When a Closely Held Business Needs Outside General Counsel

Most closely held businesses call a lawyer after something has gone wrong. A partner wants out, or a former contractor starts calling on customers. By then the choices are narrower and the bill is larger. An outside general counsel arrangement puts a lawyer on the company's regular calendar instead, at a cost that fits a business too small to hire one full-time.

I spent nearly two decades in-house, first at a hedge fund and then as CFO and general counsel of a national real estate investment and lending group. In 2024 I made Hessquire Law, which I founded in 2015, my full-time practice. The legal problems that cost the least were the ones someone raised before the company signed or acted.

What outside general counsel means

An outside general counsel is a lawyer who already knows your business. I have read your company agreement, I know who the owners are and what they agreed to, and I have seen the contracts you sign every month. That background lets me answer most questions in a phone call or a short email. A lawyer meeting your business for the first time has to learn all of it, on your bill, before giving an answer.

When owners join, leave, or disagree

The company agreement controls what happens when an owner wants out, dies, divorces, or stops contributing. Many small businesses signed a form agreement when they formed and never looked at it again. The owners find out whether the buyout price and transfer restrictions work only when someone leaves. By then each side has every reason to read the gaps in its own favor.

Reviewing the agreement before an ownership change lets the owners fix those terms while everyone still cooperates. The same review is worth doing before you admit a new owner or change how profits are split.

When a contractor or employee leaves

A departing contractor or employee may take your customer list or your pricing. What that person signed controls what you can do about it. Confidentiality and non-solicitation terms help only if they were written to be enforceable and the business acts on them promptly.

A short letter often does the most good. It reminds the person, in plain terms, which obligations continue after the relationship ends. A letter sent in the first week costs far less than a lawsuit filed months later.

When a contract arrives on the other side's form

Vendors, customers, landlords, and lenders send their own forms, and their forms protect them. The provisions that cause trouble are usually indemnity, limits on liability, automatic renewal, personal guaranties, and where a dispute will be heard. Reviewing those provisions before you sign takes an hour or two. Litigating them takes much longer.

Amendments carry the same risk. A change written by someone without legal training, including an amendment to a real estate contract, often fails to say how it fits with the rest of the agreement. That gap usually surfaces only in a dispute, when each side reads it differently.

Loan documents deserve the same attention. A personal guaranty or a financial covenant can matter more to an owner than the interest rate, and lenders are far more willing to negotiate those terms before closing than after.

When a demand letter arrives

A demand letter starts a clock even when it does not say so. Your insurance policy may require prompt notice of a claim, and the business may need to preserve emails and records from that day forward. The first response also sets the tone for what follows. Many disputes end with a measured reply before anyone files suit, and a reply written in anger usually makes the dispute harder to settle.

When a decision has tax consequences

Many business decisions that look purely legal change who owes tax and how much. Admitting a new owner, lending money between an owner and the company, selling assets instead of ownership interests, and changing how distributions are made all carry tax and accounting effects. Because I am a CPA as well as an attorney, I review those effects before you sign, while the terms can still change.

How it works at Hessquire Law

I bill outside general counsel work hourly under a written engagement agreement, so you pay for the time each question takes. I keep the company's governing documents and its main contracts on file, and each new question starts from what I already know about the business.

If these questions come up in your business more than once or twice a year, you can request a consultation. You can read more about this work on the Business Counsel page.