What an outsourced General Counsel actually costs

The buying question, answered structurally rather than with a number: what sits inside a fixed monthly retainer, what is billed separately, what an employed lawyer costs once the salary stops being the whole figure, and the three points at which the arithmetic flips.

Deciding · Part of Outsourced General Counsel

Most founders ask the price before they ask the scope. That is the wrong way round, but it is an entirely reasonable place to start, and the question deserves a straight answer rather than a brochure.

An outsourced General Counsel function is bought as a fixed monthly retainer. The number inside that retainer is decided by how much legal work the business actually generates: how many contracts it issues and receives, how many jurisdictions it trades in, how much of the founder's inbox moves across, and whether there is a live dispute. Dinmore Bell scopes that on a call and then holds the figure, so the cost of the function is a line in the budget rather than a variable nobody can forecast.

What follows is the arithmetic on both sides of the decision: what sits inside a retainer, what is charged separately, what an employed lawyer costs once the salary stops being the whole number, and the three points at which the comparison flips.

What is actually inside a monthly retainer?

The work that fills a founder-led business's legal week is rarely dramatic. It is the customer contract that needs to go out today, the supplier terms that arrived with three clauses nobody has read, the employee who has handed in notice inside a restricted period, the landlord asking for a rent deposit top-up, the investor asking for a copy of a shareholders' agreement that was never finalised.

A retained function absorbs that. It also does the thing an hourly relationship structurally cannot: it looks at the estate rather than the item in front of it. Knowing which of your contracts renew in the next ninety days is contract lifecycle management, and it only happens when somebody is paid to hold the register rather than paid to answer a question.

The practical test of a retainer is whether you hesitate before picking up the phone. If a two-minute question costs money, it does not get asked, and the two-minute questions are the ones that turn into six-figure problems.

What is charged on top of the retainer?

This is where a retainer stops, and it should be said plainly rather than discovered later.

Litigation is the clearest example. Strategy, correspondence and settlement negotiation sit inside the function. Issuing proceedings and appearing in court does not: it is instructed to specialists who are engaged, managed and cost-controlled by the same person who has been running the matter from the start. The commercial advantage is continuity. The person briefing counsel already knows the contract, the trading history and what the client actually wants out of it.

The same division applies to trade mark and patent prosecution, to statutory audit, and to the tax computation itself. The strategy and the spend are owned in-house; the filing is done by the registered specialist.

What does an in-house lawyer really cost?

The comparison founders usually run is a salary against a retainer, and it flatters the hire, because a salary is the smallest of the employment costs rather than the whole of it.

On top of gross pay, an employer pays Class 1 National Insurance contributions on earnings above a threshold. Automatic enrolment adds a pension: the minimum total contribution is 8% of qualifying earnings, of which the employer must pay at least 3%. A search for a first legal hire is usually run by a recruiter on a percentage of first-year salary. Then there is the laptop, the practising certificate if they hold one, the subscriptions, and the desk.

Two further costs are almost never modelled, and both are real.

The first is coverage. One lawyer is one lawyer. They take holiday, they get ill, and they occasionally leave, at which point the function stops until somebody is recruited into it. A business that has moved its contract flow onto a single person discovers how much depended on them in the fortnight they are away.

The second is range. A first legal hire is a generalist who is genuinely expert in two or three things and competent in the rest. That is not a criticism; it is what the job is. But the moment the business hits a property dispute, a cross-border restructuring or a data breach, the generalist instructs somebody, and the external spend the hire was supposed to eliminate reappears with a management layer on top of it.

When does hiring become cheaper than outsourcing?

The arithmetic flips at recognisable moments rather than at a headcount.

Volume. When the contract flow is genuinely enough to occupy somebody five days a week, a salary starts to beat a retainer on unit cost. That threshold arrives later than most founders expect, and the honest test is not how busy legal feels but how many hours a week it would take somebody who did nothing else.

Requirement. Some regulated sectors, and some enterprise customers in procurement, want a named in-house counsel on the org chart. Where that is a condition of a licence or a contract, the argument is over.

Proximity. Where the value of the role is sitting in the room every day, hearing what is being agreed before it is agreed, an employee wins. That is usually a function of the business's stage rather than its size.

The commonest answer for a founder-led business between thirty and six hundred people is neither one nor the other for long. A retained function carries the load, and it makes the eventual hire a better one: by the time the role is advertised, the contract estate is documented, the templates exist, and the person walking in inherits a function rather than a filing cabinet.

What about instructing a law firm only when something comes up?

Hourly billing is a good model for a transaction with a start and an end. It is a poor model for a standing obligation, because it prices the thing you most want people to do.

The pattern is familiar. Nobody rings about the supplier agreement, because it is only a supplier agreement. Eighteen months later the supplier has an exclusivity clause that nobody negotiated, and the cost of getting out of it is thirty times what the original review would have been.

Where a specialist is needed

Certain activities in England and Wales may only be carried out by a person authorised to do them. They are defined by statute:

Where a matter reaches one of those, or where it needs a tax computation, a statutory audit opinion or a registry filing, Dinmore Bell instructs and manages a regulated specialist, sets the scope, and controls what is spent. The client keeps one relationship and one person accountable for the outcome.

How the number is arrived at

The retainer is scoped against four things: the volume of contracts moving in and out of the business, the jurisdictions involved, the corporate complexity of the group, and whether anything is currently on fire. A single-entity UK business issuing its own terms is a different proposition from a group with a Dubai subsidiary, a shareholders' agreement being renegotiated and a supplier claim in correspondence.

That conversation is a Scope Analysis: thirty minutes, no charge, and it produces a figure rather than a range. If the answer is that the business does not yet need a retained outsourced General Counsel function, that is a perfectly good outcome of the call, and it is said on the call.