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Are Companies Turning In House Legal Departments Into Profit Centers?

By Robin Enos on May 19, 2011 | Last updated on March 21, 2019

In-house law staff seem to have discovered a radical notion, hitherto anathema to the in-house defense mindset: you can sue people for money.

And if you file and win "plaintiff recovery actions," you might even pay for all or a big chunk of your law department budget.

In at least one recent quarter, Ford offset their entire legal department budget with plaintiff recoveries, Ford general counsel David G. Leitch told The Wall Street Journal.

Plaintiffs' lawyers can only smile, and nod knowingly. Yes, when you sue someone who owes you money, get a judgment or settlement, and collect it, you can make money.

Plaintiff recovery actions can produce hundreds of millions in added revenue for a company in a single year. Revenue that can turn an in-house legal department into a profit center, reports the Wall Street Journal.

The impetus comes as costs accelerate. Companies are trimming legal spending, asking in-house lawyers to do more with less. Individual lawsuits might not have a big impact. But in the aggregate, they can pay for the legal department, and then some, reports the ABA Journal.

Practice areas where in-house firms are enhancing revenue include intellectual property, especially patent litigation. Antitrust suits and environmental/toxic tort litigation can generate revenue also. And evergreens like subrogation and supplier dispute lawsuits will never go away.

"I don't think we start out saying, "Let's go get every dime we can," Leitch told the Journal. Leitch confirmed Ford expanded its "Affirmative Recovery" program in Europe, India and China last year.

Sure you don't go after every dime.

Just call your legal department the King of Torts, corporate America! Plaintiff recovery actions could be a blood transfusion for the corporate law department. 

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