In this post, Clarissa Cerda talks about the strategies she used as General Counsel and Chief Legal Officer to turn her legal department from a cost center, into, as she calls it, a “hooray center” for the company. With the assistance of insurance recovery counsel, Clarissa brought in so much money that, one year, the legal department was responsible for a significant amount of the year end employee bonus pool.
Is Cost Cutting the Answer?
Businesses often think of their legal team as a necessary cost that they have to bear. Accordingly, many large organizations, for good reason, pay considerable attention to limiting legal expenditures. Here, much has been being borrowed from the insurance industry. See AIG Announces Its Creating a Legal Ops Consultancy. Cutting costs alone, however, will not turn a legal department from a cost center into a profit center.
Turning a Legal Department Into a Profit Center
One of the critical differences between insurance recovery law and other legal disciplines is that insurance recovery law has the potential to generate significant revenues for the corporation. See Insurance Recovery Lawyers as Profit Centers. With insurance recovery law, incredible results can be transformative for a company. Please watch the video and learn how Clarissa turned the her legal department into a profit center.
Below we have included the transcript of today’s blog post:
How To Run A More Profitable Legal Department
One of the things that I actually like about the partnership that we have with Miller Friel is that we can take the reputation of a legal department being the cost center in a corporation, and we can turn that around and use it as a tool in the chief legal officer’s, or in my case today the chief legal strategist, kit to become a profit center for the company.
We actually had a situation back several years ago where the recovery claims that we pursued with Miller Friel allowed me not only to bring much needed cash at the end of a quarter, when we needed it for the company, but it also gave me and the legal department the added satisfaction of being able to contribute to the employee bonus pool.
Because it was a money that no one expected, and because we didn’t pay a lot of fees to go after it, it was a nice surprise at the end of the year that got added into all of the metrics, and actually resulted in a notable percentage going into the bonus pool. Which meant that every single person got X percent increase in their bonus just because of the work the legal department was to do.
Now, for those of us in the legal department that always hear how we are a cost center or the “saying no” center, it was actually very nice to be in the situation where you were the hooray center. I am very excited to see your work affect the bottom line, and an added bonus to each and every employee.