When a business is faced with many legal requirements in various different areas, outsourcing legal services  to a law firm is more than worth considering. Before I explain the reasons why a business should contemplate outsourcing their legal needs to a law firm, as opposed to having an in-house lawyer, it’s important to clarify the difference between in-house legal services and outsourced legal services.

What is the difference between in-house legal services and outsourced legal services?

In house legal services is where a company employs a lawyer to work solely for that business. In-house lawyers are ideally placed to deal with the specific legal needs of the company. As an employee of the company, they are also entitled to all the usual employee benefits, including holidays, sick pay, maternity/paternity leave etc. They can be called on to provide whatever legal services the business needs.

In comparison, outsourcing legal services is where a company engages with a law firm, usually on a retainer or subscription basis, to carry out all the legal requirements of the business. A retainer model or a subscription refers to an agreement between a law firm and the client where the client pays a fixed monthly or quarterly fee for a pre-agreed volume of service. If a business has regular on-going legal requirements, and/or long term goals, a retainer or subscription agreement between the company and law firm would be the route to go.

So why choose to outsource your legal services?

In short, to pay less for more.

Over the years, more & more of our commercial clients have engaged with us as their outsourced legal services provider. I recently had a bi-annual review of one client’s retainer and asked them, in lay person’s terms, why they used it. We were having a candid conversation about price points, and I openly said that their monthly retainer fee was not far off what they would pay to employ an in-house lawyer. They already knew this though, and their reply reinforced what I have always believed to be the benefit of outsourcing legal services. That client would rather pay one firm to provide all the company’s legal services, than pay one employee to provide some of them.

With the best will in the world, one in house lawyer will not be able to cover all the legal requirements of one company. Undoubtedly, they will be brilliant with contracts, or superb with employment law, or amazing at litigation. (And they are just a few of the areas of law which are outsourced to us.) They are unlikely, however, to be outstanding at all 3. My client’s reply reminded me that having us on a retainer gave them access to individual experts in those 3 fields, as well as in GDPR, property, insolvency, and many more. Through one point of contact, a retainer client can access a full legal service whilst still only making one monthly payment.

As well as the breadth of service available to them, retainer clients can flex their legal spend as and how they need it. They have the cash-flow comfort of knowing their base level outgoings each month and can top up if a bigger project comes along. If they were relying on an in-house lawyer, that would not necessarily be possible; whereas retainer clients can access any legal resources whenever they need them. Legal services retainers come in all shapes and sizes. The client I mentioned above buys a set amount of legal spend per month and tops up where necessary. Other clients like a “Pay – As – You – Go” retainer that they pay into and draw down against on a non-time-limited basis. Others still have a capped monthly spend that they review each quarter according to their commercial needs.

The other great advantage of having a whole law firm at your fingertips is that you rarely have to worry about holiday cover. If a company employs an in-house lawyer, that person will be entitled to roughly 6 weeks’ leave a year; during which time the company has no legal support. Outsourcing legal services overcomes that issue, as law firms are invariably open for most of the year.

Last, but by no means least, is a law firm’s professional indemnity insurance. Law firms are obliged to have at least £3million of cover. In house lawyers are not. It makes sense then to outsource the risk to someone else. If an in-house lawyer makes a slip up it’s on the company. If a law firm makes a slip up, it’s down to them.

Whatever a company’s reason for outsourcing, the right legal services retainer should suit them – not just the law firm. There a many different ways to outsource, from wholesale to topping up to drawing down. If you think that your company could benefit from access to year-round cross sector legal support, why not have a chat with us about the retainers we offer.

In summary the benefits of a retainer services mean a company can:

  • Pay less for more
  • Access a full range of services whilst still only making one payment
  • Access any legal resource as and when they need
  • The ability to flex their legal spend as and how they need
  • No need to worry about holiday cover
  • Outsource insurance risk

For a no obligation chat about outsourcing your legal requirements to contact law do not hesitate to contact me on lucy.tarrant@cognitivelaw.co.uk or call on 0333 400 4499.