Top 10 things in-house counsel for small business must do in their first 90 days

If you have ever moved from a law firm to an in-house counsel position, you know the transition is rife with challenges. The same is true even when moving from one in-house position to another. While many lawyers move to established in-house legal departments, a growing number are moving to small businesses where they are the first — and likely only — lawyers.  

Such a transition provides an even greater number of challenges and, when faced with such a change, the in-house lawyer must hit the ground running. Here are 10 things you should do during your first 90 days at a small business.

Meet your in-house team

It is critical that new in-house counsel meet the colleagues they will interact with daily. This is even more important when the business is small, where the relationships will be more intense. You should set up meetings with:

• The business leadership: the CEO, CFO, heads of different business units, and the heads of any staff groups such as HR and information technology. If appropriate, meet with the members of the board of directors as well.
• In addition to introducing yourself, ask them about their backgrounds and how they came to the company, and what opportunities and challenges they see in their particular areas. Most importantly, you need to find out how you, as an in-house counsel, can best support them — and what expectations they have for how you will deliver legal services to them, their teams, and the company as a whole.  
• Ask how they would like you to communicate with them about legal matters and how frequently they would like updates. Let them know that you will be reaching out to them regularly to help set priorities.
• Ask questions to learn about the company culture and how best to fit it.

Learn the business

You won’t be an effective lawyer for your company if you do not understand the business model and how the company makes money. Do the following:

• Get copies of the company’s strategic plans and goals. If there is an investor pitch deck, that is generally very informative.
• Create a list of key customers, vendors, and competitors.
• Ask for demos of the company’s products and services to learn what do customers see.
• Sit down with the CFO and get a tutorial on the company’s business model and how the money flows.

Read the contracts and learn the contracting process

The lifeblood of any company is its contracts. How the company makes and spends money is set out in the top 10 or 20 customer and vendor agreements. Get copies of those agreements and read them. In addition, do the following:

• Get copies of any templates the company uses and determine if they need updating.  
• If there are no templates or you see that templates are missing for key recurring transactions, make a plan to create them.
• Figure out the contracting process: from A to Z, how do contracts get put in place? Odds are good there are many opportunities for improvement here.

Determine what resources you have

Since you’re working for a small business, it is likely that you will have limited legal resources — especially if you are the first or only lawyer. Hopefully, you thought of this question before accepting the job and negotiated for a reasonable budget and technology resources. Regardless, you need to understand:

• What is my budget for outside counsel and technology?
• What is my budget to hire people? On what timeline?
• Do I have access to administrative support, technical support, or operations support?
• What technology do I have access to? This would include any e-billing system, contract management system, e-signature tool, research resources like Practical Law, basic Office suite, and other technology. Note what you have and what you need too. Take advantage of your first 90 days to understand your resources.

What legal issues does your small business have?

You were hired to handle legal matters for the company. Be proactive and inventory all of the legal matters facing the company right now:

• Litigation/disputes – in court, on the horizon, etc.
• Contract negotiations – ranked in order of value to the company
• Employee disputes/employment issues
• Intellectual property/trade secrets
• Compliance issues – including training
• Data privacy – review privacy policies, both internal and externally facing
• Other – depending on the business your company is in

Once you have your inventory, work with the business leaders to prioritize so you are focused on the things the business believes to be most important.

Partner with HR

Contracts are important, but a close second to that is issues with employees. For most small businesses, the biggest source of litigation and problems comes from a lack of mature HR processes and policies. Seek out the head of HR and create a partnership to tackle issues together. Focus on:

• Employee policies and employee handbook
  • Business ethics policy
  • Sexual harassment policy
  • Email policy
  • Social media policy
  • Work-from-home policy
• Employee agreements
  • Non-disclosure
  • Non-solicitation
  • Non-competition
  • Invention disclosure and assignment
  • Offer letter templates
• Process to investigate and handle claims by employees

If there is no HR function, it likely means that you, as the lawyer, are expected to serve that role to some extent. Get clarity on this and, if true, what is expected and what resources you have access to for HR issues.

Review corporate governance

Many small businesses suffer from inadequate attention to the niceties of corporate governance. While day to day this is rarely an issue, it can be a major problem in the event of litigation or a potential sale of the company. Focus on ensuring the following are in place — or updated — and kept current going forward:

• Articles of incorporation and bylaws — or, if an LLC, the operating agreement
• Cap table
• Minutes of board of directors meetings. Is there a minute book?
• Board resolutions
• Process for necessary annual filings
• Registered agent
• Understanding loans to officers/employees
• Stock options or other equity-like agreements
• Director indemnity agreements
• Intercompany agreements

Build your network

It is difficult being a member of a small legal department or a legal department of one. It is important that you build a network of contacts who can help you. In addition to people you already know, consider this:

• Join the local chapter of the ACC and get access to ACC resources.
• Join groups on LinkedIn and use the members as sounding boards or sources of templates, tools, and recommendations. Follow key influencers posting on in-house counsel matters.
• Form your own group of in-house lawyers working for small businesses and share resources as appropriate.
• Connect with outside counsel. Start by reviewing any outside counsel used by the company and determine whether they are the right fit or not. If not, find outside counsel you think fits the bill and take advantage of their willingness to work with you on rates and access to resources and templates.

Adjust your attitude

This is especially true if coming from a law firm to in-house — or moving from a large legal department to a solo position — at a small business. You simply will not have access to the resources, budget, time, and other “luxuries” available to you at your prior job:

• Get comfortable flying by the seat of your pants. You will have little to no time for research; you’ll need to answer the question then and there.
• Be practical with your advice.
• Lose the need for perfection. Good enough is good enough.
• Be willing to accept more risk than you are comfortable with.
• Deliver legal advice and services as part of a team dedicated to doing what is best for the company — the business answer may not fit neatly with the legal answer. Remember, while legal is part of the team, there will be compromises to achieve business goals.

Create in-house counsel KPIs

The business may not be asking you for any benchmarking or key performance indicators showing the value you are generating; they will. During the first 90 days, take time to create your first KPIs.  Consider starting with these:

• Legal spending – actual versus budget and average hourly rate
• Value of work brought in-house/not sent outside
• Number of contracts generated by value and type
• Templates and processes created
• Litigation/disputes resolved and estimated cost savings

There are, of course, other things to consider, but the key is to start to lay down baselines so you can measure progress over time. Focus on KPIs that tend to demonstrate the value generated by the legal department — and justify the investment they made in hiring you.

The first 90 days at a small business is an incredibly exciting time for new in-house counsel. You likely have a blank canvas that you can paint as you see fit; take advantage of that. Also take advantage of the honeymoon period to set expectations — yours and theirs. Most importantly, get the resources and processes you need put in place as soon as possible. If you have access to Practical Law, you have a vast library of templates, forms, checklists, tool kits, research, and other crucial resources available at the click of a button.