Do You Need a Lawyer on Retainer? How to Decide

Most businesses start by calling a lawyer when something goes wrong. That works until the questions start arriving faster than the business can schedule appointments.

The practical dividing line is not company size or revenue. It is frequency and timing. If a business is signing documents without review because getting review takes too long, or answering the same legal question differently each time it comes up, it may have outgrown buying legal help one problem at a time.

This is a way to decide, not a pitch.

Two ways businesses buy legal help

Per matter. A business has a specific need—a trademark application, a lease or a dispute—and engages a lawyer for that matter. The engagement ends when the matter ends. Most businesses start here, and many should stay here.

Ongoing counsel. A lawyer is already familiar with the company, its contracts and its structure. Questions can be raised as they arise rather than only after they become problems. This is what "outside general counsel" describes.

The difference is not the quality of the work. It is whether someone has context about the business before the question arrives.

The scope of the work, who will perform it and expected response times should be stated in the engagement agreement.

Seven signs a business may have outgrown per-matter counsel

None of these signs depends on revenue. They are about friction.

1. A contract was signed without review because review would have taken too long

This is a consequential sign because the contract may be signed without anyone assessing its terms for the business. The document is signed either way. The question is whether someone evaluates it first.

2. The business cannot find its own contracts

If someone asked for every agreement the company has signed and the response would require reconstructing the record from email, the immediate issue is records management. That can become a contract issue during diligence.

3. The same question is answered differently each time

Is a worker properly classified? Is an NDA appropriate? Are a customer’s terms acceptable? When the answer depends on who is asked and how busy that person is, the company is making legal decisions without adopting a consistent position.

4. The business hired or began operating in a new state without a legal or compliance review

The sign is not that a particular obligation has necessarily arisen. It is that the business changed where it hires or operates, and no one checked what else changed with it.

5. Someone asked for IP assignments and the company had to go looking

Founders, early employees and contractors create things. Whether the company has the necessary ownership documentation is often examined when someone is deciding whether to invest in or acquire the business.

6. Customers send their paper and the business signs it

When the other side’s terms become the default, the company’s contractual position is being set by whoever drafted those terms.

7. A major business event is approaching

A financing, sale, first enterprise customer or first employee can create a concentrated period of legal work. Waiting until the deadline may leave less time to identify and address issues.

What an ongoing legal relationship may cover

The work included in any particular relationship depends on the business’s needs and the written scope of the engagement. Depending on that scope, ongoing counsel may include:

• Reviewing contracts before signature rather than after a dispute begins
• Preparing the company’s own agreement templates instead of always starting with the other side’s paper
• Maintaining employment documents that reflect where the business operates
• Keeping IP assignment and ownership documentation current as people join and leave
• Maintaining corporate records so diligence is a retrieval exercise rather than an archaeology project
• Providing a person to contact before a decision is made rather than only afterward

When a business probably does not need ongoing counsel

The business has one contained matter

One trademark application, one lease or one demand letter may be handled through a matter-specific engagement.

The business is pre-revenue, with no employees and no customer contracts

After properly addressing its formation needs, a business with limited operations may have a relatively small legal surface area.

Legal questions are rare and can wait

If questions arise infrequently and can be handled without disrupting business decisions, per-matter counsel may still be working well.

The business already has in-house counsel

The question may be whether to add outside capacity for particular needs—not whether the business needs an ongoing legal relationship for the first time.

Ongoing counsel addresses a frequency-and-context problem. If the business does not have that problem, it may not need that solution.

Questions to ask before engaging ongoing counsel

These questions can identify a mismatch before the relationship begins:

• What is included, and what is expressly excluded? The exclusions matter as much as the included work.
• Who will perform the work? Ask who will review contracts and answer day-to-day questions.
• What response times should the business expect? Ask how urgent requests are handled.
• What happens when a matter moves beyond the agreed scope? Address the process before it happens.
• Where is the lawyer licensed, and how will questions involving other jurisdictions be handled? Ask whether the lawyer will address the issue directly, work with local counsel or refer it out.
• How are conflicts checked and addressed? Ask how the process works when ownership, affiliates, investments or counterparties change.

Accord & Shield Legal’s approach

Nadine Deeb is admitted in Arizona, California and Texas. Before private practice, she served as the sole in-house legal resource at a California technology company and supported a workforce operating across nineteen states. She also participated in diligence from inside the company, where contracts, corporate records, employment practices and compliance systems were reviewed.

Accord & Shield Legal provides outside general counsel services for businesses that need recurring legal support and company-specific context.

Learn more about outside general counsel services or request an initial consultation.

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Disclaimer

This article is general information from Accord & Shield Legal, PLLC and is not legal advice. Reading it does not create an attorney-client relationship. For guidance on your specific situation, please consult a qualified attorney.