Appropriate # of Legal Counsel?

July 29, 2022

by a searcher from Indiana University, Bloomington/Indianapolis - Kelley School of Business in Bloomington, IN, USA

We've been interviewing candidates for our in house legal counsel role and have come up with several promising candidates. We believe three show the most potential and have complimentary skills. One of them has a background in congress working with the ADA (we are auto dealership focused), another as an M&A lawyer with track record of closing 2-3 transactions a week, and the third in the marines doing legal due diligence with aerospace & defense acquisitions + RE transactions.

We could potentially take all three. Is it recommended to do so? Or will this present too many voices at the table to close? How large is the typical Search Fund legal team for deals between $8m EV - $20m EV?

Reply by an admin
from Stanford University in Honolulu, HI, USA

^redacted‌ - Unless you're spending millions upon millions in legal fees, I'd suggest starting with 1 lead attorney and growing as needed. Where do you expect to have the greatest legal spend and consumption of executive and employee time with your long term business strategy? Is that aligned with where you have the greatest risk of liability and/or the greatest chance of financial gain. No attorney can cover all topics so you do want to reserve some budget to be able to hire out as needed. If all else fails, I would ask: How well does the candidate fit with my company culture? Which candidate seems most likely to move ahead of or at the pace of my business' strategy? Good luck!

Reply by a searcher
from INSEAD in Bussum, Nederland

You will incur management debt if you hire more than 1 (see chapter 5 of The Hard Thing about Hard Things). What is the quality that is a must have, and what is a quality that you do not necessarily need? On the basis of that analysis you make the hire. Hard to find success if you do not know what you want.

Furthermore, and I may be voicing a dissenting opinion: but I would actually not take them on the payroll at all, but hire them when needed.

+4 more replies.

Join the discussion