Outside General Counsel: The Global Legal Trend Now Reaching Companies in Chile

There comes a moment in every growing company where the traditional legal model stops working.

Contracts multiply. Regulatory decisions pile up. Risk stops being something "we'll deal with if it happens" and starts reaching the board's agenda. And the partners or founders begin making legal decisions in meetings where they shouldn't be discussed: on WhatsApp, between one coffee and another, with incomplete information.

That tipping point is more common than it seems. The interesting thing is that the known routes to solve it — hiring an in-house General Counsel or working with a firm on an hourly basis — come with costs and incentives that are rarely made explicit before closing.

There is a third path, with 25 years of track record in the United States, more than 15 in Europe, and a decade in Mexico, Colombia, and Spain: the Outside General Counsel (OGC). A firm that operates as the company's legal department without the company having to open a legal department. In Chile, the model is just beginning to take hold, and this article explains it in detail: how it works, why it has become massive for mid-sized companies in other markets, and how to evaluate whether your company is at the point where OGC makes sense.

The Three Traditional Routes and Why They Don't Always Fit

Route 1 — Hiring an In-House General Counsel

The intuitive option: open a position. According to the Idealis 2026 Salary Guide, the median salary of a General Counsel in Chile is $8.2 million net monthly, with high-percentile ranges exceeding $20 million. Add to that a standard bonus equivalent to 2-4 gross annual salaries, employer contributions and payroll taxes, secretarial and support staff, budget for external specialists, training, software, and subscriptions.

All in, the total annual cost for the company can easily exceed $150 million, and much more in regulated industries or roles with regional scope.

For a company that already has high legal volume, the investment is justified. For a mid-sized company in transition, it rarely is.

Route 2 — Hourly-Billed Law Firm

The standard model of traditional legal practice: each consultation is billed by the minute. The structural problem is one of incentives: the firm's business grows with the client's problems, not with the absence of them. The practical consequence shows up in four repeated patterns:

• Deep knowledge of the business rarely happens, because every minute invested in understanding the client without billing is a cost for the firm.
• The legal budget becomes difficult to plan: the client doesn't know what the bill will be at month's end.
• "Small" queries get postponed ("it's not worth spending hours on that") and end up escalating.
• The firm rarely brings in the specialists that would be needed, because that would split the margin.
• When the same firm handles both preventive advisory and the client's litigation, a structural conflict of incentives appears: preventing a conflict reduces future litigation billing.

The above is not an accusation against the professionals who work in those models; it's a description of the incentive the model itself imposes.

In more mature legal markets, this conflict is resolved in three ways: with conflict counsel structures (a different firm for litigation), with boutique firms that voluntarily don't take the dual role, or with very rigorous internal ethical divisions within the same firm.

What Is an Outside General Counsel?

The Outside General Counsel (OGC) is a model in which a law firm assumes, contractually and on a continuous basis, the role that an in-house General Counsel would fulfill in a company. It's not a provider that charges per ticket. It's a team that operates as an external legal area integrated into the organization.

The model was born in the United States in the late 1990s, initially for startups and SMEs in Silicon Valley that couldn't afford a full-time General Counsel and yet needed constant strategic legal judgment to raise capital, scale operations, and negotiate complex contracts. Within a few years, it became widespread practice for mid-sized American companies, with specialized boutique firms that now dominate that niche.

In the 2000s, it crossed to Europe — first to the UK, then to the continent — where it consolidated under names like Fractional General Counsel or Outside General Counsel and received additional momentum from post-2008 crisis regulatory changes, which increased the legal complexity of mid-sized companies. In the last decade, it expanded to Latin American markets: Mexico, Colombia, and Spain, where today it's known as Virtual GC, External Legal Management, or General Counsel as a Service. The variants change in format (available hours, degree of presence, team composition), but they share the same architecture.

In Chile, the model is arriving now.

The Four Pillars of the Model

1. Deep Knowledge of the Business

An OGC operates on a continuous basis. This means that after a few months, it knows the standard contracts, recurring counterparties, internal processes, business lines, and pending strategic decisions. When a question comes up, the answer is built with business information, not based exclusively on the law.

2. Predictable Monthly Fee

The client doesn't pay per hour or per ticket. They pay a monthly fee that covers the defined scope. This does two things at once: it makes the legal budget plannable, and it eliminates the friction of calling "for a small query" that in the hourly model gets postponed.

3. Specialist Coordination

The client has a single point of entry. The OGC is the one who determines when a specialist is needed (e.g., tax, antitrust, etc.), finds them, gets quotes, and manages their advisory on behalf of the client.

4. Aligned Incentive

This is the most important economic difference. Since the fee is monthly and fixed, the firm earns when the client has few problems, not when they have many. Prevention stops being a cost; it becomes part of the product.

An additional point that is not minor: in Chile, the Competition Tribunal ruled — in case No. C-386-2019, on collusion in the salmon feed market — that attorney-client privilege protects only communications with external lawyers, not those held with the company's in-house lawyers. This criterion adds a practical dimension to the OGC model that will be addressed in greater depth in a separate guide.

Which Types of Companies It Works Especially Well For

Chilean Companies Going International

A Chilean company opening operations in Peru, Colombia, Mexico, Spain, or the United States rarely justifies opening a legal position in each jurisdiction. But legal risk doesn't stop at borders: distribution contracts, trademark registration, local corporate structures, tax compliance, employment relationships under each regime.

The OGC solves this with a centralized legal head in Chile that coordinates a network of local correspondents, one per jurisdiction, with consistent criteria. The company has a single point of contact, and the OGC handles translating Chilean reality to the local framework and vice versa.

Non-obvious benefit: comparative judgment. Decisions that worked in Colombia can be adapted to Mexico. Mistakes seen in Spain are anticipated in Peru.

Multinational Subsidiaries Entering Chile

The reverse case is equally frequent, and it's where the OGC most clearly shows its value: it is hired from day one of landing in Chile, precisely because the first phase of setup is the most intensive in legal workload of the subsidiary's entire life.

In those first months, the bulk of structural legal work is concentrated: company incorporation, local powers and governance, hiring the first team under Chilean labor law, negotiation of leases and facilities, contracts with local suppliers and distributors, trademark registration, compliance and data protection implementation, and adaptation of HQ policies to Chilean regulatory reality. All of this happens in parallel, with crossed deadlines and a commercial team that doesn't yet have a local contact network.

Opening an internal legal position on day one isn't viable: the selection process in an unfamiliar market takes months, post-setup volume drops, and HQ has no way to evaluate local candidates. Hourly billing doesn't fit either, because at this stage queries are daily and billing becomes impossible to control.

The OGC solves exactly that gap: it delivers a complete legal soft landing from day one, with stable local presence, predictable monthly fee at the moment of greatest workload, direct communication with HQ in Spanish and English, and cultural — not just linguistic — translation of the Chilean context. It accompanies the setup phase, absorbs the initial peak of work, and then stays in steady state as the operation stabilizes. When years later the subsidiary reaches the volume that justifies a local in-house, the OGC has already left the ground organized for that handover.

Mid-Sized Companies in Professionalization

The third typical profile is Chilean mid-sized companies, often family-owned or founded 15-25 years ago, that are transitioning to a professional board, corporate governance, protocols, and segregation of functions.

The OGC assumes the role of the company's Legal Management on a stable basis: defines policies, standardizes standard contracts, implements compliance, accompanies the board, negotiates critical operations, and becomes the organization's sole legal interlocutor.

If over the years the company reaches a scale that justifies adding an in-house lawyer for day-to-day operational tasks, the OGC continues in its strategic and legal governance role, coordinating with that in-house as a General Counsel would with their team.

Startups in Scale-Up and Internationalization Stage

The fourth profile — and one that historically fits best with the model — is startups that have moved past the validation phase and are entering scale-up: Series A/B rounds onwards, accelerated headcount growth, first enterprise contracts, stock option structures, recurring due diligence, and, almost in parallel, expansion to other markets in the region.

At that stage, legal complexity multiplies within months, but the founding team still cannot — and should not — dedicate one of their first senior hires to an in-house General Counsel. The raised capital needs to go to product, sales, and expansion. At the same time, the legal mistakes of this stage are the ones that cost the most later: poorly structured cap tables, contracts with anchor clients with clauses that block the next round, intellectual property issues over the core product, corporate structures that complicate international fundraising, or employment hires that create contingencies in the next due diligence.

The OGC works here with three specific contributions:

• Preparation and support for investment rounds: term sheet review, SAFE/convertible note negotiation, data room, cap table clean-up, and coordination with the fund's lawyers.
• Critical talent hiring and retention: stock option plans, vesting, key employee and advisor contracts, non-compete clauses applicable under Chilean law.
• Regional expansion: international corporate structure (including holdings in Delaware or Spain when appropriate), subsidiary incorporation in target markets with correspondent network, standard contract adaptation, trademark registration, and compliance in each jurisdiction.

The result is a startup that arrives at the next round with its house in order, without the legal scars that are usually discovered in due diligence and end up cutting its valuation or closing speed.

When an Internal Team Is Still Better

The OGC is not for every company. In-house remains the best option when at least one of these conditions is met:

• Extremely high legal volume: massive contracting, daily high-value contracts, permanent litigation.
• Extreme confidentiality: frequent M&A, sensitive internal investigations, information that requires internal confidentiality walls.
• Essential daily presence: industries with constant regulatory interaction or operational areas that require legal physically present in hour-by-hour decisions.
• Regulated company with explicit internal legal obligations.

Additionally, it's usually better to have an internal team (versus OGC) when:

• The legal function is part of the "product" (not just support): when the business model requires continuously designing and adjusting rules and processes where legal is embedded in operations (for example, highly transactional businesses or where compliance and data governance are part of the core). In these cases, the value is not "answering queries" but co-designing decisions alongside product/operations.
• The legal function is primarily governance and internal alignment: if the bulk of the work is articulating criteria and decisions between the board/management/committees, risk, audit, compliance, HR, and finance. Here the work is coordination, prioritization, and permanent internal arbitration (more than a report), and it usually requires in-house ownership.
• Physical presence is required to operate (not just meetings): when the day-to-day requires being physically on-site to unblock decisions and coordinate teams (e.g., plants, work sites, logistics operations, regulated environments with inspections or operational contingencies).

Let's Talk

At CUBILLOS LAMA we operate under the Outside General Counsel model as our main product. We accompany startups, Chilean mid-sized companies, multinational subsidiaries entering Chile, and Chilean companies going international.

If you want to evaluate whether the model makes sense for your company, Schedule your consultation with Cubillos Lama

Your legal department, without the cost of one.