Instead of creating an entire legal department within your company or business, why not simply outsource that work to an external law firm?

Having an in-house counsel means that the lawyers are paid as employees of the company, they are on a payroll. Assume you have one lawyer, one secretary, and one intern, their total monthly salary is around Kshs. 300,000/=. Having two or three of them is even much expensive.

Hiring an external law firm allows you to negotiate and pay as little as Kshs. 100,000/= per month.

In-house and External Law Firms

In-house and external firms, literally do the same thing, they handle regulatory issues, drafting and reviewing contracts such as employee contracts, contracts with suppliers, contracts with customers, dealing with new employment standards and give the company advice on how to maintain compliance in various areas where the law is constantly changing, such as environmental, OSHA, sexual harassment, and discrimination.

We understand that budgets are tight for small and medium business owners, and having a lawyer on retainer to handle day-to-day legal issues that may arise can seem impossible. Large corporations can afford to hire an in-house lawyer and establish an entire in-house legal department with many lawyers. This is not an option for a small-business owner. However, you may be surprised to learn that there is a cost-effective way for a small business to obtain consistent, high-quality legal services to meet their day-to-day legal needs, and that is outsourcing for an external law firm. Some law firms here in Nairobi such as W.J. Maxwell & Associates Advocates, provide general counsel services at reasonable rates, and in some cases on a fixed-fee basis. 

Which Option is the Best for your Business?

Your best option depends on your business’s needs. If your business needs counsel with multiple areas of expertise such as micro-finance lending institutions, real estate developers, healthcare sector, tech companies, non-profit organizations, outside counsel is likely your best option. Also, if you run a startup or small business and don’t have complex business dealings requiring legal expertise, an outside law firm may be a good option.

In-house counsel can be a great asset because they can deal with any legal matter a business deals with. They are responsible for all the compliance and legal aspects of a business, however, not all companies have the resources to hire in-house counsel.

Benefits of Hiring a Law Firm Outside of Your Company Over an In-house Department

Hiring an external law firm instead of having an in-house counsel for a company in Kenya can offer several advantages. Here are some key benefits:

1. Expertise and Specialization

External law firms often have a team of lawyers with specialized knowledge in various areas of law. By engaging a law firm, you gain access to a broader range of legal expertise that may be necessary for different aspects of your business. This can be especially beneficial if your legal needs are diverse and require specialized knowledge in areas such as corporate law, employment law, conveyancing, intellectual property, or taxation.

2. Cost-Effectiveness

As mentioned earlier, hiring an external law firm on a project or case basis can be cost-effective compared to having a full-time in-house counsel on a monthly payroll. With an external law firm, you only pay for the services provided, and you can negotiate fees based on specific projects or tasks. This can be more budget-friendly, especially for smaller companies or those with fluctuating legal needs.

3. Flexibility and Scalability

Engaging an external law firm allows you to scale your legal services up or down based on your business needs. If you require legal assistance for a specific project, you can engage the law firm for that period and discontinue their services afterward. This flexibility is particularly valuable if your legal needs vary throughout the year or if you have intermittent requirements.

4. Access to a Network

Law firms often have extensive networks within the legal community, both locally and internationally. This network can provide valuable resources and connections, such as access to subject matter experts, industry-specific insights such as insider information and pointing you to the right direction with investors and general expansion to your business. Leveraging a law firm's network can contribute to more comprehensive legal support and success for your company.

5. Objective and Independent Advice

An external law firm can offer an objective perspective on legal matters and provide independent advice. As external advisors, they can assess your legal issues from an outsider's viewpoint, without being influenced by internal dynamics or conflicts of interest. This objectivity can contribute to more impartial legal guidance and help mitigate potential risks.

6. Current Legal Knowledge

Law firms prioritize staying up to date with the latest legal developments, regulations, and precedents. By engaging a reputable law firm, you benefit from their continuous legal education and awareness of recent legal changes. This ensures that your business is well-informed and compliant with applicable laws and regulations.

7. In-house Cannot Represent you In Court During Litigation

In-house cannot represent you in court during litigation. To represent a company in court during litigation in Kenya, it is necessary to engage the services of an external advocate who is duly licensed and registered with the LSK.

The restriction on in-house counsel representing their company in court is primarily based on the principle of independence and impartiality. Advocates are expected to act as officers of the court and owe a duty to the court, in addition to their duty to their clients. By not allowing in-house counsel to represent their company, the legal system aims to ensure the integrity of court proceedings and maintain an unbiased environment.

Furthermore, the restriction helps avoid conflicts of interest that may arise when in-house counsel simultaneously act as both legal advisors and advocates representing their employer in court. It safeguards the interests of the client and ensures that the litigation process remains fair and impartial.

Conclusion

It's important to note that the decision to hire an external law firm or an in-house counsel depends on your company's specific needs, budget, and long-term legal requirements. It may also be possible to strike a balance by having a combination of in-house counsel and external law firm support, depending on the complexity and volume of your legal matters.

W A N T  M O R E  I N F O R M A T I O N  O N  E X T E R N A L  L A W  F I R M  T O
P A R T N E R  W I T H  Y O U R  B U S I N E S S ?
T H E  A D V O C A T E S  A T  W . J . M A X W E L L  &  A S S O C I A T E S  A R E  H A P P Y  T O  H E L P .
C O N T A C T  U S  F O R  M O R E  I N F O R M A T I O N .

W . J . M A X W E L L & A S S O C I A T E S  A D V O C A T E S
info@wjmaxwell.co.ke | www.wjmaxwell.co.ke || 0733 61 09 61