Your complete guide to Legal Operations and how in-house counsel teams benefit
There is a paradigm shift happening in in-house legal. Legal experts are now called to give strategic guidance to businesses, side-by-side with strategy, finance, and the C-suite. And so emerged the Legal Operations (Legal Ops) function, which aims to create space for in-house legal experts to focus on the substantive practice of law within the company.
Looking at a broader legal landscape, Legal Operations is not common across global corporates. A survey done by the Association of Corporate Counsel found that as many as 46% of legal departments employed no dedicated Legal Operations employee, whereas around 25% of the legal departments in the survey employed only one Legal Ops professional.
But the good news is that these teams are becoming more common – a 2020 CLOC survey reports a 41% increase in full-time employees in a Legal Ops role. But more importantly, their role is perceived as far more valuable than just administrative work. In fact, 67% of legal departments in the CLOC survey said that Legal Operations act as strategic partners within the legal function.
So, in this guide, we look at all aspects of Legal Ops. We’ll cover its evolving role for in-house legal departments, Legal Ops competencies, how GC and corporates benefit from Legal Operations, and how to scale Legal Operations so that you build a team that delivers strategic legal assistance across your organization.
Table of contents
- What is Legal Operations?
- Role of Legal Operations in a global corporate
- Legal Operations competencies
- Business intelligence
- Financial management
- Firm and vendor management
- Information governance
- Knowledge management
- Organization optimization and health
- Practice operations
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- Project/program management
- Service delivery models
- Strategic planning
- Training and development
- How Legal Operations has evolved
- Benefits of Legal Operations
What is Legal Operations?
Legal Operations (or Legal Ops) refers to a team of dedicated professionals who work to enable in-house legal teams to deliver more efficient services to clients.
At its core, Legal Operations is about capacity-building for in-house legal. This means supporting in-house legal departments through competencies such as information governance, financial management, strategic planning, data analytics, and organizational design.
In practical terms, Legal Operations teams are a mix of experts in finance, data analytics, marketing, project management, and learning and development. They work with leadership on determining strategic areas and then empower or offload in-house legal experts in those areas.
Effectively, Legal Operations helps with the biggest obstacles legal departments face. According to the 2020 Annual Law Department Survey report, the top challenges faced in managing legal departments are:
- Cost containment and savings (60.3%)
- Business process improvements (56.2%)
- Departmental resources (38.4%)
- Keeping up with law department technology (30.1%)
These are precisely the areas where Legal Operations helps create space for more compliant, error-free, strategic work for in-house legal.
Role of Legal Operations in a global corporate
By combining a strategic business approach and legal expertise, Legal Operations covers everything from financial, knowledge, and contract management to information governance, organizational design, and technology support.
Legal Operations departments design, project-manage, and ensure the delivery of more efficient legal services to everyone in the company. As a result, legal departments get to focus on providing strategic legal advice that is aligned with larger enterprise goals.
Ultimately, Legal Operations helps in-house legal to manage risk better, choose and implement the right legal tech tools, and ensure and monitor compliance. In this way, they help the entire business to automate and accelerate manual-but-business-crucial workflows.
Legal Operations competencies
Legal Operations brings a lot of value to businesses, but the function is still (relatively) novel.
As part of the efforts to set industry standards, the Corporate Legal Operations Consortium (CLOC), a global community of experts working on promoting Legal Operations, and building the community of Legal Ops, has developed a 12 pillar Legal Ops competencies framework, called the CLOC Core 12. Here is an overview of each of these competencies and how in-house legal benefits from them:
Data needs to be at the core of business activities. And the same applies to in-house legal. Legal departments today make little use of data (the trend that’s increasing in recent years, but still not near the full potential). With in-house Legal Operations, data becomes pivotal in daily and strategic legal work. In-house legal can then discover trends, spot patterns, make use of hidden opportunities, and improve business outcomes down the line.
Budgeting is one of the top challenges of in-house legal departments. One part of the issue is a lack of connection between spending and outcomes. With sound financial management, Legal Operations builds a transparent budgeting process, which helps plan around future costs and opportunities. At the same time, Legal Operations also improves consistency in budget planning, allowing in-house legal to get the most from the allocated budget.
Firm and vendor management
Legal Operations also helps in-house legal teams to find compatible vendors and partner firms. By looking past traditional pricing models, with a clear, data-driven vendor relationships strategy in place, Legal Ops delivers transparent, efficiency-based vendor deals to in-house legal. This way, legal departments have go-to strategic partners that meet business needs at all times.
In-house legal departments have a hard time keeping up with the volume of data. Disparate information silos result in a lack of big picture data insights, and ultimately companies miss out on data-driven business opportunities. That’s where Legal Ops steps in. By creating best practices for information management, in-house Legal Operations helps legal departments introduce and implement sound data information policies across departments and offices.
As companies scale, there is a need to collect and preserve expertise in a way that everyone can access. Without knowledge hubs or consistent responses on topics, there is a rise in errors in business-critical activities. With Legal Operations taking care of knowledge management, everyone on the in-house legal team, and also the entire company, has access to standardized know-how that helps them make the right business decisions.
Organization optimization and health
Legal Operations helps legal teams come together around a clear vision, allowing each legal expert to work on strategic tasks, develop their skills, and provide tailored mentoring for legal professionals as they advance in their careers. Plus, the goal of Legal Operations is to create a standardized hiring process, that is well-planned, fair, and ultimately assembles an effective legal team that achieves objectives, and is part of an engaging culture.
Many in-house legal professionals are tasked with activities that are not necessarily legal practice in a narrow sense, but that still need to get done. As a result, in-house counsel is thinly spread, working on lower-value tasks. The distraction by operational and often repetitive manual work adds costs to legal work. By introducing Legal Operations, legal departments create specialized teams that take care of areas such as IP management or eDiscovery, freeing up capacity for greater focus on the highest-value tasks.
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With Legal Operations, companies can design and implement company-wide initiatives, successfully running projects across departments. This means that instead of highly skilled lawyers, companies entrust projects to trained project or program management professionals. This way, as Legal Ops engages with project stakeholders across companies, corporate counsel gets to focus on “core” legal work, without having to dabble in project or program management. As a result, the company makes the best use of resources and carries out scalable projects with ease.
Service delivery models
Legal Operations breaks down legal work into granular activities. Then, instead of assigning projects at large and by default to vendors, in-house legal departments route each legal work component to the best-suited partner or vendor. This brings about a more efficient cost structure, as companies can match each component to the best provider in their ecosystem of law firm partners.
Rising workload and dormant legal talent-hiring mean that in-house counsel are often reactive in their work. Instead of working on strategic projects, in-house lawyers are forced to focus on the short term, keeping up with deadlines, while holistic, strategic perspective fades out of sight. As Legal Operations takes the brunt of business-critical work that doesn’t require legal expertise, in-house legal has more capacity to align with the business, incorporate business goals into team goals, connect today’s tasks with long-term priorities, and contribute to a strategic framework.
Securing a budget for legal tech is a priority and a struggle for many in-house legal counsel. In reality, in-house lawyers are forced to carry out repetitive, manual tasks, which is time-consuming, prone to errors, and costly. Often left with disjointed and underused apps that often don’t scale or are not tailored to specific business needs and use cases, legal teams are blocked in their daily work.
With Legal Operations managing legal tech, the entire legal team works under the banner of a joint team tech vision, with streamlined workflows that meet the company’s needs. Legal Operations helps evaluate and select tech vendors and suppliers, anticipate tech stack needs, automate repetitive manual tasks, and incorporate powerful self-service tools for anything from contract management to e-billing, IP or e-signature.
Training and development
As an integral part of a legal counsel’s career, training should be tailored and work to strengthen all other legal ops and legal competencies. This is why Legal Operations also supports in-house counsel training and development, from hiring through to skill-building in emerging areas.
How Legal Operations has evolved
Legal Operations has been around for over thirty years. But its role and scope have changed so much that the function seems as novel as it did back in the early 90s. According to CLOC, the history of Legal Operations is divided into three almost distinct ‘eras,’ which are essentially brushstrokes to help pin the function to a set of key activities it performed historically.
First, before 1990, Legal Operations was primarily concerned with risk management. At the time, Legal Ops dealt with fewer complex issues and mostly managed the external counsel.
From 1990 to the mid-2000s, Legal Ops moved to work on more strategic topics. Rather than focusing on just managing and coordinating outside counsel, Legal Ops began dealing with complex, regulated, and often international issues. Still, the function relied heavily on external partners and started to become more concerned with optimizing legal counsel costs.
The third and current stage, from the mid-2000s all the way to today, sees an entirely different Legal Ops. Today, Legal Operations deals with business and strategic matters, overseeing everything from legal tech budget to information governance, vendor management, and training.
Most importantly, Legal Operations today works to optimize costs, by strategically using workflow automation and helping in-house counsel deliver accurate, more efficient services. Going forward, Legal Ops will continue to provide strategic support to the business at large, working on equal footing with other top-level business functions.
Benefits of Legal Operations
Legal Operations helps in-house counsel on several fronts.
By placing data at the core of all aspects of business, from vendor management to internal processes and policies, Legal Ops creates tangible proof of legal counsel’s value to the business.
At the same time, by freeing in-house legal experts of repetitive tasks, Legal Ops helps in-house legal teams focus on high-impact and strategic activities. Meanwhile, by creating standardized and transparent processes, Legal Ops ensures dedicated and predictable legal spending, which down the line means key resources will go to key projects and activities.
By understanding the business needs of in-house legal on the one hand, and the possibilities of vendors on the other, Legal Operations creates best-suited matches between external partners and in-house teams and also ensures that the tools used are aligned with optimal business processes.
Finally, as legal professionals get more time to do the legal work, operational work gets done by the Legal Ops team, who scale and optimize legal processes – and build strategic partnerships with other business functions, from IT to HR, Finance and Strategy teams.
The value of Legal Operations is becoming more visible, as in-house counsel look to optimize processes and workflows. If you want to learn how you can build self-service apps to provide faster, more accurate legal services, without any coding, get your copy of our no-code guide for in-house legal teams.