Does Your Regulated Business Need a Fractional General Counsel?
Regulated businesses in telecoms, fintech and data face a structural legal problem. They operate in sectors where a compliance failure can trigger criminal liability, regulatory enforcement or loss of authorisation, yet most are too early-stage or too lean to justify a full-time general counsel. The result is a gap between the legal risk the business carries and the legal resource it can access.
A fractional general counsel fills that gap. But the model only works if the person filling it has genuine depth in the regulatory regime that governs the business. A generalist commercial lawyer on a retainer is not a fractional GC. It is an expensive way to get the same advice a panel firm would give.
Three models for legal support in regulated businesses
Most businesses in the regulatory perimeter rely on one of three models for legal support: an external law firm panel, a full-time in-house general counsel, or a fractional general counsel on retainer. Each model has structural strengths and weaknesses. The right choice depends on the stage of the business and the nature of the regulatory exposure.
A law firm panel provides deep technical expertise on specific transactions or disputes. It works well for discrete, high-value instructions: a spectrum licence application, FCA authorisation, or a major commercial contract. Where it falls short is on day-to-day regulatory compliance. Panel firms do not sit in board meetings, do not see the operational decisions that create regulatory risk before they crystallise, and do not build the internal compliance frameworks that prevent problems arising. They respond to problems. They rarely prevent them.
A full-time general counsel provides the strategic oversight and institutional knowledge that a panel firm cannot. The GC attends the board, shapes commercial decisions before they are made, and owns the compliance framework. For a business with sufficient scale and regulatory complexity, this is the right model. But for a telecoms operator with 30 staff, a fintech at Series A, or a data business that has just crossed the regulatory perimeter, a full-time GC hire is a cost the business cannot carry.
A fractional general counsel provides the strategic and regulatory functions of a full-time GC on a part-time, retained basis. The fractional GC attends board meetings, builds compliance frameworks, manages the regulator relationship and triages external legal spend. The cost is typically 20-40% of a full-time hire. The trade-off is availability: a fractional GC is not in the office five days a week. For businesses where the regulatory exposure is real but the volume of day-to-day legal work does not yet justify a full-time role, this is usually the most efficient model.
| Law firm panel | Full-time GC | Fractional GC | |
|---|---|---|---|
| Strategic oversight | Limited to instructions | Full | Full (part-time) |
| Regulatory depth | Variable | Depends on hire | Depends on provider |
| Board-level presence | Rare | Permanent | Regular (retained) |
| Compliance framework | Advisory only | Owns it | Builds and maintains |
| Regulator relationship | Transactional | Ongoing | Ongoing |
| Cost model | Variable per instruction | Fixed salary plus benefits | Retained, 20-40% of full-time |
| Cost level | Medium to high (unpredictable) | Highest | Lowest |
| Best suited to | Discrete transactions | Mature regulated businesses | Growing regulated businesses |
When the fractional model becomes the right answer
Five triggers indicate that a regulated business has outgrown ad hoc panel firm advice and needs GC-level support, but is not yet ready for a full-time hire.
The first is crossing a regulatory perimeter. When a telecoms business begins providing electronic communications networks or services and becomes subject to Ofcom’s General Conditions under section 45 of the Communications Act 2003, or when a payments firm requires FCA authorisation under section 19 of the Financial Services and Markets Act 2000, the business moves from a commercial environment into a regulated one. Breach of the general prohibition under section 19 FSMA is a criminal offence carrying up to two years’ imprisonment on indictment under section 23 FSMA. The compliance obligations that follow require someone with regulatory experience to own them.
The second is a first institutional funding round. PE investors and institutional funders in regulated sectors will conduct regulatory due diligence. They will want to see a compliance framework, a regulator engagement history, and evidence that the business understands its obligations. A fractional GC can build this ahead of the raise, at a fraction of the cost of reconstructing it under time pressure.
The third is the first major commercial contract with a regulated counterparty. When a data business contracts with a telecoms operator, or a fintech integrates with a payment scheme, the counterparty’s compliance team will impose regulatory requirements that flow down through the contract. Managing these requires someone who understands both the commercial deal and the regulatory framework sitting behind it.
The fourth is a board request for a compliance framework. When non-executive directors or investors ask “are we compliant?”, the business needs someone who can answer that question authoritatively and build the governance structures to keep the answer current. This is GC work, not panel firm work.
The fifth is international expansion into a second regulated jurisdiction. A UK telecoms operator expanding into an EU market, or a UK fintech passporting into a new jurisdiction, needs someone who can map the regulatory differences and manage the dual compliance burden. A fractional GC with cross-border experience can coordinate local counsel in the second jurisdiction while maintaining oversight of the UK regulatory position.
The differentiator is sector knowledge, not cost
The fractional GC market has grown rapidly. The International Bar Association has noted the shift towards hybrid legal functions combining permanent counsel with fractional and alternative providers. By some estimates, a third of UK lawyers could be working as legal consultants by 2026.
Growth brings a quality problem. Many fractional GC providers are generalist commercial lawyers offering part-time availability. For an unregulated business, that may be sufficient. For a business subject to Ofcom enforcement, ICO investigation, or FCA supervisory review, it is not.
The test is straightforward. A fractional GC for a regulated business should be able to answer three questions without reaching for external advice: what regulatory obligations apply to this product? What would the regulator’s likely response be to this commercial decision? And what is the realistic enforcement risk if we get it wrong?
Answering those questions requires direct experience of how the regulator operates, not just knowledge of the statute book. It requires understanding the regulator’s internal priorities, enforcement appetite and institutional culture. That comes from having worked inside or opposite the regulator, not from reading the published guidance.
Viewpoint
At Bratby Law, the fractional general counsel model accounts for a material share of our practice. We act as fractional GC to telecoms operators, fintech and payments businesses, and joint ventures in regulated sectors. What clients consistently tell us is that the value is not in the cost saving compared to a full-time hire. It is in having someone at board level who has sat on the other side of the regulatory table.
If you are considering whether your regulated business needs external legal support, Bratby Law can advise on the regulatory landscape and whether specialist counsel is appropriate.
The regulatory environment for telecoms, data and payments businesses in the UK is not getting simpler. Ofcom’s General Conditions regime continues to expand. The Data (Use and Access) Act 2025 has introduced new obligations for data processors. The FCA’s safeguarding rules are tightening requirements for payments firms. For businesses at the intersection of these regimes, the question is not whether they need GC-level regulatory support, but whether they can justify deferring it.
Key sources
- Communications Act 2003, section 45 (Ofcom’s power to set General Conditions)
- Financial Services and Markets Act 2000, section 19 (general prohibition on regulated activity)
- Financial Services and Markets Act 2000, section 23 (criminal offence for breach of general prohibition)
- Payment Services Regulations 2017 (FCA authorisation requirements for payment service providers)
- Data (Use and Access) Act 2025
- IBA: How fractional GCs are reshaping legal leadership
For advice on whether a fractional general counsel model would work for your business, contact Rob Bratby at Bratby Law.
