Usually, it is better go outside (closer to the touchline) than inside (closer to the middle of the field). This is because if you manage a wall from inside, your back is turned to the rest of the field. What are you missing when you have your back turned to the rest of the field? Especially when a free kick is taken near a penalty area, you would have your back turned to the penalty area and a number of players congregating near or inside the penalty area.

If you manage the wall from outside, you can keep the penalty area and the players in your eye sight while moving the wall backwards or walking to the players in the wall.

Here is a video example of a referee having his back turned to the rest of the field. Nothing happened here. But if something had happened, he would have had to rely on his ARs and fourth official for information.