When a company actually needs a general counsel

Most founders ask the question in the wrong order. They start with headcount and budget, when the useful test is about the shape of the work rather than its size. A company can raise a large round and still have legal needs that a template library and a good outside firm handle comfortably, and a much smaller business can reach the point where every week without someone inside who owns legal risk costs more than a salary. The question comes up in broadly the same form in Bengaluru, London, Singapore and San Francisco, but the answer is shaped by local rules on who can act as a lawyer, which communications are privileged, and what corporate law already requires a company to appoint. This note sets out the three questions that decide it, what an in-house lawyer in India can and cannot do, and the options that sit between doing nothing and making a first hire.

Contract volume, and more precisely contract variety

The first question is not how many contracts the business signs, but how different they are from each other. Fifty copies of the same order form, on the company's own paper and with little room for negotiation, need a well-drafted template, a clear approval matrix and a process for handling the rare deviation, not a lawyer on payroll. Ten genuinely different agreements a month, each with its own counterparty, its own leverage and its own risk profile, are a different matter: enterprise customer agreements with liability and indemnity negotiations, distribution and licensing arrangements, vendor contracts with data protection terms, and partnerships that carry exclusivity or intellectual property questions. The signal to watch for is not the volume of paper but the number of decisions in it. When commercial teams are regularly accepting counterparty paper because nobody has time to review it, or when the same clause is being negotiated differently in different deals because there is no single owner of the position, the business is carrying contractual risk that nobody is tracking, and that is usually the first real argument for in-house capacity.

Regulatory exposure

The second question is whether the business has obligations that arrive on a calendar rather than on request. A company that holds personal data at scale, handles regulated money, sells into public procurement, operates under a licence, or runs a workforce across several states carries compliance obligations that someone has to own continuously. In India that list is long even for mid-sized companies: data protection obligations under the Digital Personal Data Protection Act, 2023, sector regulation from the RBI, SEBI or IRDAI where it applies, the internal committee required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, labour code compliance, and for a company with foreign investors or a foreign parent, reporting under the Foreign Exchange Management Act. UK and US businesses face comparable lists of their own. None of these obligations is especially difficult on its own. The risk lies in the fact that they are continuous, overlapping and easy to miss, and that the consequences of missing them, penalties, licence conditions and in some cases personal liability for directors, tend to land well after the lapse that caused them.

Decision latency

The third question, and the one most commonly missed, is how long commercial decisions wait for legal input. If a sales contract sits for two weeks because outside counsel has to be briefed afresh on the business each time, or if a product launch slips because nobody has checked the consent flow, the cost to the company is not the legal fee, it is the delay. Latency is also the question that budgets tend to hide, because the cost does not appear on a legal invoice; it appears in slower deals, cautious product decisions and founders spending evenings on redlines. The useful measure is simple: track, for a month or two, how many decisions were held up by a legal question and for how long. Where the answer is occasional and short, a responsive outside adviser is enough. Where it is frequent, the company needs legal input that already understands the business, its risk appetite and its standard positions, whether that sits on payroll or on a retainer with standing context.

What an in-house lawyer in India can and cannot do

An in-house hire in India is not simply an outside lawyer who happens to sit in the office. Rule 49 of the Bar Council of India Rules bars a full-time salaried employee from practising as an advocate, so an in-house counsel generally cannot appear in court for the company and litigation will still need external advocates. Privilege is a further difference. Section 132 of the Bharatiya Sakshya Adhiniyam, 2023, which carries forward Section 126 of the Indian Evidence Act, protects professional communications with an advocate, and whether that protection extends to an employed lawyer has long been uncertain in India; the Supreme Court addressed the question in 2025 in a way that makes it unsafe to assume internal legal advice will be privileged in the way advice from external counsel is. The contrast with other systems is instructive: US law recognises privilege for in-house counsel acting in a legal capacity, following Upjohn Co. v. United States, English law does the same, while the Court of Justice of the European Union in Akzo Nobel Chemicals v. Commission refused privilege to in-house lawyers in EU competition investigations. It is also worth separating the role from the company secretary, whom Indian law requires once a company's paid-up share capital reaches ₹10 crore. A company secretary manages governance and statutory compliance under the Companies Act, 2013; that is valuable, but it is not the same job as owning commercial legal risk.

The options between nothing and a hire

For most companies below a certain size, the honest answer is that they need general counsel capacity rather than a general counsel, and those are different purchases. The first option is structural rather than human: template agreements with pre-approved fallback positions, a signing authority matrix and a simple contract register will absorb a surprising share of routine legal work. The second is outside counsel on a retainer that includes standing context on the business, which usually outperforms both ad hoc instructions to different firms and a single junior first hire who has nobody to escalate to. The third, as the company grows, is a first in-house lawyer supported by outside counsel for litigation, specialist regulatory questions and matters where privilege matters. Whichever route is chosen, the arrangement should be reviewed as the business changes, because the triggers move: a first enterprise customer, a regulated product line, a foreign investor or an expansion into a new market can each turn a comfortable retainer into a bottleneck within a quarter.