Alex’s Legal Crossroads: In-House or Fractional?

Alex is the founder of a fast-growing SaaS startup. Over the past year, he’s closed a funding round, onboarded 10+ new hires, signed a dozen partnership agreements, and started expanding into the U.S. market. Until now, legal was something he outsourced; standard NDAs, quick contract reviews, corporate housekeeping.

But lately, he’s feeling the strain. External legal bills are climbing fast, day-to-day decisions require speed, and every new investor or partner seems to trigger a new set of compliance questions. More importantly, he’s realizing that legal strategy is now inseparable from business strategy.

Alex doesn’t want to over-hire too soon, but he also can’t afford to keep making high-stakes legal decisions without internal guidance. So the question becomes:

Do I hire in-house right away, or look for flexible, external senior legal support to bridge the gap and help me understand the needs?

Alex’s dilemma is one many startup leaders face. It’s rarely a dramatic turning point, more often it’s the slow build-up of legal noise that begins to affect speed, focus, and confidence. The real issue? A lack of internal legal infrastructure that scales with the business.

The Common Misstep: Generic Advice Meets Startup Reality

Startups are often told to hire legal counsel once they hit a certain size or complexity. You’ll hear frameworks like full-time vs. part-time or generalist vs. specialist. But for founders juggling ten roles, these models can feel abstract, and hard to apply.

Under pressure, many default to a “just handle it” hire to cover contracts, HR, or compliance. While considerations like budget and scope are valid, without legal experience, translating them into a clear, strategic hire is tough. The result? Vague roles, mismatched expectations, and a legal function that never quite clicks.

The Tailored Option: Bring in a Fractional Legal Counsel

This is where a staged, tailored approach shines: engaging a fractional legal counsel; a senior lawyer embedded part-time for 3–6 months. Not just to handle legal tasks, but to diagnose your company’s actual legal needs.

What You Gain with a Fractional Counsel:

1. Assess Workload & Risk Appetite

• Identify your most frequent legal questions and problem areas.

• Spot opportunities for process, template, or automation-driven support.

• Evaluate your company’s risk profile and real tolerance for legal risk.

2. Define the Right Role

• Determine whether you need a generalist or specialist.

• Test if the role can remain part-time or needs to scale.

• Align legal seniority with budget and business goals.

3. Optimize External Spend

• Clarify what should stay with outside firms, and what can move in-house.

• Improve how legal work is briefed and managed externally.

• Reduce redundant or inefficient legal spending.

4. Design a Smart Long-Term Hiring Strategy

• Create a job description based on real needs, not guesswork.

• Align compensation, level, and scope with your hiring philosophy.

• Increase the odds of making the right hire the first time.

Fractional support doesn’t just fill a gap. It creates a real-time feedback loop. Through embedded work, you clarify what legal support your company needs, what it can afford, and what will actually drive growth. Actually, the earlier you embed senior legal support in the build-up of your company, the lower the risk of legal issues suddenly emerging at an inconvenient time, disrupting business operations, or even creating issues during a funding round.

Beyond aligning legal with business strategy, this approach gives startups something equally valuable: financial flexibility. With a fractional legal counsel, you can scale support up or down as needs evolve whether through hourly billing, a fixed monthly retainer, or project-based scopes.

A senior fractional legal counsel may seem like a bigger upfront investment. But in practice, it often pays for itself by streamlining legal operations, avoiding costly mis-hires, and building the right legal foundation from the start.

Having supported dozens of startups through this transition, we’ve seen how this model reduces risk, speeds up decision-making, and leads to better, more strategic long-term hires. For founders still figuring things out, it’s a flexible, tailored, and practical way forward.

Conclusion

Hiring your first in-house legal counsel is a strategic decision. But jumping in without a clear understanding of your needs often leads to mis-hires or underused talent. A fractional legal counsel gives you breathing room, offering senior expertise while you gather the insights necessary to scale your legal function with confidence.

It’s not a stopgap. It’s a smarter way to grow. If this resonates with you, feel free to reach out to have a conversation about how we can help you.