Legal Departments Get Aggressive In Pursuing Recoveries

If you're looking for a quick way to repair the legal department's image as a cost center, try depositing $170 million into company coffers in less than a year. That's what Tom Sager, vice president and assistant general counsel of DuPont Legal at E. I. du Pont de Nemours and Co., has done in 2005.

But that money didn't just fall into his lap. The company's lawyers pursued it bit by bit as part of a plan Sager started at the end of 2003 to transform the legal department from a cost center to a legitimate contributor to the bottom line. Sager engineered this transformation by setting goals for achieving recoveries ($100 million for 2004; $116 million for 2005) and then systematically pursuing actions against suppliers that were engaged in price fixing, companies that infringed on DuPont's intellectual property and business partners that failed to come through on their ends of contracts.

"If you can clearly show the suppliers that there are significant damages, they become eager to pursue a resolution," Gardiner says. "When a government agency has already made findings that collusion occurred and we provide an analysis of our damages, most companies realize they have to do something about it."

In addition to choosing cases that have relatively straightforward proof, GCs must engage in careful risk-reward analysis before deciding whether to pursue an action.

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However, getting businesspeople to recognize the value of implementing a strategic plan to seek recoveries can initially present a roadblock. There remains a stigma on the word "plaintiff," and no company wants to invest money into something that might not generate any returns.

staff Writer

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