When a business grows from a few dozen to a few hundred staff, its contracts, employment relationships and compliance obligations grow too. Yet the legal function often stays at the level of “ask a lawyer when something comes up”. As a result, obligations that come with size are missed, everyone drafts contracts their own way, and important decisions have no one checking the risk. The question is not only in-house or outsourced. It is how the legal model should change at each stage. This article sets out a roadmap for three stages: 20–50, 50–100 and 100–200 staff. It covers the minimum legal work, the signs that it is time to hire your first in-house lawyer or set up a legal department, and how to run a hybrid model without paying twice for the same work.
- There is no single right legal model for every business. The right structure depends on headcount, number of transactions, sector and risk tolerance.
- An employer with 10 or more employees must issue written work rules and register them with the provincial labour authority (Articles 118 and 119, Labour Code 2019).
- 20–50 staff: use an internal point of contact who does this alongside other duties, plus an external legal provider. Focus on standardising contracts, employment and signing authority.
- 50–100 staff: hire your first in-house legal officer when legal work comes up every day and you need someone on site to coordinate and keep records.
- 100–200 staff: consider setting up a legal department when volume, conditional business lines or confidentiality require it. Specialist work should still go to external partners.
- A hybrid model only works when roles, the hand-over process and response times are written down clearly from the start.
1. Why should the legal model change as headcount grows?
Once a business passes a few dozen people, several people sign contracts, several departments collect data, and no single person controls all HR decisions. The risk at this point rarely comes from one big lawsuit. It comes from small, repeated tasks that no one is responsible for. Some legal obligations are also tied directly to the number of employees. If you add staff without updating your compliance records, you can easily miss an obligation without knowing it.
Criteria for small and medium-sized enterprises by number of employees
Article 5, Decree No. 80/2021/ND-CP (guiding the Law on Support for Small and Medium-sized Enterprises No. 04/2017/QH14): a small enterprise has an annual average of no more than 100 employees participating in social insurance (trade and services: 50); a medium-sized enterprise has no more than 200 (trade and services: 100). This is assessed together with the revenue or total capital criterion.
Analysis: the 20–200 staff range almost matches the group of small and medium-sized enterprises. These businesses have real legal needs but often not enough volume to keep a full legal department. So it makes sense to invest stage by stage.
| Stage | Typical legal profile | Suggested model | Who acts as point of contact |
|---|---|---|---|
| 20–50 staff | Contracts mostly on templates; employment relationships start to need internal rules; signing authority is still concentrated | Mainly outsourced, with an internal point of contact who does this alongside other duties | An admin and HR officer or the chief accountant |
| 50–100 staff | Contracts every week; the first labour disputes; more personal data | Transition: an expanded outsourced service or the first in-house legal officer | In-house legal officer (if hired) |
| 100–200 staff | Varied transactions; several layers of internal rules; possibly conditional business lines | A complete hybrid model or a lean legal department | Legal team leader or head of legal |
2. 20–50 staff: what is the minimum legal work?
At this size, the aim is not to build a structure. It is to make sure the business meets its basic obligations and has a minimum set of tools so staff can get things right themselves. Three areas come first: employment records, template contracts and signing authority.
Work rules from 10 employees
Clause 1, Article 118, Labour Code 2019 (Law No. 45/2019/QH14): the employer must issue work rules (nội quy lao động); if it employs 10 or more employees, the work rules must be in writing. Article 119: an employer with 10 or more employees must register its work rules with the labour authority under the provincial People’s Committee within 10 days from the date they are issued.
Contractual penalties in template contracts
Article 418, Civil Code 2015 allows the parties to agree a contractual penalty (phạt vi phạm). For commercial contracts, Article 301, Commercial Law 2005 caps the penalty at 8% of the value of the breached part of the contractual obligation (except in the case in Article 266).
Analysis: a business with 20–50 people rarely has enough work for a full-time legal officer, but it badly needs someone to “keep the legal book”. An effective approach is to give an existing staff member (admin and HR, or the chief accountant) the role of point of contact: collect requests, keep records and track deadlines. Drafting, review and advice are handled by an external legal provider.
Template contracts downloaded from the internet or inherited from partners often have penalty clauses above the legal cap. Standardising a few frequently used templates early stops the same mistake being repeated across dozens of transactions.
Minimum list for the 20–50 staff stage
- Written and registered work rules; consistent employment contracts and pay and bonus rules.
- A set of template contracts for repeat transactions (purchasing, sales, services, confidentiality).
- A signing authority table: who may sign which type of contract, up to what value, under which power of attorney.
- One central folder for corporate legal records, signed contracts and licences.
- A deadline calendar: contracts about to expire, licences to renew, periodic reporting obligations.
3. 50–100 staff: when should you hire your first in-house legal officer?
This is the turning point. Contracts no longer follow templates, departments ask legal questions several times a week, and the first complex employment cases appear. Signs that it is time to hire your first in-house legal officer:
- The part-time point of contact spends most of their time on legal work.
- Many requests need an answer the same day and depend on internal context that an outsider cannot pick up quickly.
- Records are scattered, and no one knows which version of a contract is final.
- Labour discipline, workplace dialogue and restructuring happen more often.
- Customer and employee personal data is growing and needs daily monitoring.
Labour obligations that need regular follow-up
Article 63, Labour Code 2019: the employer must hold workplace dialogue at least once a year, in addition to dialogue on request or for specific matters as required by law. Article 122 sets the principles and procedure for labour discipline: the employer must prove fault, ensure the right of defence, involve the employees’ representative organisation as required by law, and make minutes.
The Law on Personal Data Protection (Law No. 91/2025/QH15) took effect on 1 January 2026. It applies to both customer and employee data.
Analysis: procedural mistakes in discipline or missing dialogue records usually do not come from not knowing the law. They happen because no one is responsible for keeping track. The first in-house legal officer is most valuable as a coordinator and process controller, not as someone who handles every specialist issue alone. If you are not ready to hire, you can upgrade your outsourcing agreement (wider scope, response-time commitments, periodic reports). A detailed comparison of the two options is in the article “In-house or outsourced legal”.
Hiring the right first legal officer
- Prefer practical experience in commercial contracts and employment and the ability to work across departments over a narrow specialist.
- State clearly in the job description that the role coordinates with the external legal provider.
- Have this person report directly to the General Director, so they stay independent when flagging risks.
- Hand over the template contracts, signing authority table and compliance calendar straight away.
4. 100–200 staff: when should you set up a legal department?
For a private business, setting up a legal department is mainly a management decision based on actual needs. Do not do it just because the business is “big enough”. The table below suggests qualitative criteria for management to consider.
| Criterion | Self-check question | Suggestion if the answer is “yes” |
|---|---|---|
| Volume | Is one in-house legal officer often overloaded, with many tasks delayed or sent outside? | Add a second person and form a team or department |
| Sector | Does the business operate in a conditional business line subject to frequent specialised inspections? | You need someone to track licences and business conditions continuously |
| Cost | Has spending on external legal services risen steadily over several periods, mostly for standard work? | Bring standard work in-house and keep specialist work with external providers |
| Confidentiality | Are there trade secrets or technology to which access must be kept to a minimum? | Handle more sensitive files internally |
| Governance | Is the business raising capital, or does it have many members or shareholders or many affiliated companies? | You need an internal point of contact to manage governance records, resolutions and related-party transactions |
Related-party transactions
The Law on Enterprises No. 59/2020/QH14 (amended by Law No. 76/2025/QH15) sets conditions and approval procedures for related-party transactions in Articles 67, 86 and 167. These issues often arise when a business has many members, shareholders or affiliated companies.
Analysis: a legal department at this size should be lean (usually 1–2 people). It coordinates, controls processes and reviews standard transactions. Litigation, restructuring, specialist tax and intellectual property should still go to external partners. Building a large department to do everything yourself tends to create high fixed costs while you still have to outsource the hard work.
5. How to run a hybrid legal model effectively
A hybrid model is when the business has in-house legal staff (one person or a small team) and an external law practice that supports it on an ongoing basis. The biggest advantage: the in-house side understands the context, and the external side brings specialist depth. The biggest risk: unclear boundaries, so work is done twice or not at all.
| Area | In-house legal | External legal partner |
|---|---|---|
| Low-value template contracts | Review and approve under the procedure | Build and periodically update the templates |
| High-value, non-standard contracts | Summarise the context and commercial goals; hand over the file | Review and propose a negotiation approach |
| Employment | Keep records, run dialogue, prepare minutes | Advise on complex cases, handle disputes |
| Personal data | Run day-to-day processes, receive requests | Build the policy framework, carry out periodic reviews |
| Disputes, inspections | Point of contact for information, gather documents | Advise on strategy, represent the business within the scope of authorisation |
Hand-over process between in-house and external legal
- Departments send requests through one single channel.
- In-house legal sorts them: standard or complex.
- Standard work: handled internally under the procedure.
- Complex work: summarise the context and pass it to the external partner.
- The partner answers within the agreed time.
- In-house legal makes the final decision, files the records and updates templates.
Representation and authority to sign
Articles 142 and 143, Civil Code 2015: a transaction made by a person without authority to represent, or beyond the scope of their authority, in principle does not create rights and obligations for the person represented, except as provided by law (for example, if it is approved).
Three things to write down as soon as you run a hybrid model
- A role table like the one above, linked to the scope of work in the legal services contract.
- Response-time commitments for routine and urgent work, agreed by both sides to fit the pace of the business.
- A signing and approval authority matrix, so legal can control who signs what and avoid transactions beyond authority.
There should also be a periodic report (monthly or quarterly) summarising work done, open risks and proposals to improve processes.
FC Legal can act as your legal department in the early stage, or as a specialist partner to your in-house legal staff in a hybrid model, with a clear scope and periodic reports.
6. Where should a business start?
Before hiring anyone or signing a services contract, the business should know clearly what it is missing. An overall legal assessment answers two questions: where the current risks are, and how much legal work there really is. Only then can you choose a suitable model, instead of deciding on gut feeling.
Assessment roadmap before choosing a model
- Count current employees and the expected number over the next 12 months.
- Count the contracts and legal requests each month.
- Review employment records, template contracts and signing authority.
- Identify conditional business lines and the personal data you process.
- Rank the risks by priority.
- Choose a model and make a 6–12 month plan.
You can carry out these steps yourself, or use FC Legal’s Legal Health Check service for an independent report. Related articles worth reading: “Contract Health Check: 12 signs your contract system…”, “Authority to sign commercial contracts” and “Personal data compliance check: a 20-point Legal Health Check”.
7. Frequently asked questions
At what headcount should a business have an in-house legal officer?
The law sets no general threshold requiring a private business to hire legal staff. In practice, many businesses start to consider it at around 50–100 staff, when legal work comes up every day and someone on site is needed to coordinate. The decision should be based on workload, sector and level of risk, not only on headcount.
Does a business with fewer than 10 employees need work rules?
Under Article 118, Labour Code 2019, the employer must issue work rules. Only an employer with 10 or more employees must have them in writing and register them under Article 119. A business with fewer than 10 employees still needs to agree on labour discipline and material liability in the employment contracts.
Is a hybrid model more expensive than outsourcing only?
Not necessarily. The cost depends on how roles are split. If in-house staff handle standard work and only pass complex work outside, the total cost can be more reasonable than outsourcing every task or building a large department. If the boundaries are unclear, the business can easily pay twice for the same work.
Who should the first in-house legal officer report to?
Directly to the General Director or the most senior executive. Placing legal under sales or purchasing tends to reduce its independence when it needs to flag a risk. In a business with a Board of Directors, you can add a periodic reporting line on governance matters.
8. Legal basis and references
- Labour Code 2019 (Law No. 45/2019/QH14): Article 63 (workplace dialogue), Articles 118 and 119 (work rules), Article 122 (principles and procedure for labour discipline).
- Law on Support for Small and Medium-sized Enterprises 2017 (Law No. 04/2017/QH14) and Decree No. 80/2021/ND-CP (Article 5, criteria for small and medium-sized enterprises).
- Civil Code 2015 (Law No. 91/2015/QH13): Articles 142 and 143 (representation), Article 418 (contractual penalty).
- Commercial Law 2005 (Law No. 36/2005/QH11): Article 301 (penalty cap).
- Law on Enterprises 2020 (Law No. 59/2020/QH14), amended by Law No. 76/2025/QH15: Articles 67, 86 and 167 (related-party transactions).
- Law on Personal Data Protection 2025 (Law No. 91/2025/QH15), in force from 1 January 2026; Decree No. 356/2025/ND-CP.
Outsourced legal support with FC Legal
Ongoing legal support. Scope and fees are agreed to fit each business’s needs. We review contracts, documents and day-to-day transactions; standardise governance records and internal procedures; and work alongside your in-house legal staff if you already have them.
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This article is for reference and reflects the law in force at the time of publication. For legal advice on a specific case, please contact an FC Legal lawyer.
Prepared by the FC Legal legal team. Content reviewed by the Managing Lawyer of FC Legal. Updated 4 October 2026.
