Real Estate Legal Counsel: Exploring Crucial Hiring Options for Legal Services

The need for professionals working in real estate legal services has increased by 43% in the last year.

This figure is cited by a joint report by APSCo and Vacancy Soft.

This surge can be attributed to a variety of factors currently affecting the industry, including higher inflation, material shortages, labour shortages and changing building regulations. A combination of these factors has increased the complexity and risk involved in real estate projects, thereby necessitating specialised legal guidance.

These challenges create a whole host of issues, making it critical to have the right legal setup in place to help companies protect their operations and mitigate risks going forward.

A core role for legal advice is that of in-house Legal Counsel. They safeguard the company’s operational interests and ensure compliance with continually changing laws and regulations. They act on behalf of your organisation, knowing the ins and outs of your business, in order to better legally represent business interests.

An in-house legal counsel also helps to better liaise with external legal teams you bring on and ensure optimal legal protection with their knowledge and expertise.

These are the very questions you should be asking to ensure your entire legal function is performing in the most effective way possible.

This post aims to explore your options for a real estate legal team and specifically investing in an in-house legal counsel, to understand why they are an indispensable function to any business.

The Importance of Real Estate Legal Services

Regardless of the type of company, whether it be a developer, investor, consultancy; or otherwise, all businesses need legal support to protect their finances and mitigate risk.

While larger companies typically have these teams in place already, small to medium-sized companies stand to gain significantly from having in-house legal expertise.

In-house teams can think more critically and creatively about how to navigate legal challenges and seize opportunities that might otherwise be missed. This extends beyond financial considerations as they can help improve relationships with external law firms and extract more value from relationships by offering fresh perspectives and new solutions.

It’s important to note that in-house legal expertise does not replace the need for external legal partnerships; Whilst having an in-house team is critical for day-to-day operations and strategic thinking, partnering with a law firm remains essential as they bring specialised knowledge, handle complex legal matters, and provide additional support.

Having this function in-house should be seen as a strategy to enhance and leverage the relationship with external lawyers, maximising their value and expertise. It is not a cost-cutting exercise but rather a method to optimise operations and enable more sophisticated, risk-assured business decisions.

The Role of Real Estate Legal Counsel

A legal counsel provides comprehensive legal support and strategic advice across different parts of the business. Due to the factors mentioned earlier (inflation rates, labour shortages, etc) this role has become increasingly key, as now more than ever, companies are relying on legal advice.

Employing an in-house legal counsel is incredibly beneficial because they challenge existing decisions to maximise business potential. They might suggest exploring different types of funders or pursuing more secure deals based on their experience, finding that these approaches yield better ROI and improve relationships. By asking, “Have you considered doing this?” they bring fresh perspectives and strategic insights to the table.

Essentially, their role leads to more sophisticated and forward-thinking decisions, making the business less reactionary and more proactive.

When hiring real estate legal counsel, their experience and expertise will differ depending on the type of company they’re moving from so it’s important to understand what skills you’re looking for in your own business.

For example, someone who is used to working in-house is very different to an individual moving from a private practice law firm. That’s because those working for a law firm usually deep-dive into one specific specialism

In contrast, working in-house involves liaising with several different departments meaning in-house professionals often have a generalist understanding.

Consequently, in-house professionals are often more generalist and have an understanding of the business’s overall operations and how its various components work together. They can then work closely with your external law firms where more niche and in-depth advice is required at any particular time.

The role of a legal counsel also varies depending on whether they’re working for a developer, investor, or consultancy. We’re exploring these differences below to help you determine the type of real estate legal counsel you need to identify those candidates who will bring the most value.

Real Estate Legal Counsel in Different Types of Companies

The following sections provide an overview of the role and responsibilities of a real estate legal counsel across different types of organisations.

Developers

A legal counsel for a development company will often need to have a background in construction as they’ll need to navigate legal issues associated with building projects such as understanding construction contracts and ensuring compliance with local building codes.

Additionally, the developer will need them to handle the transactional side of things, as they may be required at the very start of a project to help secure funding.

As they will be working closely with investors, the legal counsel will need to be able to structure deals that satisfy both regulatory requirements and the financial interests of the investors. They must also ensure that all agreements are legally sound and protect the company’s interests.

Depending on the type of developer, they might be required to help with disposals, ensuring that property sales are completed efficiently and in line with legal requirements. This involves drafting and reviewing sale agreements, negotiating terms, and managing any legal issues that arise during the disposal process to ensure a smooth transaction.

Overall, a legal counsel in a development company typically holds a more generalist role, requiring a wide range of legal expertise across multiple disciplines.

Investors

When working for an investment company, a legal counsel’s role is predominantly focused on the financial and transactional aspects of real estate deals.

Their responsibilities centre on structuring and negotiating deals, ensuring compliance with financial regulations, and managing the legal intricacies of investments.

Typically, these individuals have backgrounds in private practice, often coming from real estate finance teams or mergers and acquisitions (M&A) teams.

Their experience in these areas equips them with the skills necessary to handle complex transactional relationships, assess investment risks, and facilitate smooth, legally sound financial transactions. This specialised expertise is crucial for managing the investor’s portfolio and maximising returns while mitigating potential legal risks.

Consultancies

For large consultancies (such as CBRE or JLL) that manage substantial corporate assets, the role of a legal counsel is primarily focused on leasing and tenant/landlord relationships, dealing predominantly with commercial rather than residential properties.

As such, these companies seek professionals with strong expertise in tenant/landlord law, including negotiating leases, handling disputes, and ensuring compliance with relevant regulations.

While construction skills are less critical here, consultancies may still value transactional skills, especially if the company is involved in the sale or disposal of assets.

Therefore, a legal counsel in this context should be adept at managing complex leasing agreements and have a solid understanding of property transactions to support the consultancy’s range of services.

Benefits of Hiring An In-House Legal Counsel

In a rapidly changing regulatory and market environment, there is a growing need to hire a dedicated real estate legal counsel in-house.

Whilst this individual does not replace the need for an external law firm, having someone work in the business who is able to get under the skin of what is happening and challenge decision-making, is key. Below, we’re exploring why hiring for this role internally is advantageous.

Ability to make an impact

Real estate is a process-driven business, allowing professionals to witness different stages of development and feel integral to the journey.

Take the construction of a building as an example. Those working on it can see it progress from an initial blueprint to a completed structure, seeing the tangible results of their efforts.

The same applies to a legal counsel. They can see the impact of their work on the business when working in-house, unlike at a law firm where they provide advice to multiple clients.

This means in-house legal counsels have a greater vested interest in the business, as they are part of the operations day in and day out. Being able to see their own personal footprint on a business is very rewarding.

Elevated team performance

Beyond the financial expertise and legal acumen that legal counsels bring to a business, they can significantly improve the entire team’s performance.

Their strong communication skills and ability to liaise with different agencies enable them to maximise the value of existing relationships. They provide fresh perspectives on situations, often devising solutions or approaches that others might not have considered.

Furthermore, having an in-house legal counsel with transactional expertise can be invaluable during deal negotiations. They can guide your team in using the right language and strategies to secure successful outcomes. Essentially, it’s about unlocking new opportunities and driving the business forward in the best way possible.

Example:

We work with a small independent investor, who despite having a lean team, is already looking to hire a legal counsel. Smaller businesses like this can greatly benefit from having in-house legal expertise, enabling them to make more efficient and sophisticated business decisions.

It’s not about the size of the team; it’s about the benefits that can be achieved. Legal counsel provide immediate legal insights, streamline decision-making processes, and ensure that all transactions are conducted smoothly

Vast pool of candidates

Another benefit of hiring an in-house legal counsel is the vast pool of candidates available. England and Wales’ use of a common law system allows employers to draw from a global talent pool.

This provides more opportunities for finding the ideal hire, as you are not confined to candidates within one geography.

What Legal Counsel Applicants Seek in a New Role

Understanding what legal counsels seek in a new role is crucial to making your opportunity appealing to their interests.

Drawing on insights from our team of recruitment consultants, we’ve identified key factors that matter most to them:

• Salary: While our salary survey shows a slight decline in its prioritisation, salary naturally remains an important factor when candidates are considering new roles. It remains essential for your job offer to be competitively positioned if you want to secure the best talent.
• Work-Life Balance: This is increasingly important, with many employees seeking a better balance between work and personal commitments.
• Legal Discipline of the Role: Candidates are keen to know the specific legal discipline the role entails. They are less likely to consider a position outside their area of expertise, making it vital to clearly define the role in your job advertisement.
• Impact They Can Make: Candidates are often motivated by the tangible impact they can have on the business. This is a significant draw for those moving from a private practice to an in-house role, as it allows them to see the direct results of their contributions.

Navigating Real Estate Legal Services: Exploring Crucial Hiring Options

The role of real estate legal services, particularly that of a legal counsel, is becoming increasingly important for businesses of all sizes.

The biggest challenge lies in assembling the right legal team as changes in the market and governing policies progress, even if you already have one in place. It’s not just about having a team but about getting the most value from them to make sound, informed business decisions.

With more businesses relying on legal advice than ever before, having an in-house legal counsel who can view scenarios from a fresh perspective is invaluable.

As recruiters in real estate, we understand that the role of a legal counsel can be complex, with no one-size-fits-all solution. Our advice to any client is to first recognise the importance of an in-house function, then identify what this looks like for your business and its unique needs. Every situation is different, and there is no uniform solution.

With 30 years of experience in real estate and a vast database of qualified candidates, we can help you identify your legal hiring needs and tailor this role to your unique requirements. For an informal conversation, get in touch with our team.