There were protracted negotiations with The Exiles before Smith was released and it is understood a substantial six-figure compensation deal had to be put in place. Smith had more than a year of his contract still to run at Irish, who will now look to forwards coach Toby Booth, former prop Neil Hatley and ex-England centre Mike Catt to steady the ship.
Catt was touted as a possible answer to England's back-play problems, but Lynagh believes the choice of Smith was logical.
Lynagh added: "Martin Johnson doesn't have any coaching experience and to have appointed Catty would have meant two key men in the team were new to the coaching scene. It would have been a massive gamble. Brian is someone who has been the director of rugby at a leading club and that experience will be vital."