First general counsel vs fractional: which one your company needs

These are thresholds we have seen in files, not laws. The one hard figure in the revenue tree is the $100 million boundary of the first-GC fractional rate band on our closed engagements. Everything else is a pattern to test against your own legal calendar, not a number to apply mechanically.

Tree 1 — Revenue

Tree 2 — Regulatory load

Tree 3 — Funding stage

If the trees disagree, the regulatory tree wins. A licensed business with $40 million of revenue that runs a fractional GC has a named-officer gap no matter what the cost table says. A $120 million software company with no licence and episodic work can defend a fractional seat for longer than its revenue suggests, and should say so to its board in writing.

We run 38 general counsel and chief legal officer searches inside a book of 230+ in-house placements since 2017. We also run 60+ interim and fractional engagements, counted separately. The fractional book is larger than the general counsel book. The reason is not that companies prefer part-time lawyers. It is that the first legal question most companies ask is shaped like a fractional problem, and a search firm that answers every first-GC enquiry with a retained search is selling the wrong product.

The full-time route also has a cost that its advocates skip. A retained GC search takes a median of 11 weeks to an accepted offer, range 8 to 16, and a company with a leave date or a financing inside that window does not have the time. Across placed in-house leaders, retention is 97 percent at 12 months and 91 percent at 24 months. That is a good number, and it still means roughly one placed leader in eleven is gone by the second anniversary. A fractional engagement has none of those failure modes: it starts in a median of 7 days, it stops when the payments stop, and nobody has to be managed out.

The practical consequence is a rule we apply on the first call. If the work fits three days a week and nobody outside the company needs a named officer, we say fractional, quote a day rate and credit the days billed against a later retained fee. A Series C payments company in San Francisco took that route: fractional counsel for two quarters, then a permanent search. Their chief executive said both were right, and that the fractional counsel started in a week. Earlier cover did not cost the search anything. It gave the board an honest calendar for it.

A first general counsel is a builder who still drafts. The profile is commercial judgment first, breadth second, and a listed-company pedigree a distant third. The job description copied from a large-cap general counsel is the most common way a first search fails: it asks for a department of twelve in a company that funds one lawyer. The general counsel job description guide sets out must-haves and red flags by company size, and hiring your first general counsel covers the profile, the reporting line and the first 90 days.

The search is a retained mandate. Our general counsel search is briefed in week one, maps the sitting market in weeks one and two, approaches people privately, and delivers a shortlist with assessment dossiers in a median of 24 days. The fee is 25 to 30 percent of first-year total compensation, with 30 percent of it paid as a retainer at engagement, a 12-month replacement term and a 24-month off-limits on your legal department. The published clock and the terms are in how to run a general counsel search.

If the answer is fractional, the brief is shorter and the start is faster. Interim and fractional legal talent starts in a median of 7 days, conflicts are checked before the first call, and the conversion to a permanent search is written into the letter.