Law is a business – but for in-house legal departments, the business constraints and opportunities are often vastly different from those available to private law firms. As part of a larger corporation, legal departments have a responsibility to manage costs and generate profit, but they also have an opportunity to leverage the in-house relationship in a way that private law firms do not.
Understanding the Profit Equation
Regardless of which strategies your department implements to improve profit, it is crucial to understand the fundamentals of value creation. In-house legal counsel must make business their second language. They must know the business they serve and its “key players” in value creation at least as well as other business managers.
With this knowledge, legal departments can assess their own position and resources in order to use what they have to the greatest advantage. They can also work to build a team of top producers who can incorporate profit goals into their legal strategies.
Ways to Improve Profit
Four commonly used means of improving profit include:
- Expanding your client base through marketing. Does the entire company you serve know what resources and support you offer? “We have a legal department” isn’t enough. Make sure all the key players throughout your organization know exactly what types of projects they can bring through your doors.
- Cross-sell expertise. If you tackle one legal problem for a client or department, chances are good that the same client or department has other needs that counsel can meet as well. Cross-sell your people’s expertise to develop relationships as well as improve profit.
- Manage billing, receivables, and payables to manage costs. Although most businesses can expect to write off some unpaid bills as “bad debt,” not all “bad debt” is truly bad – some of it has merely fallen through the cracks. Manage billing, receivables, and payables effectively can improve both cash flow and overall profit.
- Make staffing flexible. Bringing a full-time attorney onto your staff when his or her expertise is needed only during “crunch times” may not be the most cost-effective move for your department. Instead, team up with an experienced staffing partner like Assigned Counsel to connect with highly-qualified temporary or contract attorneys who can get the job done without imposing unnecessary costs.
At Assigned Counsel, our recruiters match top candidates with legal departments who need their expertise. We also help our legal-department clients create and implement staffing plans that manage costs, generate profits, and provide the right staff at the right times. If you are looking for legal staffing , contact Assigned Counsel today.