Interim General Counsel: When this is a sensible way to fill vacancies and how it is billed

The risks posed by a vacant head of legal department

The absence of legal management rarely results in anything other than legal backlogs. Contract approvals become inconsistent, deadlines are left in individual inboxes, external law firms work without a shared set of priorities, and specialist departments make similar decisions based on differing criteria. In a transaction or crisis, this can mean that the very information needed by managing directors or supervisory bodies to make a sound decision is missing.

The responsibility of senior management cannot be delegated by appointing an interim General Counsel. Rather, temporary legal leadership creates the structure within which risks are identified, documented and escalated to the relevant decision-makers in good time. This includes a comprehensive overview of procedures and deadlines, a clear risk assessment, transparent approvals and robust documentation of pending decisions. Without these fundamentals, the legal function remains vulnerable, even if individual legal issues are handled correctly from a technical perspective.

When it makes financial sense to appoint an interim General Counsel

The classic scenario is a short-term vacancy. Filling the role permanently takes time and care, whilst contracts, disputes, board meetings and compliance issues continue to arise. An interim GC can stabilise operations without putting the selection process for the permanent role under time pressure. Their deployment can be equally beneficial during parental leave, prolonged absence or a temporary overload on the existing team.

In the case of corporate acquisitions, disposals, financing or major reorganisations, the focus is different. Here, the temporary head of legal affairs collates internal information, coordinates due diligence, contract negotiations, approvals and external specialists, and ensures that operational matters are not neglected alongside the transaction. In a compliance incident, a significant legal dispute or a regulatory investigation, on the other hand, the key factors are rapid clarification of the facts, secure documentation, clear communication and a coordinated defence or remedial strategy.

Another scenario is the initial establishment of a legal function. In such cases, the remit should not be limited to handling current contracts. What is required is a legal risk inventory, a transparent intake and approval process, standard contract templates, rules for the use of external law firms, budget transparency and documentation that can later be taken over by a permanent management team.

Terms of reference, powers and integration into the organisation

Before the role begins, the company and the interim GC should define which matters fall within the scope of the role and which decisions remain with the managing director, the executive board, the supervisory board or specialist departments. The mandate may include leading an existing team, managing external law firms, contract and dispute management, compliance coordination, preparing for board meetings and budget responsibility. However, each company requires its own specific scope of responsibilities. An unclear expectation that the interim GC will take on ‘all legal matters’ can quickly lead to gaps or duplication of work.

The contractual model must also be suited to the actual nature of the collaboration. A legal mandate, a self-employed interim assignment, a fixed-term contract and a staff secondment have different implications under professional, liability, employment and insurance law; furthermore, legal services may generally only be provided within the permissible framework.

To get operations up and running, the interim GC needs access to contracts, case files, guidelines, board documents and the relevant contacts. Access rights should be limited to what is strictly necessary, sensitive data must be protected, and any potential conflicts of interest must be clarified in advance. Confidentiality and any protection afforded to legal communications depend on the specific context of the mandate and proceedings. Both must be explicitly assessed in relation to the relevant jurisdictions and investigations.

Cost models without false incentives

A daily rate is suitable when the scope of work and presence vary from week to week. The company pays for the agreed working days, but should also set out how travel time, short-notice availability, evening appointments and work outside the scheduled days are to be handled. For an ongoing engagement with a fixed capacity range, a monthly retainer may be more suitable. It should go beyond simply stipulating availability and specify the days or hours included, response times and the services provided.

For a transaction, investigation or set-up project, a phase-based budget may also be appropriate. The key factor is the transparency of the chosen model. The company should know which services are included, when additional approvals will be required and what external costs will be incurred.

The cost comparison must not be limited to the daily rate. Other relevant factors include avoided inefficiencies, better management of external consultancy, faster decision-making and the quality of the subsequent handover. A low-cost engagement without sufficient availability or documentation may ultimately prove more expensive than a clearly defined mandate.

The handover begins on the first day

An interim assignment should begin with a written overview: which processes are currently underway, which deadlines are critical, which contracts or projects take priority, which risks remain unresolved and which decisions are pending? This forms the basis for an ongoing matter register detailing responsibilities, status, next steps and document storage. This register guides day-to-day work and also forms the core of the subsequent handover.

During the assignment, processes should be documented in such a way that they function without the need for additional personal knowledge. This includes contract templates, approval matrices, consultant contacts, budget balances, committee calendars and outstanding legal issues. Before the end of the mandate, critical issues are reviewed together with the permanent successor or the managing director. A well-organised handover includes the relevant files and their context: why was a particular position chosen, which alternative was rejected, and where is a new decision required? Only then does the temporary legal head leave behind a more stable function rather than a new knowledge gap.