In-House Counsel, Outside Help

And while an employee probably understands the company well, Faber says the process of considering needs and communicating them to an outside party may result in clearer contracts. “You have to be clearer about your needs and about the contract you’re negotiating,” Faber says. “If you understand the contract, that helps you execute it.”

If disputes arise after a contract is signed, he adds, Vision-Ease employees’ understanding of the contracts usually means that they can discuss issues directly with the other party, rather than having to go through lawyers.

Some companies don’t have enough work to keep an in-house legal team busy, or have work that varies a lot in both type and amount. “I’ve chosen not to build [an in-house] staff because I do not believe that our company’s legal needs are particularly well suited to building an in-house capacity,” Tourek says.

Instead, he serves as a gatekeeper, deciding what issues require legal help and steering the work to an appropriate outsider. “I think the best service I provide my employer is that I make those judgments and steer the cases to the right lawyers in town or across the country, who have the right skills and the right personality and the right experiences for the legal issue that we’ve got,” he says.

Many companies balance their legal needs between inside and outside staff. Businesses often retain in-house lawyers to cover the legal areas that are related to the firm’s core business. “We definitely keep in-house the specialized area related to banking—lending and deposits,” says Diane Stockman, senior vice president of Wayzata-based TCF Financial Corporation.

Other local firms have staffers handle regulatory matters, intellectual property protection, U.S. Food and Drug Administration approvals, contracts, and real estate matters.

Increased workloads, however, will drive companies to seek help in even these core areas. “Sometimes if we’re buying a small software company in a particular geography, we would do quite a bit of work ourselves, but we don’t have the capacity to do a transaction that will take several weeks or months to complete,” says Bruce McPheeters, general counsel at St. Paul– based Lawson Software.

Specialized Services

If litigation arises, most firms hire an outside attorney who can work the case and be physically present in court during a trial that may last weeks or months. “We don’t have enough people to devote days at a time to a single matter,” says Kathleen Hughes, director of labor and employment law at Supervalu, Inc., in Eden Prairie.

Even if they had the staff time, some companies may not have enough litigation work to keep those lawyers busy. “If you have the inside lawyers to do it and the case is over, what are you going to have them do?” asks Ron Lund, who is currently of counsel at Minneapolis law firm Fredrikson & Byron and has served as in-house counsel at Medtronic and Golden Valley–based General Mills (then Pillsbury). “The logistics are just impossible.”

In hiring an outsider, businesses can choose someone with expertise in the legal issue at hand. “In my view, you want the best anti-trust litigator you can find on an anti-trust case,” Lund says. “It’s easier to find someone on the outside and have multiple choices instead of putting all your eggs in one basket on the inside.”