What a Fractional General Counsel Actually Does (And Why You Need One Before Series B)

Most founders think legal counsel is something you hire when something goes wrong. A lawsuit, a regulatory notice, a term sheet that needs a redline. Until then, they patch together outside counsel on an as-needed basis, call their law school friend when a contract looks strange or assume that a serious legal function is something companies build later in a Series B or when they can afford a full-time GC.

This framing is expensive. Not because legal problems are lurking everywhere, but because the absence of consistent legal input means that decisions with significant legal consequences are made without it, such as the governance structure that seemed fine at formation, the IP assignment that was never fully executed or the employment agreement that created liability the founder did not see. None of these show up on a risk register. They show up later, when correcting them costs more than having them right would have.

WHAT A FRACTIONAL GC IS NOT

A fractional GC is not outside counsel on retainer. Outside counsel is transactional. You call them when you have a specific matter. They bill by the hour, they handle the matter, and they move on. They are not inside your company. They do not sit in your leadership meetings, they do not know your business model well enough to anticipate problems before they arrive, and they are not incentivized to tell you that you do not need legal work right now.

A fractional GC is not a paralegal service or a contract review subscription. These products exist for a reason, but they are document execution tools, not strategic counsel. They tell you whether a contract has standard terms. They do not tell you whether the contract structure serves your business, whether you are creating a dependency you do not want, or whether the relationship it documents should exist at all.

A fractional GC is embedded legal leadership, available at a fraction of the cost of a full-time hire. The distinction is not volume of work, it is the nature of the relationship.

WHAT THE WORK ACTUALLY LOOKS LIKE

The work of a fractional GC is not primarily contract review, though that is a large part of it. The work is building the legal infrastructure a company needs to operate, grow, and raise capital without creating problems that slow it down later.

That includes governance:  who has authority to make which decisions, how the board is structured and what it is supposed to do, whether equity is documented in a way that will survive a financing, whether the company has the records it needs to represent in a due diligence process that everything is clean.

It includes compliance. What regulations apply to the business, which ones the company is currently meeting, and what the gap looks like. For healthcare companies, this means HIPAA, state licensing, corporate practice of medicine, and any applicable federal program requirements. For any company handling personal data, it means understanding what the privacy obligations are and whether the current practices meet them.

It includes commercial relationships. Not just reviewing vendor contracts before signature, but understanding what terms matter for this particular company, what the company should and should not agree to, and what commitments in a contract will create operational or financial obligations down the road.

It includes employment:  offer letters, equity documentation, confidentiality agreements, classification decisions for contractors and employees. These are not administrative tasks. They are the foundation of the relationship between the company and every person who works for it.

A fractional GC does not wait for something to go wrong. The value is in the decisions that never become problems.

WHY EARLIER IS BETTER

The argument for waiting on legal infrastructure is usually cost. A fractional GC costs money. Outside counsel on an as-needed basis costs money only when something comes up. The logic sounds reasonable until you account for what comes up when legal input is absent from ongoing decisions.

Equity that was not properly documented at formation requires expensive cleanup at the Series A, if it can be cleaned up at all. A SAFE or convertible note with terms the founder did not fully understand creates surprises at the priced round. An employment arrangement that should have been structured differently becomes a claim. A vendor contract with auto renewal and minimum purchase commitments becomes a financial obligation the company did not intend to make.

The cost of these problems is almost always higher than the cost of the legal input that would have prevented them. The difficulty is prevention does not show up on a spreadsheet. The cost of the problem does.

The companies that understand this right are not the ones that hired the most lawyers. They are the ones that had consistent, embedded legal judgment available when decisions were being made, not after.

The equity that was not properly documented at formation does not become a problem until the Series A. By then, the cost of correcting it is much higher than having it right would have been.

WHAT TO LOOK FOR IN A FRACTIONAL GC

The right fractional GC has done the work before. They have seen the problems that arise at each stage of a company's growth and they know which ones are worth solving proactively and which ones can wait. They are comfortable being a genuine part of the leadership team, not just a vendor who reviews documents on request.

For healthcare and health tech companies specifically, the right fractional GC understands the regulatory environment you operate in. The legal issues that affect your company are not generic startup legal issues. They include clinical regulation, reimbursement, data governance and licensing frameworks that a generalist may not be equipped to navigate.

The engagement model matters too. A fractional GC should be accessible enough to be consulted before decisions are made, not just after. If the friction of reaching your legal counsel means you only call when something is already a problem, the value of the arrangement is significantly diminished.

The question is not whether your company needs legal infrastructure. It does. The question is whether you want to build it before the problems that come from not having it make the cost of building it much higher. Most founders answer that question correctly in retrospect. The ones who answer it correctly in advance have a different experience entirely.

If you are approaching a financing, expanding your team, entering a new market, or simply wondering whether your current legal setup is keeping pace with your company, that is a conversation worth having now. Reach out at laurafleetconsulting.com.

Laura Fleet, Esq. is a healthcare attorney, founder, and Fractional General Counsel advising early stage companies on governance, compliance, and legal structure. laurafleetconsulting.com