[wp1]

This is exactly what most companies do. They hire in house counsel for their baseline, routine legal needs. And then outsource to biglaw for peak law stuff (litigation, big transactions).

In house counsel salaries are way less than those at a top law firm and you don't have to pay the difference between the firm's billings and what an associate--who's actually do the work-- gets paid.

[gumby]

> In house counsel salaries are way less than those at a top law firm

Just to expand: in house counsel gets a salary and doesn't have to do the business-building that a partner at a law firm has to.

Also for tech companies, in house counsel can get stock options. In the 2000 boom this caused mass defections of gold-digging lawyers from traditional law firms, which screwed them up too (boo hoo).

Not that very many startups need any in house lawyers!

[tluyben2]

> Not that very many startups need any in house lawyers!

This is not meant as a flaming comment as I do not know enough about it but in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs. I have been through a bunch of legal cases in the Netherlands and here no party wins usually in business cases. Even if you win you do not really win money so most cases just settle for a few bucks or win for the same few bucks at more legal cost. You get nominal expense back if you win aka if you pay E300 per hr for your lawyer then if could be you get E70/hr back. I do not know the exact numbers but it's basically mostly a loss for all which is why it happens very little and no one is really afraid of it.

[gumby]

>> Not that very many startups need any in house lawyers!

> [...] in the US it seems you do? I have read and heard a lot of silly lawsuit cases against startups over there which killed the startup because of (feared) legal costs.

Don't worry, it's not as bad as it looks. I do see a lot of lawyers running up the bills at the expense of inexperienced entrepreneurs. That really ticks me off.

In the first few years of a startup my legal bills are typically under $15K/year -- well under. Setting up the company doesn't cost much, and apart from some minor routine stuff (the odd employee termination mainly, plus a few contracts and the like) there just isn't much legal stuff to do. An A or B round financing shouldn't cost more than $20K even in the valley. In fact legal bills can be lower in the valley because the firms are used to doing the kinds of thing you need.

Patent stuff is more expensive but again, most companies have no need to bring that in house. If you hire some overseas people you'll need some legal help but you wouldn't bring that in house.

Some businesses do have an explicit legal needs (e.g. Uber) if they are going after a regulated industry. But, for example, one of my startups developed a drug and got it into clinical trials -- even though it's a highly regulated field there was no need for in house counsel, and actually the legal part of that was not huge.

If you get sued you'll hire an outside firm that specializes in litigation.

[punctilio]

Right. And there's been a trend at least over the past 10-15 years at larger companies of more work being done in-house -- the baseline, routine stuff you speak of -- rather than being outsourced to firms, another factor in the increasing pressure on the traditional big firm legal services model.

[maxxxxx]

In my company the in-house counsels are in the highest salary ranges. At a law firm they would have to do sales whereas in a corporation they have a pretty stress free job from what I can observe.