Sooner or later, every company faces the question: who will be responsible for its legal security? You can hire a lawyer on staff, or you can outsource the legal function to a consulting firm.
Each option has its own strengths and limitations. In this article, we'll compare both approaches in terms of costs, quality, risks, and convenience, and explore when outsourcing is more beneficial for businesses.
What is legal outsourcing?
Legal outsourcing is the permanent transfer of a company's legal tasks to an external provider. Under the contract, the consulting company undertakes contractual, corporate, HR, claims, and litigation work, as well as interactions with government agencies.
The client is assigned a dedicated lawyer who understands their business, and, if necessary, specialists in specific areas of law are brought in. The scope of services, timeframe, and cost are specified in the contract.
In-House Attorney: Benefits and Limitations
An in-house lawyer is a common option for many companies. Their main advantage is their constant presence: they are on-site, familiar with the employees and internal processes, and can quickly respond to any questions.
However, this format has a number of limitations that businesses often discover after hiring:
- High fixed costs - in addition to wages, the company incurs expenses on taxes and social security payments, vacation pay, sick leave, workstations, software, and specialist training.
- Limited expertise —one specialist cannot have an equally deep understanding of corporate, criminal, labor, tax, administrative law, and judicial practice.
- Dependence on one person – a lawyer's vacation, illness, or dismissal leaves a company without legal support at the most inopportune moment.
- Uneven workload - during quiet periods, the company pays for unused time, but during peak periods, one specialist may not be enough.
- Quality control is difficult —it's difficult for a manager without a legal background to assess the effectiveness of an in-house lawyer until a specific problem arises.
Legal outsourcing: what are the benefits?
1. A team instead of a single specialist. The company gains access to lawyers with diverse expertise: corporate law, contracts, labor relations, litigation, and enforcement proceedings. Each task is handled by a specialist.
2. Transparent and predictable costs. Payment is fixed in the contract and does not include payroll taxes, vacation pay, or workplace expenses. The cost of services is charged to the company, and the scope of support can be increased or decreased depending on needs.
3. Continuity of service. Legal support is not interrupted due to vacation, illness, or employee dismissal.
4. Practical experience. The consulting firm solves various problems for various clients on a daily basis and regularly represents their interests in courts and government agencies. This experience allows us to quickly find effective solutions and anticipate the other party's position in advance.
5. Contractor's Responsibilities. Deadlines, quality, confidentiality, and contractor's responsibilities are stipulated in the contract. The company receives not just an employee, but the obligations of a professional law firm.
6. Quick start. No need to spend weeks searching, interviewing, and onboarding a new employee. Work under the support agreement begins almost immediately after its signing.
Comparison: In-House Lawyer vs. Outsourcing
| Criterion | Staff lawyer | Legal outsourcing |
|---|---|---|
| Expenses | Salary, taxes, vacation pay, sick leave, workplace | Fixed payment under the contract |
| Expertise | Limited to the qualifications of one specialist | A team of lawyers with various specializations |
| Availability | Interrupted during vacation, illness, dismissal | Continuous, replacement of specialist is provided |
| Flexibility | The volume of work and payment do not change | The scope of services is adapted to the company's objectives |
| Start date | Employee search and adaptation | Immediately after signing the contract |
| Responsibility | Disciplinary, within the framework of labor legislation | Negotiable, stipulated in the agreement |
When to choose outsourcing
Legal outsourcing is particularly beneficial in the following cases:
- Small and medium-sized businessesfor which maintaining a full-time lawyer is not economically justified, but legal issues arise regularly.
- Companies with an in-house lawyerwho require support in litigation, enforcement proceedings, or highly specialized matters.
- A growing businessthat needs to quickly scale legal support without expanding its staff.
- New projects and startupsthat need to properly establish a corporate, personnel, and contractual framework from the very beginning.
- Foreign companiesoperating in Kazakhstan and requiring a reliable local legal partner.
An in-house lawyer is generally appropriate for large companies with a large daily volume of repetitive work. However, even in these cases, many combine both formats: the in-house specialist handles day-to-day matters, while an external team handles complex transactions and disputes.
How to switch to legal outsourcing
- Consultation. We discuss the company's objectives, current issues, and expectations for legal support.
- Legal audit. We review key documents and identify legal risks.
- Formulating the terms. We determine the list of services, the interaction procedure, and the cost of support.
- Contract and start of work. We sign the contract, assign a responsible lawyer to the company, and get to work.
Egsat consulting provides legal outsourcing services to companies in Kazakhstan, from corporate governance, contractual work, and HR administration to litigation, legal representation, and defense in enforcement proceedings. Contact us, and we'll find a convenient and beneficial collaboration solution for your business!
