FinTechs... your legal bill is how much?!
The FinTech boom in London is showing no signs of slowing down, despite the backdrop of political and economic uncertainty. In 2018, it was reported that investment in the UK FinTech sector leapt to a record $3.3 billion. With more and more FinTechs scaling quickly, the need for dedicated, specialist legal support is increasing. Whilst ad hoc law firm support has been the convenient go-to, many of these companies now stand more to benefit from hiring their own in-house lawyer (and in many cases growing a legal team).
One of the primary goals in establishing an in-house legal team is to reduce costs incurred by overusing external counsel. With private practice lawyers now charging up to £500 an hour, bills can quickly rack up. Many FinTechs, particularly small ones in their nascent days, don’t have the resources to justify hiring an in-house lawyer immediately, however, the volume of legal work can quickly increase and tip the balance of cost effectiveness away from external legal support in favour of bringing the expertise in-house. Everyday issues include general commercial contracts, technology agreements, financial regulation, financing and employment matters. Many top lawyers, particularly those who enjoy the commercial side of their roles, aspire to move in-house, meaning FinTechs have the opportunity to hire outstanding talent and at the same time reduce costs.
A lawyer that really works for you!
An in-house lawyer knows your business inside out in a way that external counsel never could. The best in-house legal teams are an integral part of the business. Rather than engaging lawyers when something goes wrong, successful companies recognise the benefits in bringing lawyers into the business and using their expertise to make better commercial decisions.
An in-house legal team can cut costs by reducing spend on external counsel as well as mitigating the threat of litigation. However, there are still occasions where outside support may be needed. In such cases, an in-house lawyer can manage external counsel and act as a conduit between law firms and internal stakeholders, thus freeing up the time of senior leadership.
As well as the practical benefits of reducing risk and managing costs, having an in-house legal function is a sign of a well-run business and gives reassurance to customers, regulators and current / potential investors. With the onset of more and more financial regulation – not to mention the potential disruption to our regulatory framework that Brexit could bring – it’s never been more important to have a robust legal and compliance function, both as a means of protecting your business from risk and to protect your image as a credible and responsible firm.
Hiring your first lawyer can be daunting, especially if you don’t have a legal background yourself. Using a specialist legal recruiter means that we can do all the work for you to find the best candidates to suit your team. At Hydrogen, we have a specialist in-house Financial Services team that cover both the FinTech sector and first legal hires. If you'd like to discuss the market and how we can assist you either now or in the future, please email firstname.lastname@example.org.