In-House Counsel

Companies Embrace Plaintiff Role, Making Legal Departments into Profit Centers

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Big businesses may be pushing to deter consumer class actions and cap damages, but they do see some value in litigation … as long as they are the plaintiffs.

Businesses such as Ford Motor Co., Tyco International and Michelin are pursuing lawsuits, dispute resolution and threats of lawsuits to bring in more cash, the Wall Street Journal (sub. req.) reports. They are inspired by intellectual property litigation; indeed, patent infringement is one cause of action pursued. But the in-house lawyers also seek damages in disputes with suppliers, insurers and even utilities.

“Such efforts involve a big change in emphasis for in-house lawyers, who have tended to be risk-averse and mostly focused on shielding their company from lawsuits,” the story says.

The corporate embrace of litigation comes as companies are trimming legal spending and asking in-house lawyers to do more, the story says. While individual suits aren’t likely to have a big impact, altogether they can “produce hundreds of millions of dollars in added revenue for a company in a single year, potentially turning its legal department into a profit maker.”

It’s a theme embraced by outside law firms for corporations. Eversheds, for example, has set up a special unit to help in-house legal departments generate income. Crowell & Moring does recovery work for corporations on contingency, and the number of cases it is handling has doubled in the last five years.

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