What is Legal Counsel?
The term "legal counsel" refers to a physical person, often an attorney or agent, tasked with providing guidance as it pertains to legal rights or obligations. Sometimes referred to as legal advisories, the primary role of a legal counsel is to put this advice in the form of documented legal instruments or counsel.
Legal counsel serves a very specific purpose for those in need of recovery to a financial loss. It is this legal advisor who examines the relevant laws and regulations governing a specific company or entity , providing information on which actions to take when pursuing compensation as warranted. They are also responsible for preparing all documentation to be filed with the courts, should the need for litigation arise.
Companies sometimes employ this service internally, depending on the nature of their business, or they may opt to contract the service from another provider. In most instances, legal counsel refers to the service provided by a licensed attorney. The counsel may not serve in the capacity of counsel for a court case however, as this would represent a conflict of interest.
Legal Counsel Responsibilities
For these reasons, the principal responsibilities of the legal counsel in all organizations include the following:
Contract Review
The legal counsel’s contract review responsibility is not limited to vendor contracts but also includes reviewing and negotiating nondisclosure agreements, intellectual property agreements, licensing agreements, development agreements and private placement memoranda. Organizations should require their legal counsel to review all contracts, regardless of the subject matter, with the possible exception of small value contracts.
Compliance Monitoring
The legal counsel’s compliance monitoring role typically will be with respect to industry-specific regulatory requirements that fall under: (i) environmental protection laws; (ii) export control laws; (iii) the Drug Enforcement Administration ("DEA") and Office of National Drug Control Policy rules and regulations; (iv) Health Insurance Portability and Accountability Act ("HIPAA") rules and regulations; (v) Food and Drug Administration ("FDA") rules and regulations; (vi) financial services regulations (including securities, healthcare and consumer financial protection); (vii) employment and employees’ rights laws; (viii) data privacy and breach notification laws; and (ix) state and local laws.
Other compliance responsibilities may extend to, among other things, Sarbanes-Oxley Act compliance and reporting requirements, and internal corporate audits.
Depending on the size and type of organization, the extent of the legal counsel’s delegation of authority in this regard ranges from merely making recommendations to the audit committee to having overall authority for the audit process.
Providing Legal Advice to Executives
The legal counsel’s legal advice role is directed towards supporting the corporation’s business model and its overall business strategy by means of risk mitigation. Helpfully, by including legal counsel in all important contracts and negotiations plus all compliance matters, an organization will effectively equip its legal counsel to protect it from disputes and claims, and the attendant litigation and regulatory costs.
Skills and Qualifications for Legal Counsel
A law degree is essential for a legal counsel position, and at least two years of relevant experience is often considered a strong foundation for this role. The American Bar Association recommended that JD candidates complete at least one law school placement or internship, as work experience can help them learn to apply their education to the real-world situations they will encounter on the job. Some employers may expect this role to hold a state license to practice law. Excellent persuasive and argumentative skills are needed to act effectively as an advocate. Strong analytical and organizational skills are also important for legal research and analyzing complex information.
Ideal candidates for this role will possess excellent written and verbal communication skills, as it is the job of a legal counsel to properly present and interpret the law to laypeople and legal professionals alike. A legal counsel must be able to communicate clearly in both approachability and logic in order to be trusted by their clients and effectively supported on all aspects of the law. They may be required to provide legal training to the company staff, so patience and effective teaching skills are also helpful in this role.
Industries Employing Legal Counsel
Given the multitude of legal issues and challenges businesses face, companies of all shapes and sizes across various industries hire in-house legal counsel to take the helm of their legal affairs. Industries include technology, financial services, healthcare, life sciences, energy, manufacturing, telecommunications, retail, consumer goods, entertainment, and gaming. Companies in these sectors confront a range of legal, regulatory, labor, and employment matters.
Technology companies typically hire legal counsel to support both the legal department and the business units for matters ranging from IP protection and privacy to regulatory compliance and negotiating OEM or joint-venture arrangements. For established tech giants, low-cost in-house counsel provides quality advices on a broad range of business-related issues. In smaller and particularly younger high-tech companies, insights on venture capital financings and forming strategic partnerships are expected to be provided in-house.
Banks and financial institutions hire in-house legal counsel to draft due-diligence opinions, draft and negotiate loan documents, deal with regulatory issues, administer tenders and other offers, and provide advice on securities regulation and compliance. Legal departments within banks and financial institutions often compete with one another for the best talent and may invite associates to interview across their many offices.
Healthcare companies enlist in-house lawyers to help them with everything from patient care standards and drug approval to government relations. Healthcare companies are laden with labor and employment issues, and employees often retain their positions for years. The slow-moving workforce often leads to the easy development of in-house expertise regarding HR issues.
Pharmaceutical companies rely on legal counsel for drug approval, patent issues, and regulatory compliance. As the pharmaceutical industry is heavily regulated by state and federal governments, in-house lawyers are needed to protect companies against fraud allegations, among other regulatory traps.
Energy companies must comply with an array of regulatory regimes, and as such, in-house counsel must have expertise in regulations governing power generation, transmission, and distribution.
Manufacturing companies rely on legal counsel to ensure that their intellectual property, physical assets, and international supply chain are protected from legal risks. In-house lawyers in the manufacturing industry can expect to work on sophisticated joint ventures and co-branding arrangements, compliance and regulatory issues, and sales agency arrangements.
Telecommunications companies require legal counsel to address technical issues in interoperability, IP management, and licensing. Overlapping government regulations also create a demand for legal counsel.
Retail and consumer goods companies need legal counsel to head legal compliance departments, manage real estate, and work on labor and employment issues.
The Challenges and Benefits of Being Legal Counsel
A career as in-house legal counsel is very much a career in evolution. Both the system of laws the counsel must work with and the relationships on which they rely are in a constant state of change. Listing just a few examples:
• Technology changes the way law is practiced. The arrival of electronic documents changed the way cases are conducted. The increasing reliance on cloud-based software and resources both frees and constrains the legal counsel. On one hand, it can make it easier to share data with clients and experts, and work with file remotely, yet the same benefits can create new avenues of liability for missing or damaging documents.
• The rise of globalization changes the range of laws the legal counsel must handle; and changes the relationships and privileges associations the in-house counsel must develop and rely on, which may be better in the form of international and multinational partnerships.
• The advent of on-demand manpower offers a greater flexibility for in-house legal counsels to work with various lawyers across their specialization fields to draw in a variety of expertise at any time.
Legal depth is challenging to maintain while also meeting the demands of daily practice. As is well known , each specialty covers a distinct field of expertise, from employment law and family law to estate planning and international business law. And it is common practice for even the most skilled and experience legal counsel to find themselves calling upon partners for corresponding specializations and assistance. There lies a unique challenge for in-house legal counsel to be able to delegate work between lawyers without losing their clients and their reputation on that count.
It is not all problem, though. In-house legal counsel who choose to develop their expertise in the chosen specialty, or to develop a specialization as a premium service for their home organization, can invest more deeply into the means of optimizing that expertise. They can look into different strategies of integrating their expertise into their firm’s practice and branding it, to garner a market advantage. For specific industries, there is a growing demand for legal counsel specialists, and opportunities to develop careers that absolutely focus on industry-centric matters.
How to Become Legal Counsel
To become a legal counsel, you will have to pursue and complete a bachelor’s degree in law (4 years) and a Juris Doctor degree (3 years). While, in most instances, there is no mandatory requirement to have both, some jurisdictions will require it. This is particularly true for public service or public defender counsel positions. However, on the job experience is generally mandatory.
Then the additional educational requirements are the same as those for any licensed attorney and these will vary from state to state. Licensing requirements generally include passing the bar examination, which is prepared annually by each jurisdiction (state). There are also character and fitness requirements, a written ethics exam, a U.S. law course, and the Multistate Professional Responsibility Examination, which focuses exclusively on the conduct of lawyers.
In some states, there are limited jurisdiction licenses that allow for the practice of only certain areas of law within that state. General admission to practice is typically for all other areas of law. In some states, a limited jurisdiction license will be required in order to be eligible to practice law for a corporation without having to obtain a general admission.
There is an advanced degree known as LL.M (Legum Magister) for attorneys who wish to further their education. Not every state allows such candidates to practice law. It should also be noted that students who wish to complete an LL.M degree are not required to have completed an LL.B or J.D degree. Completion of this degree allows them to concentrate their studies on certain areas of law and since an LL.M does not automatically grant a license to practice, many choose to pursue their licenses in order to practice in specialized areas that require an LL.M. Such areas of concentration include international business law, international taxation, environmental law, human rights law, intellectual property law, and many others. However, an LL.M degree can be useful for legal counsel and is preferred by some employers.
Future Trends Affecting Legal Counsel
Automation and technology are already having a significant impact on the legal sector. The use of Artificial Intelligence is allowing for contract review and management to be performed using AI-based technologies that allow for the extraction of information by testing for specific attributes or parameters as compared to humans performing this rote work, enabling the attorney to focus on more complex needs. This will permit the client to access information faster and at a lower cost.
Cloud computing is taking hold in a big way, and is particularly useful to small and midsize law firms that do not have the IT resources of large firms or corporations, and may have limited budgets. Cloud-based software allows an army of law office management to be available for not much more than the price of a monthly subscription . A comprehensive cloud-based document management system, client management software, and time/billing/accounting software can easily be selected and added based on selections, at what can be a very affordable price.
Blockchain technology is starting to take hold and will further revolutionize the delivery of legal counsel and services. The key benefits of blockchain that relate to contracting are that there is no third-party, all conditions to the contract must be met prior to performance, immutability of contract terms and lack of ambiguity of contract terms. Blockchain holds great promise for the legal space. With the "hot" market for AI, it should be no surprise that large firms are moving to partner with legal tech start-ups. It is increasingly incumbent upon legal counsel to keep an eye to the future in terms of technology developments and how they pertain to the delivery of legal services.