Having recently returned from this year’s CLOC Institute, the annual gathering of the Corporate Legal Operations Consortium, I was heartened to see revenue recovery begin to get its due as part of the legal operations universe. With the emphasis in legal operations on collaboration — not just across the legal department but throughout an entire corporation — legal operations are a natural jumping off point for revenue recovery programs.
So, the topic did crop up in a few presentations as corporate legal departments continue to search for ways to demonstrate and enhance the value they provide. In particular, Molly Tynan Perry, Chief Operating Officer & General Counsel for Hewlett Packard Enterprise (HPE), explained that a focus on the legal department’s creation of quantifiable business value is a key component of making the paradigm shift for corporate legal departments from cost centers to value centers. At HPE, for example, they are tracking the income attributable to the legal department’s efforts, and they have found that it currently outstrips total legal spend. And HPE has done this through some of the very approaches I have discussed in prior posts, including licensing of IP, brand protection and anti-counterfeiting efforts, and pursuing affirmative recoveries from various contracting parties.
Likewise, with the rise in the use of various metrics and dashboards to track them, some presenters discussed adding a revenue-recovery metric to those dashboards to demonstrate concretely the value contributed by the legal department to the company as a whole. Those metrics could even include items such as definitive cost-savings resulting from the legal department’s work.
At Hub International, the legal department undertook a complete data analysis of all of the company’s leases, which ultimately resulted in a 20% reduction in lease costs nationwide.
With the rise in the use of various metrics and dashboards to track them, some presenters discussed adding a revenue-recovery metric to those dashboards to demonstrate concretely the value contributed by the legal department to the company as a whole.
Another common theme running throughout the CLOC Institute was the need to embrace change and take risks. The pace of change in the legal industry continues unabated, and those individuals and entities who look for ways to be a part of that change, rather than resist it or cling to the “old ways” of doing things, will be best positioned to thrive in the new work processes and structures that are being created.
Revenue recovery programs are an aspect of the changes taking root in corporate legal departments and can provide you with not only a chance to be at the forefront of the changes, but to do so in a manner that can be collaborative and cross-functional throughout the company.
The goal ultimately of all of these efforts relates back to “why” pursue revenue recovery. And one of the reasons “why” that I had described previously related to increasing the stature of the legal department within the company. A legal department that is leaner and cheaper might play well in the short-term, but it is not much of a basis for the long-term value necessary to generate the trust and confidence of your business unit clients in partnering with you to support the business.
Generally, your clients, like you, are looking for ways to grow the overall pie — a focus on revenue recovery is one of the most effective tools in your hands to do just that.