An established, privately held Texas company carries real legal exposure. It negotiates substantial customer, vendor, and supplier contracts, employs a significant workforce, may operate from several locations, and answers to an ownership group with its own expectations. Disputes, demand letters, and regulatory questions are a regular part of doing business. What many of these companies don't have is a legal department.
Without one, legal work tends to be handled one matter at a time, often by whichever firm is available when an issue becomes urgent. An outside general counsel offers a more deliberate approach: an ongoing relationship with a law firm that learns the business and functions as its legal department.
What Is an Outside General Counsel?
An outside general counsel (sometimes called a fractional or outsourced general counsel) is an attorney or firm retained to serve as a company's primary legal advisor on a continuing basis. The difference from hiring a lawyer project by project is context. Over time, your outside general counsel learns how your company makes money, which contracts matter most, who your key customers and vendors are, and where your risks are. That knowledge makes the advice faster, more practical, and more consistent.
The difference from in-house counsel is depth and flexibility. A single in-house lawyer is one person with one set of experience. An outside general counsel relationship gives an established company access to a full firm, including experienced trial lawyers, and the capacity to scale up when a transaction or dispute demands it, without the cost of building and staffing a legal department.
What an Outside General Counsel Typically Handles
Contracts
Contracts are where most of a business's legal risk is created, and where most of it can be managed. Typical work includes:
- drafting and reviewing customer, vendor, supplier, and service agreements;
- independent contractor agreements and nondisclosure agreements;
- commercial leases; and
- negotiating key terms such as payment, limitation of liability, indemnity, termination, dispute resolution, and venue.
One example of why the details matter: Section 38.001 of the Texas Civil Practice and Remedies Code allows recovery of reasonable attorney's fees on certain claims, including claims on an oral or written contract, and since a 2021 amendment it applies to claims against organizations such as LLCs as well as individuals. Whether your contracts expand, limit, or shift fee recovery can change the economics of any later dispute.
Governance and ownership
For closely held and family-owned companies, governance documents often cause more trouble than any outside threat. An outside general counsel helps keep the following current and consistent with how the business actually operates:
- company agreements, bylaws, shareholder agreements, and buy-sell agreements;
- ownership records; and
- consents and minutes.
Texas requires filing entities to keep books and records, including minutes and a current list of owners and their mailing addresses (Tex. Bus. Orgs. Code § 3.151). Clean records matter most when a bank, a buyer, or a departing owner starts asking questions.
Employment and workforce issues
Within the scope the engagement covers, an outside general counsel can help with:
- offer letters and employment agreements;
- independent contractor classification;
- confidentiality and non-solicitation terms; and
- termination planning.
Texas enforces covenants not to compete only if they meet the requirements of Section 15.50 of the Business and Commerce Code, including reasonable limits on time, geographic area, and scope of activity. Health-care practitioners are subject to additional rules added in 2025.
Risk management and dispute prevention
Much of the value of an outside general counsel is in problems that never become lawsuits. That includes:
- answering a demand letter correctly the first time;
- giving required contractual notices on time;
- preserving documents when a dispute is foreseeable; and
- coordinating with your insurance broker and carriers so claims are reported promptly.
It also means keeping routine compliance current. For example, missing franchise tax reports can lead to forfeiture of an entity's privileges under Chapter 171 of the Texas Tax Code.
Insurance coverage review
When a claim comes in, one of the first questions is whether your insurance covers it. Our attorneys are experienced in interpreting commercial insurance policies, including what they cover, what conditions apply, and what notice is required. We can review a policy against a specific claim, help your company give proper notice, and work with your insurer to secure a defense and indemnity where the policy provides it.
Disputes and litigation
When a dispute can't be resolved, your outside general counsel already knows the facts and the documents. At a trial firm, the same team can evaluate the claim, handle pre-suit negotiation, and represent the company in court or arbitration if needed.
Signs Your Company Is Ready for Outside General Counsel
- You regularly sign substantial contracts, and too often on the other side's form.
- You have an ownership group, and the governing documents haven't kept pace with how the company has grown.
- You have a sizable workforce, multiple locations, or a heavy reliance on independent contractors.
- Demand letters, threatened claims, or contract disputes have become a recurring part of the business.
- You are planning an acquisition, a new partner or investor, an expansion, or a sale.
- Your legal work is spread across several firms, and no one sees the whole picture.
These needs come up across many industries, including construction, professional services, real estate and property management, transportation and logistics, manufacturing, energy services, hospitality, and multi-generation family enterprises.
How the Relationship Usually Works
Most engagements begin with an onboarding review of the company's formation documents, key contracts, employment documents, and any pending or threatened disputes. That review produces a short list of priorities. From there, the company has a regular point of contact for questions as they come up. The fee arrangement and scope are agreed in writing at the outset so there are no surprises.
How TMF & Associates Serves as Outside General Counsel
TMF & Associates serves as outside general counsel to established companies in the greater Houston area and across Texas, including energy and corporate clients, that want sophisticated legal services at reasonable rates. Our services include contract review and negotiation, regulatory compliance, employment matters, dispute resolution, and strategic legal advice. Our team is also experienced in interpreting insurance policies and can help a company secure a defense and indemnity from its insurer for a particular claim. Because our attorneys are also experienced trial lawyers, our clients have a team that can see a dispute through if prevention doesn't work. Learn more about our Outside General Counsel services.
Frequently Asked Questions
What does an outside general counsel do?
An outside general counsel serves as a company's ongoing primary legal advisor. That includes reviewing and negotiating contracts, maintaining governance documents, advising on employment and risk issues, and managing disputes, with an understanding of the business built up over time.
What is the difference between outside general counsel and in-house counsel?
In-house counsel is a full-time employee of the company. Outside general counsel is an independent law firm that fills a similar role on an ongoing basis without the salary and overhead of a full-time hire.
Is outside general counsel right for a company without an in-house legal department?
Often, yes. Established companies with substantial contracts, a significant workforce, and an ownership group to answer to have recurring legal needs, and an outside general counsel meets them with the depth of a full firm.
How is outside general counsel different from a regular business attorney?
A business attorney may handle a single contract, formation, or dispute. An outside general counsel relationship is continuing and broader, so the advice is informed by everything the firm already knows about the company.
Talk With Our Outside General Counsel Team
To discuss whether an outside general counsel relationship fits your business, call TMF & Associates at (281) 296-6500 or reach us through our contact page.
This article is for general information only and is not legal advice. Reading it or contacting our firm does not create an attorney-client relationship. Every matter depends on its own facts, and the law may change after publication. Consult a lawyer about your specific situation.