Law Department as a Profit Center: Strategies for Going from Cost Center to Revenue Generator – ACC 2016 Session
The legal department has evolved from the traditional view that it is a cost center or “the department of no.” A panel at last week’s Association of Corporate Counsel annual meeting discussed how legal departments can become stronger partners with their business clients and become a revenue generator – or even a profit center.
The panel featured: James Partridge, senior legal editor, Practical Law, Thomson Reuters; Dolly Davis, assistant general counsel, Litigation, Office Depot, Inc.; Carl Bilicska, vice president licensing and senior counsel, TnT IP; and Thomas Sager, partner, Ballard Spahr, LLP. The discussion focused on three substantive areas to move the department towards generating revenue: building the business case; design and implementation; and measurement and communication.
An organization initially may not be receptive to the legal department developing a program to find revenue because of possible costs and risks associated with it. A business plan that explains the benefits, how the department will manage the risks and costs and demonstrates the potential return on investment can go a long way toward persuading the company’s management to approve and support the program. The business leadership must fully support the program, since the tone from the top will have a significant impact on whether it’s successful.
Designing and implementing a recovery program will depend on each company and its legal department. There is not a one-size-fits-all program as each business is different, but it should be developed with the company’s goals and risk in mind. Additionally, the program should be clearly defined to ensure business clients understand it and the program must have clearly stated strategic goals.
Finally, measurement and communication are vital to ensure the program is successful and is supported. Measuring the results enables the business to track results and find areas of opportunity or avenues to no longer pursue. Communicating with senior leadership and business partners keeps them informed and connected, as well as encourages them to work closely with the legal department in current or potential opportunities.
I caught-up with Partridge after the session to hear more on these strategies for evolving the legal department, which you can watch below.