General Counsel: Outsource or Hire?

The question comes up in almost every growing company's leadership team: should we hire a legal director, or rely on external expertise? The answer depends on volume — but also on a cost that is often badly underestimated.

The cost of an in-house legal director is more than the salary

The salary of a senior General Counsel in Switzerland sits, depending on sector, company size and region, within a wide range: commonly between CHF 180,000 and CHF 300,000 in base salary, and higher in large groups. But the headline salary is only part of the real cost.

On top of base pay come several items that are easy to overlook at decision time:

• Employer social charges — old-age and disability insurance, unemployment insurance, occupational pension (LPP), accident insurance, family allowances — roughly an additional 12 to 18% of pay.
• The bonus and variable component, common at this level of seniority.
• Recruitment fees: an executive search firm typically charges 20 to 30% of the first-year package.
• Recurring costs: workstation, tools, legal research subscriptions, continuing education, insurance.
• Time: several months between the decision and the actual start — during which the need does not disappear.

The cost of an outsourced legal director

A Fractional General Counsel — a shared-time legal director — is paid for the time actually used. The company agrees on a format: a few days a month, a monthly retainer for a defined number of hours, or a scoped project mandate.

There are no social charges, no recruitment fees, no infrastructure costs and no long-term commitment. Billing is smoothed and predictable. For a company whose legal need amounts to 30 to 50% of a full-time role, the annual cost typically sits at a fraction of the fully loaded cost of an in-house position — for identical seniority.

The comparison, line by line

Beyond cost: the real question is volume

Price is not the only criterion, and not the most important one. The decisive question is volume. A company that generates a continuous, daily flow of legal work fully justifies a full-time in-house role. A company whose need is real but irregular — a few structuring matters a month, peaks tied to projects — pays, with a full-time role, for capacity it does not use.

The outsourced model resolves exactly this mismatch: it aligns cost with actual use.

When hiring remains the right choice

The outsourced legal director is not a universal answer. In-house recruitment is the right move when legal volume is high and constant, when the role must lead a sizeable legal team, or when a permanent physical presence is an operational or regulatory requirement.

In many cases the outsourced model is in fact a useful step: it lets a company structure its legal function, measure the real volume, and then hire at the right moment on clear foundations — or even hire a more junior profile whom the Fractional GC supervises.

The figures cited are indicative orders of magnitude provided for general information. They constitute neither financial advice nor a price list; each situation calls for its own assessment. To discuss a format suited to your organisation, see the Services page or get in touch.