal needs of the different departments. For example, the sales teams may need faster contract reviews, the procurement team may want clearer compliance workflows, and the finance team may need accurate regulatory insights for reporting purposes.
The leadership team must assess these needs so that they are able to design a structure where the legal function will be integrated into the working of each of these departments, instead of functioning separately.
They must also build clearer communication channels between the legal team and the other departments so that they can collaborate easily. They must also have regular touch points, such as quarterly risk reviews or deal support sessions that will help the legal team to stay aligned with the business priorities of the enterprise.
When the legal team understands the business’s goals and the business leaders respect their legal insights, the entire organisation benefits from faster and smarter decisions.
4. What Tech Stack Should Your Legal Function Start With?
An enterprise thinking of setting up its first internal legal function must consider more than just hiring. Equally important is deciding the tech stack that the legal team will work with. Given the significant increase in complexity in legal work over the years, no forward-thinking enterprise can expect its legal team to manage everything manually. They must choose an efficient legal tech stack that will build efficiency from day one and prevent future bottlenecks as the volume of the contracts, compliance tasks and audits grows.
The foundation of any legal tech stack starts with a Contract Lifecycle Management Tool that can help in drafting contracts, track versions, and speed up approvals and renewals. These capabilities of a tech stack reduce the manual effort and help the leaders see where the deals are slowing down.
Next comes a Compliance Management Tool that will map obligations across regions, monitor regulatory updates, and flag potential risks before they become problematic for the enterprise.
For any enterprise that regularly faces disputes or regulatory actions, adding a Litigation Management Tool also becomes equally important. It can centralise case data, track court dates, extract filings, and help the leadership monitor the enterprise’s legal exposure across business units or geographic regions.
A comprehensive tool like Legistify’s AI Powered Legal Operations Platform For Enterprises offers all these capabilities and more. These tools integrate with the other tools like CRM, procurement, and finance systems that the enterprise uses. This ensures that data flows between the system seamlessly and the teams get an unified view of what is happening in the enterprise. By automating the document creation and workflow approval processes, these tools help the legal teams to deliver faster and better results.
5. How To Measure The Success Of The First Legal Hire?
After hiring the first in-house legal counsel, the enterprise must assess the success of this effort. Defining the metrics of success early will ensure clarity and accountability for both the legal function and the leadership team.
With the work of the legal team having become more complex and modern in the recent years, the traditional measures of success, such as the number of contracts reviewed, or the disputes handled by them, offer limited insight. Therefore, the enterprise needs to define metrics that are broader and outcome-focused to tie the legal performance to business results.
The leadership team can start by selecting operational metrics that reflect efficiency, such as contract turnaround time, policy implementation rates, and internal response times. These indicators will reveal whether the legal function is streamlining or slowing down the daily workflows.
Next, they can look at the risk and compliance metrics. This will enable them to measure how effectively the legal counsel identifies the regulatory gaps, mitigates recurring legal risks, and reduces the dependency of the enterprise on external law firms. These results will show how the legal team contributes to the long-term stability of the enterprise.
Finally, they must track strategic impact metrics. These might include improved deal closure rates, reduced exposure to litigation, or higher ratings of satisfaction from internal business teams. Over time, the legal team should be able to demonstrate a measurable influence on the revenue earned, governance quality, and decision-making speed.
When the enterprise tracks the legal performance like that of any other business unit, the legal team moves from being a reactive safeguard to a proactive force that supports business growth.
Conclusion
Hiring the first in-house counsel is one of the most strategic decisions that an enterprise has to make. It can have a profound impact on how legal and regulatory compliance and commercial priorities will align as the enterprise grows. Hence, asking the right questions even before hiring the first legal counsel becomes important.
The company must be clear about the legal team’s role, the type of counsel to hire, how they will work with other teams, and the right technology stack. They must also decide on their KPIs so that their performance can be processed accurately. Ultimately the legal team should not exist just for managing contracts and disputes. The legal team must provide leaders with a clear understanding of the risks, the speed of decision-making, and the adherence to enterprise compliance.
Enterprises that provide their legal team the right technology and data gain a long-term advantage. Legistify’s AI Powered Legal Operations Platform for Enterprises can help the legal team move from reacting to issues to proactively anticipating and managing them. If you want to see how it can make your legal team an enabler of business, then book a demo now.
Frequently asked questions
- When should an enterprise consider hiring its first in-house counsel?
Once an enterprise grows and it becomes difficult to depend solely on external legal experts to manage all the legal work, it is time to hire an in-house counsel. Another way to assess this is when a multitude of legal requests start affecting the deal speed, compliance timelines are not met, or communicating with the external councils becomes a problem, The enterprise should hire an in-house counsel.
- What should be the immediate priority for a new in-house counsel?
Immediately after joining, the in-house legal counsel should focus on mapping the existing legal processes, identifying risks, and building strong relationships with the business teams.They should get a clear understanding of the internal workflows, which will help them establish their credibility in the enterprise and achieve some quick wins.
- Should enterprises continue working with external law firms after hiring in-house counsel?
Yes. Relationships with external counsel should always be maintained so that they can help in handling specialised or high-stakes matters. The in-house counsel can act as a coordinator in those matters and ensure that the advice from the external counsel aligns with internal priorities and budgets.
- How large should the legal team be for a mid-sized enterprise?
There is no fixed number for this. The team size will depend on the complexity of the industry the enterprise operates in, deal volume, and compliance exposure. Many enterprises start with just one senior counsel and then expand once the entity grows or the legal requests become more frequent and specialised.
- What kind of tools help a new in-house counsel perform effectively?
The key tools that an in-house counsel can use include contract management, compliance tracking, and litigation management systems. These tools provide centralised dashboards and automated workflows, which will allow the council to deliver faster and data-driven support across departments.
