Martindale-Hubbell released an interesting report this morning called “The Profitable Legal Department: How legal departments can prosper by generating revenue for their company.” The report follows the legal departments of DuPont, Tyco and Standard Life and reports on the success of each of their “recovery programs” that take a more aggressive stance to assert the company’s rights through litigation.
The report focuses on “how legal departments can cease to be viewed purely as a cost centre in the company and, instead, can proactively generate (or recover) revenue for the business to the point where it may even become a profit centre.” The theme seems to be that the financial crisis has caused companies to re-evaluate their legal departments and no longer be content with looking at them as purely an overhead expense to monitor compliance, but to revamp the department to be more vigilant in protecting the company’s Intellectual Property and other rights through legal action.
Derek Benton, Director, International Operations at LexisNexis Martindale-Hubbell, says that “The recovery program approach does not advocate increased litigation, rather a change of mindset for the business, from a passive approach of conflict avoidance, to one that asserts its legal rights to ensure that business-to-business agreements are honoured.” Perhaps that is splitting hairs a bit, but the part that caught my eye, and will probably catch the eye of in-house counsel everywhere was the fact that in “2009, four out of five DuPont recoveries were resolved without litigation and most without the need for outside counsel.”
The report concludes that taking an adversarial approach to the company’s rights is good business and it is time for in-house counsel to shift the way the approach legal matters away from defensive, and more toward assertive. “Few CEOs or CFOs will disagree with the concept of taking a proactive stance instead of always being defensive or reactive. Attack is a good form of defence and lawyers should, when possible, be adversarial. That is the nature of their job. It may mean embedding a culture change within their own department and within the business, but a good and successful recovery program will always pay dividends.”
Martindale-Hubbell has a free 36-page report detailing the approaches taken by DuPont, Tyco and Standard Life’s legal departments, including key points from DuPont on how a legal recovery program should be established and operated by a company.