Legal process outsourcing – The advantages and opportunities of external legal consulting

by Dr. Anne Mushardt and Kathrin Weinbeck, Rödl & Partner Nuremberg and Regensburg
 

In the era of economic scandals which attract intense media interest, the establishment of an internal legal department in the company continues to be popular. In-house consulting offers many advantages, but due to the increasing density of regulations across different sectors it soon reaches its limits. The use of external legal consultants through legal process outsourcing can give many companies a decisive market advantage.

 

The advantages of the interaction of internal and external legal consulting are clear to see. While the company lawyer is well familiar with the internal company structures and procedures, the external lawyer can process legal questions with the necessary wider perspective. The legal department of the company functions like a filter where the company lawyers decide in consultation with the company management whether they can efficiently process the legal issues themselves due to their extensive legal experience or whether the issue should be delegated to a corresponding specialist.

 

The long-term close co-operation of the legal department with the external legal consultant ensures an efficient clarification of the facts and an efficient workflow. As a result, the company on the one hand saves personnel costs and resources and on the other hand tailor-made solutions are found which take the individual requirements of the company into account. The long-term co operation leads to the external specialist becoming ever more familiar with the special way of thinking and structure of the company. The symbiosis of this holistic approach of the company lawyers and the special expertise of the external specialists achieves high quality results.
 
A further aspect is relevant for the company. The outsourcing of the legal consulting also outsources the liability risk with legal questions which are difficult to assess. For example, a managing director is regularly obliged within the scope of his professional duty to identify (or have identified) legal risks. In this way he realises a sound basis for making decisions and protects himself against being made liable for a legal situation.
 

Examples of legal process outsourcing

There are many varied questions which can be outsourced to an external legal consultant. In the individual case it always comes down to the specific structure of the company, the legal department and therefore requirements of the client.

 

The following are frequently outsourced:
  • The examination and improvement of order conditions or contracts (delivery contracts, employment contracts, rental agreements)
  • Questions relating to company law
  • Corporate housekeeping (fine-tuning of statutes, preparation of general or shareholder meetings)
  • M&A transactions
  • Industrial property rights, data protection law, distribution law  and litigation
  • Subjects which for reasons of confidentiality should not be processed by the internal legal department (e.g. employment contracts for managing directors). 
     

Increasingly the legal processing of international legal issues is managed externally. The consultants called in here can draw on their existing network of experts around the world and therefore offer the company extremely effective support.
 

Conclusion

The scope of the outsourced legal consulting should always be determined in consultation with both parties and depending on the requirements includes the legal consulting for the case in question, the project management and the elaboration of contracts, expert reports and statements, etc.. Special attention should be given to close co-ordination between the in-house lawyer and the external service provider in order to arrive at the ideal solution.

Please note:

  • Complicated legal issues can be efficiently processed by an external service provider.
  • The cooperation between the internal legal department and the external consultant should be encouraged.
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Dr. Anne Mushardt

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+49 (911) 91 93 – 16 99

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