The construction industry is always booming here in Louisiana and most areas of the United States. Workers come from all over the country to complete contracts. Construction is also one of the most injury-prone industries in the United States, according to the Bureau of Labor Statistics. Lien filings and personal injury claims can pile up quickly, and some construction firms wonder whether they need a separate construction attorney in-house to serve as general counsel.

Are you prepared to serve your clients and keep your company free of risk? If so, what’s the most strategic solution?

Here at Smiley Law Firm, we assist construction companies on both fronts.

General Counsel Defined:

There are a number of names for this position in a construction company or any larger company. In the industry we typically call in-house general counsel:

  • General Counsel (most common)
  • In-house Attorney
  • Chief Counsel
  • Chief Legal Officer (CLO)
  • Corporate Counsel / Attorney

There are instances where we serve in-place of an in-house general counsel. We have a team of construction lawyers who can jump on any task no matter how big or small.

Further, there are other instances where we work hand-in-hand with the in-house or general counsel for large construction companies. It really all depends on the current situation for our construction company client.

This is a fairly common concept in the legal world, however, it is unknown to many businesses, especially construction industry businesses. There are a number of firms who only perform the services that a general counsel offers.

The Argument Against General Counsel

For instance, maybe your construction matters appear fitfully—a result, perhaps, of seasonal building trends or one-off development projects. It’s hard to predict when and how such projects will land in your lap. Recruiting talent internally would probably be wasteful. Attorney salaries are a burdensome payroll expense for many construction companies.

In addition to having to pay, give benefits, vet and train people, you’ll need to give them work to do when they’re not tackling construction law matters. This is a recipe for paying overqualified lawyers to do bit-level work. No one will be happy.

The Argument For General Counsel, And Retaining Specialists For Specific Legal Needs

On the other hand, maybe you love working with construction clients, and you hope to attract more of them. For instance, you are making a push to bid more projects and hire more estimators. If so, you can (hopefully) expect a steady flow of new construction law work.

Theoretically, absent other considerations, you’d hire in-house general counsel. There is a steady need for contract reviews, employee considerations, and other general corporate legal work.

But even in this situation, don’t write off outside counsel. Sometimes it makes sense to keep your minor issues handled by this more generalist type attorney and then when complex construction law issues arise, reaching out to a construction law firm, like Smiley Law Firm, to assist.

Even though I am an attorney, I use other firms all the time when dealing with issues that are outside of my core competencies. I tell people all the time, I would not hire a plumber to repair the roof on my house. There are situations which arise that are outside the normal skill set of a general counsel. We know because we see this issue all the time.

I personally know a number of in-house or general counsel attorneys who would never want to set foot into a court room, however, there are instances which call for this need from time to time.

Challenges of Hiring General Counsel Internally

  • The attorney will learn on your dime.
    • Construction is a highly technical, complex area of law.
    • There’s a big learning curve.
  • The talent pool of people who truly know what they’re doing isn’t exactly huge.
    • State and local construction ordinances, rules and regulations often have no rhyme or reason.
    • This work is not intuitive.
    • It’s not enough just to find smart people and hope for the best. You need someone who’s labored in the trenches.
    • I joke all the time with the Smiley Law Firm attorneys, that we are some of the few people in the country who discuss the topics we live and breathe daily.
  • Mistakes get magnified.
    • Heaven help you if in-house general counsel misses the filing deadline or improperly fills out the wrong form.
    • Seemingly small errors can have cascading, expensive consequences—furious clients, big projects grinding to halt, etc.
    • Many times, mistakes are how a company realizes that they need a firm like ours.

Advantages of Using Outside Counsel

  • There is power in using niche service providers.
    • For instance, whether you hire in-house or not, it’s hard to find remarkable people, who understand Louisiana and United States construction law.
    • The technical grasp of what it takes understand the construction company and industry is complex.
  • There is no need to vet people carefully.
    • The law firm has done all the vetting for you years in advance.
    • The attorneys here deal with complex construction law issues on a daily basis, whether it is filing to have a lien removed or to collecting for an injured construction worker, we see it all.
  • The business relationship can end at any time or grow to any size.
    • With outside counsel, you can terminate the business relationship at any time without worry or cause.
    • The retention of an outside law firm can ebb and flow just like the tide, with all hands on deck for some situations and a drastic reduction in work when there are no issues.
  • There is no need to invest in new technology
    • Our firm has the latest technology to ensure communication, track projects, handle the bookkeeping, for our attorneys.
    • There are also various payment plans that a construction company can sign up for, with little or no long term commitment.

Make the Relationship Succeed

Whether you work with an outside lawyer or firm (like Smiley Law Firm) or your hire internally, keep the following in mind:

  • Set clear objectives. Clarify your goals, and quantify the standards by which you will evaluate success.
  • Date before you marry. If possible, start on a bite-sized project to see whether the relationship is workable. We offer traditional hourly billing for those interested. We also offer flat fee and subscription services for those who would like to test the waters before diving in with our firm.
  • Don’t wait until the 11th hour to recruit. Frantically googling prospective construction law firms weeks or days before your company has a hearing or court date is less than ideal. If you need this kind of help—or suspect you will soon—begin interviewing and recruiting now. An ounce of prevention is truly worth pounds and pounds of cure in construction law disputes.

Conclusion

To hire in-house general counsel or retain outside counsel is a choice that is very specific to each construction company. Depending on the needs of the company, either decision can be fruitful. Additionally, there are pitfalls of either decision as well.

Typically, we see smaller construction firms looking to retain outside counsel due to budgetary restraints. We also work with in-house general counsel for many larger firms who need additional legal services from time to time, or they are entangled in a nasty dispute that requires more manpower than normal.

Whatever situation your company finds itself, Smiley Law Firm is here to help and offer value as much as possible. We want clients for a life time, so we pride ourselves on helping construction companies get back to doing what they do best, building a better world.

Click here or fill out the form on this page, if you would like to learn more about our services or just learn more about construction law in general. We have a number of valuable resources that we give away for free.

Shares
Share This