Where Should Legal Sit? 

A Board-Level Decision Too Many Founders Get Wrong

Hiring your first in-house lawyer is a milestone. It signals that the business is entering a phase where commercial decisions, regulatory expectations and operational realities all need a more structured approach. If you’re a CEO, COO, or founder looking to hire in house legal counsel, you’ve probably already found that one question gets remarkably little thoughtful discussion: where should legal sit in the organisation?

Most businesses make this decision reactively. Legal ends up under Finance because risk is assumed to be financial. Or under HR because employment issues feel loudest. Or under Operations because that’s where everything else eventually settles. These choices aren’t inherently wrong, but they’re rarely based on a clear assessment of what the business actually needs.

Where legal sits has direct consequences for how quickly a company can move, how decisions are made, and how effectively the business manages increasing complexity. The impact isn’t immediate. It appears 12–24 months later, when regulation, data, contracts and commercial demands start intersecting in more complicated ways.

As a specialist legal counsel recruiter, I’ve seen how much difference thoughtful positioning can make. Legal can be a strategic asset or an administrative afterthought, and the structure almost always determines which one it becomes.

The New Reality

Legal is No Longer Just "Support"

The in-house legal function of 2025 is not what it was a decade ago. Modern in-house lawyers are no longer contract-processors or professional naysayers; they are business architects.

If you are looking to hire in house legal counsel simply to "keep you compliant," you can outsource that. But if you’re hiring internally, it’s usually because the business is entering a phase where legal needs to be embedded in strategic thinking.

Today’s General Counsel influences:

• Deal structures and commercial strategy
• Product development and IP protection
• Regulatory positioning and investor confidence
• ESG and ethical decision-making

This makes the question of how to structure a legal team not just an HR issue, but a much more detailed (and crucial) business design challenge.

Should General Counsel Be on the Board of Directors?

There isn’t a single correct answer. Some companies gain real strategic value from giving their first in-house lawyer a senior seat; others are better served by introducing legal at an operational level first and elevating it later. The decision turns on two factors: the complexity of the business model and the extent to which legal considerations shape strategic choices. To be specific, you should consider giving legal a senior seat if your business fits into any of the following categories:

1. You operate in a high-risk sector

Fintech, energy, healthcare, aviation, or platforms involving consumer data. If regulation can break your business model, legal is a strategic necessity. Putting legal three layers down is an operational blind spot waiting to happen.

2. You are in M&A mode or gearing up for investment

If you're fundraising, acquiring competitors, or preparing for a sale, legal needs to be plugged directly into your commercial thinking. Deals don't go wrong in the negotiation; they go wrong in the planning.

3. Your value is tied to IP or Data

If your product is your intellectual property, legal becomes the guardian of your competitive advantage. Boards often underestimate how easily IP is diluted or mismanaged simply because legal wasn’t involved early enough.

4. You’re selling complex enterprise deals

Enterprise technology, SaaS, public sector contracts- the bigger the client, the more legal complexity. If legal sits too low, negotiations slow down, deals stall, risk mushrooms, and sales teams get frustrated.

5. You are scaling headcount or geography

Nothing compounds legal risk faster than rapid scaling. Employment law exposure, cultural risk, and cross-border compliance cannot and will not be solved by an overstretched lawyer buried in the Operations department.

The Non-Legal Argument: Even if your risks are moderate, legal brings a type of thinking your board likely lacks. Most scaleup boards are excellent at vision and selling, but they often lack structured thinking, scenario analysis, and institutional memory. A good General Counsel provides the counterbalance that stops the business from sprinting into a wall.

How to Structure Your In-House Legal Department

Let’s be direct. Putting your first legal counsel hire in the wrong place is one of the most expensive silent failures in high-growth companies. Things rarely explode immediately; they decay quietly.

Here is the reality of the different reporting lines I see as a legal counsel recruiter:

How to Embed Legal as a Strategic Function

Deciding how to structure a legal team is step one. How you treat that team is step two.

If you want your legal function to be an engine rather than an anchor, follow these five principles:

1. Involve Legal Early: The biggest risk in scaleups isn't bad decisions, its decisions made too late without legal input.
2. Grant Access: Legal cannot advise on what they cannot see. Give them access to data, product roadmaps, and leadership conversations.
3. Encourage Cross-Functional Relationships: The businesses that get legal right don’t silo it. They integrate it with Product, Engineering, Sales, and Marketing.
4. Ensure Independence: Lawyers must be able to advise freely without bending under commercial pressure.
5. Reframe the Role: Position legal as your navigator, not your speed limiter.

A Note for the In House Lawyers Reading This

(Here’s What You Need to Do to Earn Your Seat on the Board)

I’ll say something that candidates may not like: You are not owed a seat on the board. You have to earn your influence.

If you want to sit at the senior table, you need to:

• Understand the business metrics (revenue, pricing, margin).
• Speak in commercial terms, not legalese.
• Engage with product and go-to-market teams proactively.
• Show that your input accelerates growth rather than blocking it.

Boards listen to lawyers who make decisions easier, not harder.

Growth Lever or Liability?

How to structure your in-house legal department is ultimately a choice about what kind of company you want to build.

Legal can be the most underused strategic asset or the biggest hidden cost in your business, depending entirely on where you place it. The difference almost always comes down to where it sits, how early it's involved, and whether the role is treated as strategic or merely functional.

• If you bury it, you’ll get “contract admin.”
• If you elevate it, you’ll get faster deals, better compliance, defensible IP, and higher investor confidence.

There is no single correct answer to the org-chart question. But there is a correct answer for each individual business, and it depends on the nature of the work your lawyer will handle and the degree of legal risk inherent in your model. Making that decision thoughtfully gives the business a foundation strong enough to support the growth that comes next.

Are you looking to make your first legal counsel hire or restructure your current team? As a specialist legal counsel recruiter, I help businesses find the strategic in-house legal talent that drives growth. Give us a call or email us at info@jmc-legal.com to discuss your hiring strategy.