In the News
Aug 21, 2019

Kobi Bessin on the importance of external counsel for smaller businesses


For small and medium-sized companies without in-house counsel, developing an ongoing relationship with a trusted adviser that you can turn to for assistance and guidance on a myriad of legal issues is key to driving efficiencies and ensuring compliance, says Toronto corporate lawyer Kobi Bessin.

Although some companies may opt to use external counsel in limited situations to save on costs or try to deal with situations on their own, Bessin, partner with Torkin Manes LLP, tells this is where problems can occur.

“Without proper legal advice, you may have missed something, and it’s not so much from the perspective that you’ve read the contract, you can negotiate the contract, and you know what it says, but do you know what it ought to have said? Or do you know how you could have said it better so that there is no discrepancy, there’s no vagueness, things of that nature?” he says.

As such, Bessin explains, it is preferable to build a relationship with a legal adviser, so that, the same way a business would reach out to a chief financial officer or head of sales on a matter, the lawyer becomes de facto in- house counsel to ensure the company is complying with laws and regulations. For example, the adviser can provide a second set of eyes on anything from a contract to a distribution agreement, employment agreement, real estate lease, or work with the company on other matters such as mergers and acquisitions, litigation or tax planning.

“There are times where it’s worth reaching out to your counsel when you’re not 100 per cent sure, just to have a second set of eyes and have things reviewed at the outset so that you’re protected down the road. Cheap is expensive sometimes, and there’s a way to get efficient legal services if you have a trusted adviser, you have a trusted counsel or team that you can rely on to get you the advice that you need in an efficient way,” says Bessin.

Indeed, he says having familiarity, consistency and context with a client and their business helps in delivering efficient legal services.

“Using an example of a licensing or distribution agreement, if I know the business that I’m dealing with, it’s a lot easier to review because I know what I’m looking for, I know where their risks are and the same in a transaction,” he says.

For businesses that do have a lawyer on staff, Bessin says external counsel at a firm with depth, capacity and resources in various departments can also enhance and complement the work already being done in-house.

“In our case, I’m a point person for a client, they can reach out to me and if it’s a tech agreement, a banking or financing transaction, or it’s a piece of litigation or an insurance or regulatory question — whatever it is, by virtue of having a full-service business law firm in your back pocket that knows your business, you have your team of various people in different departments that can service that specific need,” says Bessin.

“I don’t see them as mutually exclusive, I see them as augmenting each other in the sense that on the one hand, you’ve got in-house counsel that can provide clear instructions on exactly what they’re looking for and take care of the rest and you can rely on that. And on the other hand, we can then provide and in turn do work in a certain way, knowing that in-house counsel will deal with the internal stakeholders in that company in terms of explaining it, implementing it and following up.”

Ultimately, for smaller businesses, Bessin notes, when you have an ongoing relationship with the right external counsel — a trusted adviser that you feel is part of your team — there will never be a bad time to reach out with questions or concerns.

“You can reach out at any point, and they can tell you ‘you should really have this,’ ‘we should be involved in this,’ or ‘you don’t need us for this,’” he says.

“If you don’t have in-house counsel, then I think you need to have the proper external counsel and having a team with capacity at various levels, price points and expertise in the industry can really help,” adds Bessin.

This article originally appeared on

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