Getting Started in Legal Operations
Whether you’re trying to make personal changes like getting healthier or professional changes like improving the operations of your legal department, the hardest part is getting started. Advances in technology and process improvement are rapidly evolving adding more complexity and confusion, while the existing business is demanding more support from resources already stretched thin. Much like the health industry, the plethora of choices for business and process improvements makes it more challenging to figure out what steps and action will lead to the most impactful and immediate results to your waistline or bottom line.
The legal industry has embraced the fast-growing discipline of legal operations to improve the delivery of services. Legal operations specialists can manage existing solutions, recommend and implement new technology and further improve processes. Both law firms and in-house legal departments are being challenged to transform their approaches to the delivery of legal services to create scalable growth and sustainable success.
As you begin to develop a strategy to establish, improve or scale your legal department there are two fundamental questions you must be able to answer:
1 - Are you maximizing the value of your legal resources?
There is so much efficiency that legal teams are leaving on the table that could be reclaimed by deploying effective technology, better processes, and right-sourcing counsel or alternative legal service providers for all legal activities. Start tackling change and heading down the path of maximizing your existing legal resources by segmenting your existing workload into two categories - foundational and strategic.
Foundational Legal Activities
Foundational legal activities are those that are required to keep the business engine running smoothly. Examples of such activities include reviewing core contracts, organizational compliance and regulatory matters, employment matters, IP filings, and entity and corporate governance management. This is just a short list of activities that have the ability to be right-sourced because of the availability and track record of proven alternative solutions. Overflow work for these activities can be channeled into solutions once you understand the effort and costs. What would happen if a company’s general counsel were to send its head of sales an invoice for legal services rendered to support the “end of period” sales rush? That pain is felt on both sides of the transaction, most often by the lawyers. Or worse, what if resource constraints cause a legal team to fall behind in the foundational activities and such delays lead to regulatory violations or delays in the implementation of strategic initiatives?
Foundational activities are essential to the business but given the array of possible solutions, can be managed to require minimal legal intervention for transparent and measurable processes. The faster a service can be developed into a process, the easier it will be to automate it.
Strategic Legal Activities
Successful businesses need lawyers at the table and working collaboratively. Some businesses have a short-sighted view on the role of attorneys and instead of deploying their legal resources as trusted assets through the course of business or strategic projects, they relegate their legal departments to the back burner until a problem arises.
Without having a complete understanding of the business it would be difficult to develop an effective and informed strategy. Attorneys are skilled at negotiation and mitigating risk but they can also help identify opportunities. Attorneys should be focused on activities where they bring the most value - growing and protecting the business while unlocking the potential.
Strategic legal activities result from issues or events that occur during the course of doing business. Having a trusted advisor with a comprehensive understanding of the business will lead to the most efficient and effective deployment of legal resources, and can minimize the exposure or frequency of “fire drills”.
2 - How well is your legal department positioned to support the mission of your business?
Beyond providing general legal services, in-house legal departments have the capacity to create a cultural impact throughout an organization. Companies that are growing their business and footprint are hungry for operations leaders with a mindset that aligns to the ambitions of such companies. Almost 40% of the Fortune 500 are members of the Corporate Legal Operations Consortium.
One of the best ways to determine the effectiveness of your legal department is to leverage metrics but you can’t measure what you can’t count! Legal teams need processes and systems are required to track work product, resources, responsiveness and spend. Centralizing the intake funnel for all internal legal requests will show the complete picture of all activities and of where bottlenecks may develop inside and outside of the legal team. Having a holistic, objective view enables you to apply impactful resources to the areas where they’re most needed. Cost benefit and ROI can easily be calculated, and baselines are established. Metrics will give insight to costs which ultimately lead to better value for spend, and a better use of lawyer’s valuable time. Having such metrics in hand will better allow legal teams to justify the need for additional legal resources or solutions and also help identify dependencies as well as barriers to streamlining the delivery of legal services.
Both law firms and in-house legal teams should consider exploring legal operations and how to start down the path of implementing legal operations standards and concepts. Law firms must determine how to leverage technology to differentiate themselves in a competitive market. For developing and/or growing companies, building a legal function is essential but doesn’t have to be expensive or resource intensive. Mature companies need to deploy legal resources more effectively and shift the reactive nature of the legal service relationship to being proactive while continually improving and innovating the delivery of their services. Legal operations solutions can help all segments of the legal industry create and prove a better value proposition.