How to hire your first lawyer

Are you reliant on external law firms and the associated costs of briefing out? There are many reasons to hire your first lawyer. Traditionally the key driver was to reduce the reliance on external law firms and these associated costs. However, the intangible aspects of bringing legal work in-house as well as heightened corporate governance and changes to regulations that are sweeping across Australia are now often the main consideration for companies. To help guide you in your decision, here are some of the more frequently asked questions.

When do you need to hire a lawyer?

A company generally decides to bring their legal resources in-house when their external legal fees exceed $500,000. The cost-benefit analysis of hiring your first lawyer can seem straightforward as a lawyer on a salary of half that amount still represents a significant cost saving. However, it is not always the case that recruiting a lawyer leads to a reduction in external legal fees as an in-house lawyer will critically examine legal practices and processes at your company and factor this into legal advice.

What type of lawyer do you need to hire?

In Australia a ‘lawyer’ is either a qualified solicitor or a qualified barrister. Barristers typically work in chambers and appear in court, instructed by solicitors. Either a barrister or a solicitor can work in-house, but the majority of companies favour recruiting solicitors because of the training and background they have.

Do you need a lawyer to hit the ground running or will they have time to learn the ropes? A lawyer’s level of experience will depend on your budget for the role, the complexity of legal issues they have to deal with and the scope to grow the role.

The most common skill set sought by companies hiring their first lawyer is a commercial contracts background. However, the background of the lawyers you are looking to recruit will be the work they do and the sector your company operate in.

If your company is regulated or requires a high degree of industry knowledge (such as telecommunications, pharmaceutical, technology, construction and energy) you may require a lawyer with specific industry knowledge from a similar company background or who has specialised in the practice areas within a law firm.

If your company is particularly acquisitive or has a lot of corporate activity, you might look to hire a corporate lawyer who has some general commercial experience. Generally speaking, it’s easier for a corporate lawyer to pick up commercial work if it comes up, rather than for a commercial lawyer to try and come up to speed with the nuances and complexities of running a corporate transaction.

When hiring your first lawyer, it’s worth taking a calculated risk on a lawyer from an in-house or someone with a demonstrable track record rather than a lawyer who has little or no experience working in a commercial environment. The exception to this would be a lawyer from private practice who has undertaken a number of client secondments.

Try before you buy

If you are constrained by budget and really need experience, you may wish to consider a senior lawyer on a part-time basis or an interim basis. Their salary can be pro-rated by the number of days per week they work or they can be engaged on a fixed-term contract or on a pay-as-you-go arrangement.

For more information on these options, the recruitment process and information on other companies in which I’ve helped to find their first in-house lawyer, please don't hesitate to get in touch.