CEOs and corporations should integrate legal strategy – an often-overlooked competitive advantage – into the core of their business plans, says Business law professor Robert Bird.

“Legal knowledge is the last great source of untapped competitive advantage in organizations, and the corporations that recognize this can unlock a storehouse of value creation that their rivals might miss,’’ Bird says.

Bird lays out the case for the competitive advantage of legal strategy in a new book, “Legal Knowledge in Organizations: A Source of Strategic and Competitive Advantage’’ (Cambridge University Press), which is out today.

“When applied strategically, legal expertise can reveal opportunities for innovation, improve risk management, foster better decision-making, and support a culture of integrity,’’ he says.

Legal Strategy Offers Much More than Compliance Mandates

Take, for example, a company that establishes a strong policy against sexual harassment, Bird says. Instead of ignoring or minimizing sexual harassment concerns, the company prides itself on having zero tolerance and makes support and respect for women a core value of the organization.

“Legal requirements related to sexual harassment and other workplace rules are more than just mandates. They have the potential to transform organizational culture and support women at all levels of the company,” Bird says. “Ultimately, that becomes a tremendous advantage in recruiting and retaining top talent.’’

Legal knowledge holds many other strategic advantages as well, Bird says. A pro-active legal team can minimize risk; create contracts with intrinsic value that build relationships, loyalty, and trust; and merge intellectual prowess with corporate integrity.

Bird says it took about two years to complete the book, but it reflects over 20 years of thought, research, and experience.

“I’ve had an enduring curiosity about how lawyers and other legal experts can make companies more competitive and also more ethical,’’ he says. “A variety of businesses can profit from this guidance, but pharmaceutical, financial services, health care, and other highly regulated industries can particularly benefit.”

The new book also offers a step-by-step guide to implementing legal strategy into a company.

“I think the information in this book can bridge the gap between legal knowledge and business goals,’’ Bird says. “This content is meant to serve the broad business community, from lawyers to aspiring managers to business executives.’’

Legal Expertise No Longer on the Periphery

Bird says he believes this strategy has been overlooked by businesses because of the different perspectives that lawyers and businesspeople have.

“Lawyers tend to be more conservative, and business people are more willing to take risks,’’ he says. “That can be a source of disagreement, but if both sides collaborate with one another there is the potential for a significant value creation.”

Leveraging legal knowledge into competitive value requires a different way of thinking about how the organization works.

“To be effective, leadership needs two things, an understanding of the law and an innovative mindset on how to use it in new ways that capture value,’’ he says. “We need to shed the thinking of the legal team as a static, punitive force, and embrace it as something dynamic, a value generator, and part of a fundamental strategy, that is no less valuable than other business disciplines.’’

Bird emphasizes that legal knowledge must be deployed ethically and in a socially responsible manner.

“Legal strategy is not a license to circumvent legal obligations, but a valuable opportunity to grow an organization that generates superior value for both business and society,” he says.

Bird has been a professor of business law at UConn for 21 years and he also serves as the Eversource Energy Chair in Business Ethics. He earned his JD and MBA from Boston University. A prolific writer, he has authored more than 80 articles in the Journal of Law and Economics, American Business Law Journal, the Harvard Journal of Law and Public Policy and the MIT Sloan Management Review and has received numerous research and teaching awards.