The rise of the fractional General Counsel: an interview with Al Zucker

As the world of business becomes increasingly complex and resourcing challenges increase alongside this, the chance to hire talent on a fractional basis has become more common. As part of our General Counsel interview series we spoke to Al Zucker, experienced corporate and commercial lawyer who is now a fractional GC. He now specialises working with startups and other companies in the innovation economy as a fractional General Counsel.

What is a fractional General Counsel and how have you worked in this space?

At its simplest, a fractional GC is a General Counsel or other senior legal executive who does not work for only one company. Fractional GC’s split their time between a portfolio of different companies, giving advice to each. It is a way to access the knowledge and experience of a senior lawyer with legal training, without having the cost of a full-time General Counsel.

I have worked with VC and PE backed businesses as they grow and often from a relatively early stage in the development of their legal functions. I also regularly work with businesses which have a strong consumer, retail or industrial focus as I have spent a significant amount of time working in-house in these industries. As a former corporate transaction’s specialist, I can help founders fundraise or exit and regularly assist management in the preparatory stages of those projects.

What does a fractional General Counsel do?

It completely depends on the needs of the client and the expertise of the lawyer. Generally, fractional GC’s have a corporate/commercial background and have spent a lot of time in in-house environments and so have a generalist skillset. This means they are experienced at providing strategic board level advice and reviewing a wide range of commercial contracts.

Fractional GC’s often have a good understanding of how to build and maintain a legal function and manage risk in a business. Many are also experts in legal operations and have, set-up and managed legal and other back-office functions (such as HR or product compliance). As such, they understand what clients might need to set up those functions for success and how to configure them for scale.

Often fractional General Counsel are working for early-stage or growth-stage businesses, in which case they are doing a little bit of everything and cannot be ‘too important to do the donkey work’. They might be providing high-stakes board advice one minute and looking at NDA’s the next. This is useful for clients as they can use a fractional GC to meet the business’s needs at any given point in time.

My work as a fractional GC has been varied. I have set up legal functions from scratch for scale-up, which has included setting up processes, systems and hiring junior team members. For example, I worked with the tech and the supply chain teams of a company to automate contracting in the supply chain using a proprietary tool. This meant that the company went from purchasing 0% of its inventory on contractual terms, to purchasing 100% of its inventory on such terms over a 4-month period once the tool was launched.

What should you not expect from a fractional GC?

A fractional GC is not a tool to eliminate legal expenses entirely and is not a replacement for full-time staff or for a law firm. While a skilled fractional GC can help find the best legal advice at optimal costs and oversee files to prevent cost overruns, they are not a substitute for law firm advice on complex, high-value, or high-stakes matters. Good fractional GC’s will be up-front with their clients about what they can and cannot handle for their clients.

Many fractional General Counsel do not operate through regulated law firms and so may not offer a full range of legal services, including transfers of land or conduct of litigation. It is always best to clarify with your fractional GC what limitations there are on the services they provide.

For example, I can advise clients on areas of commercial and corporate law, particularly with regard to commercial contracting in supply chains, board level advice, governance, routine HR issues, etc.  I will also partner with law firms on large strategic transactions such as fundraising or exits (where I am very experienced) but I cannot offer niche or specialist advice, such as financial services regulation. In these instances, I can act as a professional procurement expert, working with clients to identify the right advisor and ensure there are no unexpected cost overruns.

Why is it emerging? 

It’s no secret that the big US law firms have driven up salaries in the UK market dramatically, with many of the larger UK firms being forced to follow suit to retain top legal talent. The result is that many clients are being priced out of obtaining legal advice from larger firms, as those firms increasingly focus on high fee ‘megadeals’. At the same time, many early-stage companies have quite complex legal needs, but do not have large budgets to spend hiring large legal firms. These clients need to find cost-effective solutions from skilled professionals and many are turning to fractional GC’s to fill the gap as law firm rates become prohibitive.

Finally, the legal market is changing.  Around a quarter of legal professionals are now working in-house [AB1] and in-house departments are increasingly becoming a partner for growth inside companies. Law firms traditionally do not assist their clients in setting up their legal functions for scale or success (it may not be in their interests to do so). Therefore, retaining professionals with deep experience of building legal functions is increasingly valuable to companies that want to get the best value out of their legal budgets

What are the benefits to interim professionals entering the fractional GC market? 

The fractional GC model also has benefits for the individual. A fractional GC is often able to retain a lot more control over their life than they would as the General Counsel of a large business or as a senior lawyer in a large law firm. For working mums, dads with young children (which is me at the moment), or people who want to live a different lifestyle (e.g. as a digital nomad) the fractional model offers a great trade-off between interesting work, independence and income. It’s no wonder that as millennials increasingly become senior enough to hold GC positions, they are looking to this model as a potential solution.

Being a fractional GC also offers the benefit of breadth – you might have different clients in different industries, which means that as a fractional GC you gain a lot of different experiences. I have worked with a variety of tech, consumer and industrial companies in my time, and whilst there are issues that are common to each, some problems are very different. Fractional GC’s will also get very close to a number of businesses, which enables them to form views on what best practices look like.

If you are interested in a fractional role or are looking to hire a fractional position, please get in touch with Penny Parker to find out more.