What Should You Know About Fractional General Counsels?

7 min read

Here’s what you need to know about this innovative new service model.

In the legal industry, there are typically two job paths: Lawyers can work for a firm that sells their services to clients, or they can work in-house as a general counsel (GC). Now, though, a third option is arising: The fractional GC. A fractional GC arrangement is a flexible and potentially lucrative way to capitalize on new markets and create new revenue streams for your law firm. 

So, what’s a fractional GC, and how can you get started with this service offering? Here’s what you need to know. 

What is a Fractional General Counsel (GC)? 

Large companies have a high volume of day-to-day legal work that must get done; that’s why they employ their own in-house GC and legal staff. Having that in-house legal expertise enables enterprise-level companies to quickly and thoroughly ensure regulatory compliance, draft contracts, and conduct legal review.

For many small and mid-sized companies, though, the small and unpredictable level of legal work required doesn’t justify the expense of an in-house GC. These businesses will often enter contracts without legal review, hire outside attorneys for significant legal events, or simply hope for the best. 

The fractional GC is an affordable solution for small and mid-sized companies that need legal services for day-to-day business but can’t afford an in-house attorney. A fractional GC is an outside contractor who works with clients part-time, providing legal services for typically 10 to 40 hours (about 1 and a half days) per month. A fractional GC will generally have multiple clients at the same time. In essence, a fractional GC is a freelance legal professional who works with clients on an as-needed basis. 

What Kind of Work Do Fractional GCs Do? 

Fractional GCs are all about helping scaleup and high-growth companies build their internal legal function, most often for the very first time. As you might expect, they perform many of the same tasks as in-house GCs, from contract reviews to regulatory compliance, to employment matters, and beyond. According to fractional GC marketplace Goodlawyer, fractional GCs form a long-term relationship with the client in question and are integrated into the client’s operations. 

“There’s a reason that every large enterprise builds an in-house legal team — to ensure their legal work is dealt with quickly, cost-effectively, and in tune with the overarching business objectives of the organization. That last piece, deeply understanding the business, is perhaps the greatest benefit of having an in-house legal function as compared to an external legal provider who doesn’t fully understand the risk tolerance and objectives of the business,” says Goodlawyer’s co-founder and CEO, Brett Colvin. 

Goodlawyer’s FCs become integral members of the client’s executive team, saving them time and money, but also adding a true business lens to the legal problems facing their business. In most cases, these experienced in-house counsels get set up with a company email address, a Slack account or whichever way works best for your team. 

Patrick Veilleux, who used to be the Director of Legal at Shopify following his time at Bay Street and the Federal Government, missed the excitement of working with earlier stage scaleups. So, at the beginning of 2023 he left Shopify after 5 successful years, opting to join Goodlawyer’s rank. He now has four FGC engagements with scaleups from across Canada, including Helcim.  

In Pat’s words, “Being a Fractional Counsel enables me to provide sophisticated scaleup clients with both legal and strategic insights,” says Veilleux. “The opportunity to be at the table during critical planning sessions empowers me to identify legal risks and opportunities proactively and help them chart the best path forward. With my years spent at Shopify, it’s been rewarding to leverage that experience to help support some of the most exciting and high-growth technology businesses in the country.”  

How are Fractional GCs Different from Traditional GCs?

Fractional GCs are similar to in-house GCs in a variety of ways. Both fractional and in-house GCs are trained and experienced legal experts with knowledge of business law. Both fractional and in-house GCs work with the client’s team to advance the client’s interests. And both fractional and in-house GCs develop long-term relationships with the clients they serve. 

Where they differ, though, is that a fractional GC is an outside contractor instead of an employee. Fractional GCs work with multiple clients at a time, providing each client with services on a flexible part-time basis. Fractional GCs are called upon when they’re needed, rather than working 40 hours per week for a single client.  

As an independent contractor, a fractional GC is free to work from anywhere, and is responsible for their own supplies. 

Benefits & Risks of Fractional GC Offerings

Creating a fractional GC offering could be an effective way to land new clients, but it also presents some risks. 

The most significant benefit of a fractional GC offering is that it opens up a new, untapped market for your firm: Startups. There’s no shortage of startups around the world who need legal services but don’t have the budget or workload to justify hiring a general counsel or a firm; offering fractional GC services is an effective way to capitalize on this market demand with minimal risk. 

Fractional GC offerings can also help you de-risk your law firm’s operations by growing and diversifying your client base. By enabling your team to work with more clients across more industries, you immunize your firm against market downturns and deadbeat clients.

Plus, a fractional GC offering creates value for your clients by giving them a solution to their problems. When clients have more options for doing business with you, it makes them more likely to sign on your firm to represent them. 

However, perhaps the most significant risk of creating a fractional GC offering is a lack of predictable revenue. Fractional GCs are, by definition, hired on demand to handle legal needs as they arise. Instead of locking a client into a contract for a certain number of hours per month, your fractional GCs could end up working unpredictable hours each month. Perhaps one week your fractional GC services bill 10 hours, and the next week they bill 100; the nature of the fractional GC offering means demand is unpredictable. If you want to capitalize on the benefits of fractional GCs, you’ll need to go after a diverse client base in order to minimize your risks. Signing one or two clients for a fractional GC offering won’t do much for your revenue; signing 10, on the other hand, will move the needle. 

We asked our friends over at Goodlawyer how they de-risk their fractional GC offering; they replied that Goodlawyer clients sign a contract agreeing to a set number of hours per month, with unused hours rolling over to the next month. The fractional GC receives the same pay every month, unless there’s an overage – in which case they’re paid more. This arrangement enables Goodlawyer to sell fractional GC services in a way that provides predictable revenue while meeting clients’ need for flexibility. 

You can de-risk your fractional GC offering by requiring a contractually mandated minimum number of hours from all of your clients. This approach, the Goodlawyer method, combines the advantages of flexibility and predictable revenue. 

Getting Started with a Fractional GC Offering 

To start with a fractional GC offering, you’ll want to first find an experienced lawyer on your team who wants to take on an exciting new initiative – ideally someone with previous in-house experience who has the time to devote to serving as a fractional GC for your clients. If you can’t find someone on your team, you could always bring in an outside contractor to serve as your first fractional GC. 

Next, you’ll want to reach out to some of your existing clients to see if having their own dedicated in-house GC is something they’re thinking about. If your clients are growing to the point where they need in-house legal services, offering them a fractional GC is a great way to retain them instead of losing them to an in-house option. Try to identify your fastest-growing mid-sized clients who may end up hiring in-house in the next year; then, reach out to them and see if a fractional GC is something they might benefit from. Advertise it as a pilot project that they get to be a part in shaping. Pitch them on the benefits of a fractional GC – a higher-touch relationship without exorbitant costs. Then, see if they’re interested.

Alternatively, you can utilize a platform like Goodlawyer. They’ll manage the engagement from start to finish, taking care of finding ideal clients and handling the administration and billing, leaving the fractional GC to focus on what they’re best at – being a lawyer. 

Fractional GC arrangements are relatively new, but they’re taking off. A fractional GC is an innovative way for small and mid-sized clients to access affordable, on-demand legal services without taking on the expense of an in-house lawyer. Try offering a fractional GC service and see how your clients react – you could end up creating a whole new revenue stream for your firm. 

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