When a mid-sized company needs to resolve something legal, it almost always faces the same dilemma: call a law firm, or manage without specialised help until there is simply no other option. Two choices, and neither is fully satisfactory. The first is expensive for day-to-day matters and always arrives from the outside. The second is simply postponing the problem.
What almost no mid-sized company considers is that a third way exists, between the two, with its own name for decades in the English-speaking world and still little known in Spain: the External General Counsel.
It’s not that the option doesn’t exist. It’s that it isn’t on the menu most business owners have in front of them when they think about “legal advice”. And that has real consequences.
The usual menu, and why it falls short
The typical reasoning of a mid-sized business owner goes something like this: if my company turns over eight, fifteen or twenty-five million, I can’t afford an in-house legal department with lawyers on payroll, that’s for large corporations. So the default alternative is to call an external law firm when a problem comes up, and hope that’s enough.
That reasoning isn’t unreasonable. The flaw is in the hidden premise: that the only alternative to “a full in-house legal department” is “an external firm billing by the hour”. As if there were nothing in between.
There is. I’ve spent twenty-five years watching how legal advice works from both sides of the table (as a law firm lawyer, and as company secretary to the boards of Spanish subsidiaries of international groups), and that experience has taught me that the gap between those two options is exactly where most of a mid-sized company’s real needs live.
What an External General Counsel actually is
An External General Counsel isn’t a lawyer you call when a problem arises. It’s a senior, permanent legal counterpart who knows your company with the same depth a CFO knows the accounts, but who isn’t on your payroll.
The difference with the traditional law firm model isn’t one of technical quality (there are excellent firms providing hourly service); it’s one of the nature of the relationship. A law firm responds to what you bring it. An External General Counsel anticipates what you’re going to need to decide, because they’ve invested time in understanding the business from the inside out: its revenue model, its shareholder tensions, the contracts that haven’t been reviewed in years, the real power dynamics inside the board.
That understanding isn’t acquired in a one-hour consultation. It’s acquired through continuity, through regular access to the operation, through accumulated memory of past decisions. It is, in essence, the same function performed by an in-house General Counsel at a large corporation, only delivered externally, for companies that have neither the volume nor the budget to justify a full-time hire.
Why the model has worked abroad for years
In the United States and the United Kingdom, the “fractional general counsel” or “outsourced general counsel” has been developing for more than a decade, with an already mature market of specialised providers. The reasoning is purely economic: hiring a full-time General Counsel in those markets easily runs to several hundred thousand dollars a year in salary alone. For a mid-revenue company, that figure doesn’t pay off against the real volume of legal work the business actually generates.
In Spain, the legal services market has been slower to adopt this figure, partly because the traditional law firm model (large or small, but always billing by matter or by hour) has for decades been the only visible structure. It isn’t that the External General Counsel model doesn’t work here; it’s that it has rarely been offered under that name, with that explicit logic.
The cost of not knowing the option exists
Here is the real problem: when an option is invisible, in practice it doesn’t exist for the person making the decision.
When a mid-sized company doesn’t know it can have a senior legal counterpart without taking on the cost of an in-house hire, it simply doesn’t consider it. And the cost of that invisibility isn’t abstract: it shows up as strategic decisions made without timely legal input, contracts signed without the review they deserve, boards operating without anyone anticipating what will need to be decided three meetings from now, and, more often than is acknowledged, external advisers billing to fix after the fact what continuous support could have prevented.
None of this is a reproach to companies that operate this way. It is simply the logical consequence of a market that hasn’t done a good job of communicating that there’s another way to structure legal advice.
Who this model fits
Not every company. The External General Counsel makes concrete sense for specific profiles:
- Family businesses in the process of professionalising, where a formal board is starting to exist but there is still no in-house legal structure.
- Spanish subsidiaries of international groups, which need a local counterpart able to speak with headquarters in its own corporate language, literally and culturally.
- Growth-stage companies after a funding round, where investors are starting to demand formal governance the company doesn’t yet have in place.
And, more generally, any company that recognises its volume of decisions with a legal component has outgrown what an hourly-billed firm can properly support, but doesn’t yet justify a full-time in-house hire.
The kind of profile this role requires
Not every lawyer can do a good job as an External General Counsel, and it’s worth explaining why, because it isn’t a question of credentials but of the type of experience involved.
First, it takes having been inside a company or on a board, not just having advised one from the outside. The perspective changes completely once you’ve lived an organisation’s internal logic: how decisions are actually prepared, what pressures coexist in a boardroom, what gets said in the meeting and what actually gets decided in the corridor afterwards.
It also takes experience across more than one jurisdiction when the client has an international component, because much of this role’s value lies in knowing how to translate, in both directions, between the local legal culture and that of the foreign parent company.
And it takes, perhaps above all, some grounding in how people and organisations actually work, not only in how the law works. Business decisions are rarely purely legal: they carry a human component, a relational component, a component of accumulated history between the parties. A General Counsel who only knows corporate law, without the ability to read those layers, falls short of what the role actually demands.
I’ve built my own profile around those three pillars: twenty-five years serving as company secretary to the boards of international companies, dual admission in Madrid and the State of New York, and training in psychology applied to understanding the dynamics behind every business decision. It isn’t the only possible path to this role, but it’s the one that has allowed me to practise it with my own judgment.
A role that is built over time, not hired overnight
It’s worth adding something else, because it matters to understand it properly: an External General Counsel doesn’t become that on day one. The relationship starts like any professional engagement, and deepens over time, as the counterpart accumulates the knowledge of the business that makes their support different from a traditional firm’s. That’s why this model works best when approached as a long-term relationship, not a one-off service.
In short
The question a mid-sized company should ask itself isn’t “do I need a law firm, or can I manage on my own?”. It’s a different question: “do I already have the volume of legal and strategic decisions that would justify a permanent senior counterpart, even if not on payroll?”. For many companies operating today without ever asking themselves that, the answer, if they stop to think about it, is yes.
You don’t need a full legal department to have serious legal support. You just need to know the option exists.
Pablo Gómez-Acebo Calonje is a lawyer (Madrid and New York), a psychology graduate, and the founder of Estudio Jurídico Alta Mediación. He provides External General Counsel services to mid-sized companies and Spanish subsidiaries of international groups.