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For much of my career as outside litigation counsel, I marked the end of cases with a celebratory client lunch or a sigh of “good riddance.” But when I went in-house with one of my clients, the end of each case was an opportunity to consider lessons the company could learn from the litigation. Now that I have transitioned outside again, at the conclusion of almost every case, l assist my in-house counterpart in developing and implementing lessons-learned. When in-house and outside counsel utilize post-litigation lessons-learned, the litigation cost becomes an investment in innovating the company’s operations.

Debunking the Cost-Center Myth

The current view of many (if not most) companies is that the legal department, and particularly litigation, is a “cost center.” Not only is this view wrong, it divorces the actual cause (i.e. contract review, negotiation, or execution errors, failures to follow HR policies or procedures, lack of internal audit controls) from its effect (litigation). As a result, the “cost center” view conveniently compartmentalizes the “cost” of a company’s errors in the oft-maligned legal department and prevents the company from identifying or correcting the actual cause.

However, at the conclusion of litigation, outside and in-house litigators are in a unique position: they have an extremely broad—as well as microscopically granular—wealth of information. The litigation’s conclusion also provides them the benefit of hindsight. Litigators can see how the initial errors occurred, multiplied, were compounded, and eventually cascaded into litigation, and what their cost was, in real dollars and in human capital. This backward-looking exercise should sound familiar to anyone who has performed a root cause analysis.

Looking Beyond Root Cause

But post-litigation lessons learned are not limited to the merits of the litigation. There other aspects of a company’s operations that impact or intersect with litigation. For instance, a company’s record retention policies and practices could be analyzed in terms of the cost of discovery. Litigation may also reveal a need to develop or improve regulatory training, including HIPAA training for individuals (and legal departments) who handle personal information.

Improving the World, One Company at a Time

Because many corporate clients understand the benefits of root cause analysis, outside counsel should offer post-litigation lessons learned to their client’s in-house counsel. And in-house counsel should view this collaboration as an opportunity to contribute to and improve their client’s operations. The end of a case is an excellent opportunity for outside and in-house counsel to use their litigation-acquired knowledge to improve the world, one corporation at a time.

Image courtesy of Flickr by Joanna Penn.