Can an overhead be turned into a profit centre?
By Richard Parnham Many general counsel claim they can “add value” to a company’s business, and help it become more profitable. But now, radical reforms to the English and Welsh legal profession promise to take this proposition to its logical extreme – turning a company’s legal function into a fully-fledged profit centre. When general counsel claim they can “add value” to a company’s bottom line, they typically mean something very different from their colleagues in sales and marketing. Unlike their commercial counterparts, whose job it is to boost their employers’ profits and market share, “adding value” in legal terms normally means “minimising liabilities” or “reducing legal costs”. In most companies that have them, the legal department remains a valuable – but expensive – cost centre. But radical reforms to the legal market in England and Wales may soon change all that. In a development that is being watched by governments and bar associations around the world, corporations and othe
