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Inside job When is it time to hire an in-house counsel? The debate is on

William Farran is the vice president, general counsel and corporate secretary at Innophos, Inc.

Melissa Peters has seen the numbers. And she knows they vary.
Let’s see: There’s a job-search site that says the average salary for an in-house general counsel in New Jersey is $138,000.

There’s a total compensation model — one that adds benefits and bonuses — that brings the estimate to between $250,000 and $500,000, depending on the size and location of the company.

Then there’s the reverse payment rule of thumb used by the company she works for — Princeton Legal Search Group: If you’re spending $350,000 or more for outside legal services, you may be better off hiring your own legal counsel.

So what’s the best figure to go by? Would you believe none of the above?

Peters, the director at Princeton Legal Search, said looking at financial metrics exclusively isn’t the best gauge for a company thinking of hiring in-house counsel.

“That’s the easy calculus, to look at the numbers,” she said. “A big component is assessing when you need that day-to-day, off-the-cuff advice that doesn’t require you calling outside counsel and having them charge for your time.”

Rather than being determined by something quantifiable, Peters views the hiring of an in-house general counsel as an almost intuitive feeling that “having someone who can do things like sit in meetings with you to calibrate risks” has become a necessity.

Once business decisions with legal implications are made, seeking advice from outside counsel is more of a reactive approach, she explained, whereas having in-house advice at the ready is more proactive.

William Farran, vice president, general counsel and corporate secretary at Innophos Inc., couldn’t agree more.

He lists these day-to-day responsibilities for a general counsel: baking legal protection into whatever strategic plan a company pursues, mixing in business acumen to advise management teams and generally acting as something equivalent to “a brother or sister to the CEO.”

“Honestly, a lawyer can apply his or her expertise in the beginning, middle and end of every significant business decision that’s made,” Farran said.

Brett Johnson

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