I. What is legal operations?
Legal operations or shortly legal ops is not a new concept. It is obtaining more and more worldwide recognition in the legal sector as law firms and legal departments constantly seek ways to create operational efficiencies in their legal teams.
Legal operations refer to the improvement of the operations of law firms and legal departments, through the optimization of all their management processes. However, as much as it is the role of the area to ensure the best possible progress of the activities of the office or legal department, the functions of the legal ops team do not directly involve advocacy activities.
According Corporate Legal Operations Consortium (CLOC) which is a global community of experts focused on redefining the business of law with aim to help legal operations professionals to collaborate with each other and with other industry players, including law firms, technology providers, and law schools. CLOC works to help set industry standards and practices for the profession. It set definition of legal operations as ‘‘a set of business processes, activities, and the professionals who enable legal departments to serve their clients more effectively by applying business and technical practices to the delivery of legal services. In simple terms, legal ops provide the strategic planning, financial management, project management, and technology expertise.’’
Legal operations offers a fundamentally new approach to how legal services are delivered. It is a multi-functional practice focused on the CLOC Core 12 function areas that provides guidelines on how a legal organization’s operations department can grow.
According to CLOC, in the quest for greater efficiency in legal operations, the presence of 12 competencies would be essential. Therefore, the latest enhancements to CLOC’s CORE 12 functional areas include:
- Technology: As emerging problems in the legal department are a reality, the ideal solution is to try solving them with the support of technology. Technology can handle tasks such as contract analysis, intellectual property asset management, documentation management and many more.
- Business Intelligence (BI): Business Intelligence competence brings information-based decision-making and for that it uses technology as a source of data generation with purpose to adopt information based decisions.
- Financial Management: Legal ops software can enable monitoring legal department`s budget spending through identifying spending tendencies and possible cost savings.
- Firm and Vendor Management: This competency involves building valuable relationships with external vendors in order to negotiate better rates and pricing and also prevent the risk of conflict in the future.
- Information Governance: The information governance competency implies planning functional information policies that make it easier to access and manage documents and also support intellectual property matters.
- Knowledge Management: According to CLOC this competency permits efficiencies by creating easy access to legal and department institutional knowledge (such as information on changes in legislation) through the organization and centralization of key templates (for contracts or individual clauses), policies, processes and memos.
- Organization Optimization & Health: It aims to build an effective and motivated high performing team, to establish a health organizational culture and also help elaborate policies that ensure workers work/life balance and rights.
- Practice Operations: Practice operations in legal operations is related to the need for each team member to be focused on their role to achieve greater efficiency. What usually happens is that lawyers perform operational tasks, which, for better team productivity, should not happen.
- Project/Program Management: This competency involves the legal operations team ability to manage projects, and programs and workflows at scale and fast without losing work quality.
- Service Delivery Models: Law firms and legal departments must have a variety of service providers that complement the work performed by the legal ops team, in order to complement the efficiency capacity.
- Strategic Planning: It involves setting long-term strategic goals, aligning them with business needs and with the priorities of stakeholders (internal and external).
- Training and Development: This competency relates to the training plan and career development strategies designed by the legal ops team to strengthen employees skills.
II. The main benefits of legal operation
By understanding what legal operations is and what it does, one quickly realize how its implementation is decisive to respond effectively to the new and growing demands of the legal segment. This area assists lawyers on several fronts, so the potential benefits are wide and significant, including:
Legal operations solutions free up legal professionals, so they can concentrate on more meaningful legal work
One of the main benefits is to free lawyers from more operational, repetitive and manual tasks, by identifying processes and tasks that are appropriate for automation and then proceed with the implementation of the proper technology to achieve these objective. Thus, allowing legal practitioners to focus on strategic and high-impact activities in their legal practice. This improves performance and creates a more functional and efficient work environment.
Legal workflow automation
Legal Operations is dedicated to improving and automate workflows for higher-quality work, reducing the amount of time that lawyers spend on legal tasks, such as preparing contracts and drafting standard documents. The Benefits of legal workflow automation can be as simple as automatic sending email reminders to clients and as complex as improve efficiency, minimize risks, eliminate errors, increase profits, and provide more value to the business.
Data – drive efficiency
Data helps legal departments prepare and manage strategy through understanding the organization’s legal needs and spending, allowing them to make more informed and calculated choices about how they provide legal services and tackle problems.
With this data, the legal operations team ensures a complete view of the processes. Therefore, it is possible to detect bottlenecks – for example, missing court appearances and deadlines is a bottlenecks and it means the law firm may have a problem with the calendaring system – identify opportunities to implement technology, predict patterns for tasks automatization sake and monitor metrics, like revenue per lawyer, revenue per client and time utilization rate, in favor of continuous improvements.
Besides, to centralize information and computerize workflows, one also need to digitize contracts, documents, and processes. Remember that technology is inherent to legal operations, and this requires that all data be standardized in the digital environment.
Better cost controls of the legal team
As time is money, the fewer hours spent performing administrative activities or activities that can be automated using technology, the more money is saved from legal cash flow. In addition to savings, cost reduction can reflect on investment for the business and greater financial return in the medium and long term.
III. How to build a legal ops department?
To build a legal ops department it would be helpful to embark on an initial three-step process involving strategy, identification, and data.
Having a well-defined strategy is the best way to coordinate short, medium and long-term goals. Having a strategy provides a framework to help prioritize and understand which problem should be solved first.
The identification step begins with the recognition of activities that are exclusive to advocacy and activities that are typical of legal management. Then, identify the tools, processes, and technologies that the legal department or law firm already uses and those that may be missing. Subsequently, gaps must be identified to prioritize what needs to change first, such as workflows, available budget, the need or not to create new positions and functions, training of professionals in this field, alignment of stakeholder expectations (customers, shareholders, employees, suppliers, etc.).
And finally, the data. Ever heard that data is the new oil? Well, data is vital, as one of its main benefits is the ability to make more assertive decisions. Having enough of quality and quantity of data is thus essential for successful implementation of legal ops strategy.
As described throughout the article, legal ops has the purpose of transforming the efficiency of delivering of legal services through people, processes and technology.
Law firms and legal departments which set up an effective legal operations team can gain important benefits such as higher quality of legal work because it enables in-house lawyers to return to their primary focus of practicing law instead of worrying about activities related to contract management, accounting, payroll and so on.
An operations team leads to achieving cost and time savings as allows the law firms to use legal resources more efficiently. Furthermore, legal operations also assist in data orientation, so it becomes faster to discover trends, identify patterns, take advantage of hidden opportunities.
So, given these benefits, we can say that legal ops is essential to generate greater operational efficiency, in addition to being responsible for transforming legal departments into value creators, rather than a cost center, as it is often presented.
This article was prepared by Adriana Mendonça.