As we continue to navigate the unchartered and somewhat tumultuous roadmap that is 2023, there are certain foundations that are solidifying in the world of business and recruitment: flexibility, diversification and balance.
Whilst 2022 saw mass resignations, rehiring and a “recruitment renaissance” for many, this year has seen lay-offs, economic uncertainty and market unpredictability. This slowdown, however, has allowed for a point of reflection on the last three years on what is important to the working individual. For those who are lucky enough to define their working boundaries are in fact re-defining what is important to them, many are rejecting the “hamster wheel” for a sustainable, balanced and meaningful working partnership.
With tighter budgets, a new preference of working and an unprecedented market, top-level executives and experts are moving into the world of fractions—the fractional way of working, and GCs are no exception.
From Business A to B: What is a Fractional GC?
In short, a fractional General Counsel is an arrangement. There is an increase of legal professionals at GC level entering the interim market due to, in part, the flexibility this can provide. The fractional GC, however, is set out differently from the typically project lead or parental/sickness cover interim roles; the niche being the market it serves. SMEs and start-ups can hit a point in their growth where employing external counsel is inevitable, either to fix a problem that could have been prevented or to assist with the continued growth whilst mitigating risk. This does, however, come at a cost and, continuing with the theme of 2023, budgets are tight.
Enter the Fractional GC. This arrangement employs an individual to effectively act as an in-house counsel, either on a retained fee or daily/weekly rate basis and is structured around the needs of the company. The GC might have experience getting a business to and through an IPO, seeing a start-up through each series of funding or seeing a company through litigious matters and are employed to accomplish defined goals or objectives. The length can be determined by the business but is typically on a part-time or flexible arrangement—the flexibility allows businesses to determine the arrangement. Of course, this works both ways; the GC can work on multiple projects and build a portfolio of clients.
Pros and Cons?
To businesses, in particular SMEs and start-ups, the pros are cost centric. The ability to determine the fees based on the specific need of the business is efficient and effective without having to forfeit on quality. Is it a riskier option than going to a law firm? When hiring a fractional GC, the business can note the experience of the professional; if the CEO needs a GC with pre-IPO experience, this can be found and utilised specifically. Hiring on this basis can mitigate some risk as the GC would have experience in getting a business ready to IPO and know what to look out for rather than learning on the job.
This can be taken further on an industry level. This arrangement allows the CEO to hire a GC with specific industry knowledge, enabling a deeper and more meaningful arrangement in terms of working knowledge and experience driven advice.
Conversely, the shorter working lifespan of a fractional GC could restrict the GC from delving deeper into the business on a professional level. For those that like to see a deal from embryonic stages through to completion or to “join the journey” rather than be a “fraction” of it, then this way of working might not satisfy.
It is clear that there is a need for the fractional arrangement from both the business and employee level. With the continued rise of the gig economy since the 2008 financial crisis and COVID, there might be a new utilitarian arrival on the block!