The Benefits of Having a Full, In-House Legal Team
Having a robust in-house legal team allows other legal staff to focus on their strengths and larger company initiatives, and ensures that the company is not only adequately protected on important legal risks, but expertly protected.
By Christine S. Johnson
Dickey’s Barbecue Restaurants Inc. hired its first in-house attorney in 2012 when there were just over 200 franchise locations. Prior to building an internal team of lawyers, the company relied heavily on outside counsel to manage overflow legal work and handle matters outside the single, in-house attorney’s areas of expertise.
Since 2012, Dickey’s has opened more than 300 new restaurants and is now the largest barbecue chain in the nation. More stores mean more lawyers. Today, Dickey’s employs a full legal staff including four attorneys. Adding multiple attorneys to the in-house roster has allowed the company to provide more effective and efficient legal advice to departments and executives across the company.
When asked about the benefits of bringing legal services in-house, most people tout the cost savings. Every company wants to minimize its legal spend, but there are many other reasons why having an internal legal team makes sense. Below, Dickey’s General Counsel Christine Johnson, describes four ways that the franchise has found value in having a larger in-house legal team to support business operations and help grow a large national brand:
Knowing the Client, Intimately
I am fairly certain that the rules of professional conduct prohibit “intimate” relations between an attorney and an individual client, but I don’t think an attorney can ever know too much about a corporate client. Most outside counsel begin working for a new client with very limited knowledge about the company’s day-to-day business operations. Although outside counsel may gain knowledge about the inner-workings of a company over time, there is no substitute for having an attorney who works alongside other company employees and is “intimately” involved in the business.
For example, during a manufacturer’s recall a couple of years ago, the in-house attorneys were required to work closely with employees in several other departments (including purchasing, operations, and public relations) to oversee and assist in carrying the company’s response. The attorneys collaborated and provided advice on the issuance of formal notices to the franchise system and communications to the public. The attorneys also learned first-hand about the business implications of locating and segregating product and the costs associated with the recall. Being part of this process gives in-house legal counsel a unique understanding of the needs of the client during an event like this and the practical knowledge needed to negotiate contractual terms regarding recalls with vendors going forward.
Expert Advice: Talking to Myself
Kidding about the topic, of course. I know enough to know that I do not know everything (don’t tell my husband I admitted that). Having a robust in-house legal team allows me to focus on my strengths and larger company initiatives. It also ensures that the company is not only adequately protected on important legal risks, but expertly protected.
For example, I hate insurance. I do not have the time or the expertise to wade through hundreds of pages of exclusions, conditions, and endorsements. However, I do recognize the crucial importance of insurance, such as protecting against new exposures such as cyber liability, providing peace of mind to directors and officers in order to attract the best talent, and protecting the brand in nightmare scenarios such as catastrophic accidents.
When I hired the company’s assistant general counsel, he mentioned that he “loves to curl up next to a fire and read insurance policies.” Rather than find ourselves in a high-stakes battle with our insurance company after something goes wrong, I saw value in his ability to negotiate with the insurers up front for the specific coverages that the company needs and anticipated that he could make use of institutional knowledge of the company and prior coverage experience. His expertise has allowed the company to significantly reduce overall costs for insurance, and filled in many important gaps in coverage that both our broker and risk manager overlooked. Although outside counsel could be hired at significant up-front expense, the outside counsel would not have all of the necessary knowledge of the day-to-day and larger risks faced by the company.
By having a larger in-house team, I can hire attorneys that have expertise that I do not and can invest in training the team to become subject matter experts in handling legal matters we see on a routine basis.
Let Me Read Your Fortune
Attorneys may not be able to predict the future, but most of us have a real talent (or annoying habit, depending on who you ask) for thinking through all the possible “what ifs.” If a company relies solely on outside counsel, someone within the company has to proactively reach out to obtain legal advice. Just sitting in our weekly executive meetings allows me the opportunity to provide all kinds of unsolicited legal advice. You might hear me interject, “Wait, you are planning on rolling out an aggressive new e-mail campaign to solicit the sale of franchises? I think I read something about some CAN-SPAM Act that may apply.”
When employees and the management team know that the legal team is just down the hall, they are far more likely to seek legal advice early and often. Having lawyers involved early in the process can positively influence legal outcomes. This certainly improves the company’s risk management profile.
How can we help?
Any in-house legal team spends a significant amount of time drafting legal documents and providing traditional legal advice, but the skill set found in most qualified legal staff (e.g. being organized, detail oriented, and capable of creative problem solving) is often useful to other departments within the company. Lawyers and other legal staff are often happy to take an active role in managing large scale projects company-wide and are typically not intimidated by the need to produce quality results within an aggressive timeline.
Ultimately, lawyer or non-lawyer, we are all in the business of selling barbecue. If the corporate stores are short-handed during the holiday rush or the marketing department needs extra bodies for a photo shoot, Dickey’s can count on the legal team to show up and pitch in along with the rest of the team.
Christine S. Johnson is general counsel for Dickey’s Barbecue Restaurants. Find her at fransocial.franchise.org.