Legal Departments Abandoning Their "Cost-Center" Reputations - Mitratech

Legal Departments Abandoning Their “Cost-Center” Reputations

Corporate Counsel recently published a fascinating article on a new trend within corporate legal departments. Some companies are now using strategic litigation as a method of recouping some or all of their legal costs. By protecting their IP or pursuing claims, several of these legal departments have made up to a half a billion dollars, and have turned their legal departments into revenue streams through what Corporate Counsel refers to as a plaintiff-recovery strategy. Two key industries the article mentions as being early-adopters of this approach are technology and pharmaceutical, which comes as no surprise as companies in these fields are among TeamConnect’s most innovative clients. Pharmaceutical and technology companies have been early adopters because of the sheer volume of complex data the legal departments deal with on a daily basis, but other industries are now following suit. After all, not only does litigation need to be tracked and analyzed, but outside counsel needs to be paid, patents and claims (which can number in the hundreds of thousands) need to be tracked, court dates need to be managed, and contracts need to be organized. With this new litigious approach to legal department management, the amount of time employees spend handling such tasks (which could be used as billable hours elsewhere) can increase exponentially if proper systems are not in place.

Corporate Counsel does take a look at the blemishes in this kind of strategy. Such litigation can sometimes prove to be more of a nuisance than it’s worth, and at worst, can be deemed unethical. The smart approach, according to the article, is to find IP, claims or contracts that meet a systematic set of requirements which prove the matter is worth the risk involved. In order to do so, companies absolutely need robust management and reporting in place to prove that a given matter meets the strategy threshold and is worth pursuing.

While this new approach has its flaws, it is still quite interesting to see the different ways corporate counsel are taking charge of the business and using strategy and foresight to radically alter corporate legal best practices. Our clients have been turning the idea of the legal department as a reactionary cost-center on its head for years, and this new approach of turning legal into a corporate thought-leader is exciting to see.

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