Despite the best efforts of skilled and efficient in-house counsel, the legal department is often seen first by corporate management as a “cost center.” This is especially true in the context of responding to government investigations, where legal counsel is seen to be prohibiting otherwise profitable actions. However, it is these very situations where in-house counsel can truly create tangible value for a business.
In the context of internal investigations, value can be defined as a simple fraction. The numerator is made up of the benefits of an effective investigation, including cooperation credit, minimized criminal and civil liability, control of the business’s public image and so on. The denominator represents the costs of an investigation, driven mainly by legal fees, but also comprised of civil and criminal penalties. Simply put, an internal investigation creates value, if the numerator is larger than the denominator. Thus, in-house counsel can create value by either increasing the benefits, decreasing the costs or a combination of the two.
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