CORPORATE FORMATION

In-House, Fractional, or Outside General Counsel: What Are You Actually Choosing Between?

By Nadine Deeb, Esq. · Published September 30, 2026 · 9 min read

When a company starts wishing someone owned its legal questions, the next step is usually described as "we need a general counsel." That phrase covers three quite different arrangements. Choosing between them is less a legal question than a question about how your business works: how much legal work there is, what kind, and who inside the company would manage it.

Three arched doorways in a navy wall: one closed, one slightly ajar with a line of light, one open onto a cream corridor.

This is general information to help you frame that choice. It is not a recommendation for any particular company.

Quick Answer

"General counsel" names a role, not an arrangement. A company might employ a lawyer in-house, arrange for a lawyer to serve it for part of their time, or engage an outside firm on an ongoing basis. These descriptions can overlap, particularly when a fractional lawyer practices through an outside firm. They differ mainly in who sits inside the business, how steady the work is, who manages whom, and how continuity is handled. The words are used loosely, so the written terms of the engagement, not the label, decide what you actually get.

Key takeaways

The three arrangements differ in who is inside the business, how steady the work is, and who does the managing.
"Fractional" and "outsourced" are labels. Ask what the hours, availability and scope are in writing.
No single lawyer covers every subject. Ask who handles what falls outside their own work.
Whichever you choose, settle where the scope ends before you sign.

What a general counsel does

A general counsel is the lawyer a business goes to first. The role usually means knowing the company's contracts, structure and obligations well enough to answer a new question without starting from zero, and deciding which questions need a specialist or another adviser.

That is a description of familiarity and triage, not of a fixed set of services. It does not mean one person handles every legal subject, and it does not mean every question can be answered the same day.

When does a company need a general counsel?

There is no revenue or headcount at which the need begins. The question is usually prompted by frequency and timing: questions arriving faster than they can be scheduled, the same question answered differently each time, or paper being signed before anyone has reviewed it. If you are deciding whether your business has reached that point, that is covered separately in Do You Need a Lawyer on Retainer? How to Decide. This post assumes you have decided ongoing help would be useful and are asking what form it should take.

The three arrangements

In-house. A lawyer is an employee of the company. The lawyer works as part of the business and reports within its management structure. The company manages the employment relationship and the cost of the position; the schedule and duties depend on the role.

Fractional. A lawyer serves the company on an ongoing basis for part of their time, often on a set schedule or a set scope. The arrangement may provide continuity with a particular attorney without creating a full-time company position. Confirm who will do the work, along with the hours, availability and scope.

Outside counsel on retainer. A law firm is engaged on an ongoing basis and is available as questions arise. The firm may have more than one attorney, which can mean continuity through one relationship and breadth through several people. A retainer can take many forms; what it covers is set by the agreement.

The last two overlap. A fractional arrangement is often delivered by an outside attorney or firm. What matters is the written terms, not which word is used to describe them.

At a glance

	In-house	Fractional	Outside counsel on retainer
Relationship	Employee of the company	Ongoing, part of the lawyer's time	Law firm engaged on an ongoing basis
Where the lawyer sits	Inside the business	Usually outside, sometimes embedded on a schedule	Outside
Who manages the work	Company management	Company contact coordinates with the lawyer; confirm responsibilities in the agreement.	Company contact coordinates with the lawyer; confirm responsibilities in the agreement.
Continuity if one person is out	Depends on the company's backup	Ask who provides backup and how a handoff works.	Ask whether backup is available and how a handoff works.
Breadth of subjects	One person's range	One person's range	One firm's range, possibly several attorneys
What you confirm in writing	Role, reporting, duties	Hours, availability, scope	Scope, who does what, response expectations

Read the table as prompts for questions, not as rankings. Each row can come out differently for the same company.

Questions that separate them

How steady is the legal workload? A steady, full-week flow of work is one situation. Work that comes in bursts around deals, hires and customer contracts is a different one.
Does the work need someone inside the company every day? Some work depends on being in the room, reviewing decisions as they are made. Other work is fine at a distance.
How many different subjects come up? One person rarely covers every subject a growing company meets. Ask who handles what falls outside the lawyer's own work, and how that handoff works.
Who would this lawyer report to, and who supervises the work? An employee reports to management. An outside engagement is governed by its agreement.
What happens if the lawyer is unavailable? A single employee or a single attorney is one person. Ask whether another attorney would be available, what that attorney would know about the work, and how a handoff would happen.
How much does the company want to manage? In-house means managing an employee. Outside means managing a relationship. Both take time from someone.
How likely is the workload to change? A business that is growing, entering a new state or preparing for a transaction may find that a structure that fits today does not fit in a year. Ask how each arrangement handles a change in scope, and how it ends.

What does a general counsel role usually cover?

Depending on the lawyer and the agreement, questions brought to ongoing counsel may concern the following subjects. This is a list of topics to ask about, not a list of services included in any engagement or offered by every firm.

Contracts. Reviewing customer and vendor paper, keeping a set of standard terms, and tracking what the company has promised.
Formation and structure. Entity questions, governance records and the paperwork around ownership.
Employment. Agreements, handbooks and compliance questions as the team grows.
Policies. Drafting the internal policies a business needs as it scales, such as an AI use policy.
Risk review. Looking at a proposed deal, a new product or a new state before the company commits.
Triage and referral. Deciding which questions the lawyer handles and which go to another adviser.

The last item matters more than it looks. Triage can be an important part of the role.

Common misunderstandings

The label fixes the terms. It does not. Two "fractional" arrangements can differ in hours, response times and scope. Read the agreement.
Part-time means on call. Availability is a term to be agreed and written down, not something the word implies.
A general counsel covers every subject. One lawyer or one firm has boundaries. Ask where they are.
Bringing someone in hands over the decisions. Counsel advises; the business decides.
The first arrangement is permanent. An arrangement can be revisited as the business changes. Ask how the agreement handles a change in scope and how it ends.

How to compare proposals

Whichever route you take, ask each candidate or firm to put the following in writing:

What work is included, stated specifically enough that a new question can be sorted into or out of it.
What is excluded, and what happens then. Whether excluded work is referred out, handled by other counsel, or quoted separately, and who arranges it.
Availability and response expectations. Hours, how to reach the lawyer, and what a typical turnaround looks like.
Who does the work, and how work involving another attorney is handled.
Continuity. What happens if the assigned lawyer is unavailable.
How fees are structured. Ask each firm or candidate to explain it. This post does not quote prices or compare fee arrangements; see How Startup Legal Fees Work: Hourly vs. Flat Fee, Retainers, and Why Scope Matters More Than the Rate.
How the arrangement ends, and what you receive when it does.

Where engagements usually draw their lines

Ongoing engagements have boundaries, and those boundaries differ between practices. Ask about these specifically:

Litigation. Whether disputes sit inside the engagement, are handled separately, or are referred out, and what happens if a disagreement requires separate dispute-resolution or litigation work.
Tax advice. Entity and transaction decisions can raise tax questions. Ask whether those sit inside the engagement or go to a tax adviser.
Securities work. Fundraising may involve transaction documents, analysis of applicable securities requirements, and filings. Ask which tasks, if any, the engagement covers and who handles the rest.
Trademark and copyright filings. Whether registrations are handled by the same attorney doing the commercial work, by other counsel, or referred out.

Before the engagement begins, ask where those lines fall and confirm them in the agreement. For what the first months look like once you have chosen, see What Actually Happens in Your First 90 Days With Outside General Counsel.

What stays with the business

Whichever arrangement you choose, some things remain the company's: deciding what the business wants to do, providing complete and accurate information, and acting on advice. Counsel can only work with what they are given.

Questions to bring to a first conversation

What are the three legal questions that came up most in the past year?
Which contracts do we sign most often, and who reviews them today?
Which states do we operate in, hire in or sell into?
Is a transaction, a raise or a large customer deal on the horizon?
Who in the company would be the day-to-day contact?

Frequently Asked Questions

What is a fractional general counsel?

A lawyer who serves a company on an ongoing basis for part of their time, without necessarily hiring a company employee. The term is used for many structures, so the hours, availability and scope are whatever the agreement says.

Is fractional general counsel the same as outsourced general counsel?

The terms are often used interchangeably. Neither has a fixed meaning, so look at the written scope and availability instead of the label.

Do we need an in-house lawyer if we already have outside counsel?

That depends on how steady the work is and whether it needs someone inside the business every day. Ask what would change, in practice, if a lawyer were embedded, and who the company would manage.

Will a general counsel handle litigation?

Engagements differ. Ask whether disputes are inside the engagement, handled separately or referred out, and what happens if a disagreement requires separate dispute-resolution or litigation work.

Can one lawyer cover every legal subject a growing company needs?

Rarely. Ask who handles the subjects that sit outside the lawyer's own work, and how that handoff works.

How do we know which arrangement fits?

Start with how steady the work is, whether it needs someone inside the company, and how much the company wants to manage. Then compare proposals on the points above, in writing.

If you want to talk it through

Accord & Shield Legal serves as ongoing outside general counsel for businesses in Arizona, California, and Texas. If you are weighing these options, you may schedule a free 15-minute consultation to briefly describe your question and discuss whether the firm may be able to help. Please provide only a short, nonconfidential description when scheduling; do not send documents or confidential information before the firm completes a conflicts check and asks for them.

*This article is general information from Accord & Shield Legal 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.*