5 Tips for Setting Up Your First In-House Legal Department

As your business expands, navigating complex legal issues often calls for establishing an in-house legal department. From handling contracts to regulatory compliance, having a dedicated legal counsel on your team can streamline operations and protect your business from risks. Here’s a practical, step-by-step guide to help you set up your first in-house legal team or general counsel function.

1. Assess Your Business's Legal Needs

To ensure you’re hiring the right legal counsel, start by assessing your business’s specific legal needs. Are you facing frequent contract negotiations, complex compliance requirements, or intellectual property issues? Knowing these will help determine whether you need a full-time general counsel, a fractional counsel, or a head of department for a broader legal team. If your needs span multiple legal areas, an experienced generalist can be a great fit for the initial hire.

For more on identifying the right legal skills for your business, check out our post: A Guide for Start-Ups Looking to Make Their First In-House Counsel Hire.

2. Define the Scope of Your Legal Department

Establish clear boundaries on what tasks your in-house counsel will manage versus those that might still need external legal experts. While certain recurring issues—like compliance and contract review—might be ideal for in-house counsel, unique or complex legal matters, such as litigation, may still benefit from outside expertise. By defining these responsibilities early, you can structure your team accordingly—whether it’s a general counsel to oversee a broad array of tasks or a fractional counsel to address immediate needs without the commitment of a full-time hire.

If you’re unsure about full-time vs. fractional counsel, our post on The Rise of Fractional General Counsel may provide useful insights.

3. Set Up Departmental Goals and Structure

To build an effective in-house legal department, outline your goals and decide on a structure that fits your needs. For companies hiring their first general counsel, this might mean bringing on one legal head of department to oversee both daily tasks and strategic initiatives. Alternatively, a more complex structure could involve specialised roles to handle distinct legal areas like employment, IP, or compliance. Aim to structure your department with future growth in mind to ensure flexibility as your business scales.

4. Determine Your Budget and Resources

Creating an in-house legal department is an investment, so it’s essential to budget accurately. This should cover salaries for legal counsel, department heads, or general counsel, as well as costs related to software, ongoing training, and any external legal services. Benchmarking the cost of in-house legal professionals can be challenging, especially for first-time hires, so working with a recruitment specialist can help you better understand salary expectations and help you find the right legal counsel fit.

5. Develop Processes and Integrate Your Legal Team

A successful in-house legal department works best when seamlessly integrated into your business operations. Develop processes for reviewing contracts, handling compliance issues, and managing other recurring legal needs. For example, include your legal counsel or head of department early in new projects so that legal risks are flagged and managed proactively. This alignment between the legal team and other departments will foster more effective and efficient collaboration.

How can we help?

Setting up an in-house legal department can feel overwhelming, but there’s no need to tackle it on your own. 

At JMC Legal Recruitment, we bring extensive expertise in building effective, high-performing in-house legal teams, whether you're looking for a dedicated General Counsel, a versatile legal head, or a flexible fractional counsel solution. We also offer deep insights into salary benchmarking for start-up General Counsels, helping you optimise your budget by ensuring your compensation aligns with industry standards and meets your business's unique needs.

With our unrivalled expertise and expansive legal network, we’ll connect you with top-tier legal talent to take your business to the next level.

Sam@jmc-legal.com/ 0203 865 2113