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What is Legal Operations (Legal Ops)?
According to the most reputable source for Legal Operations information, the Corporate Legal Operations Consortium (CLOC) defines “Legal Operations” (or Legal Ops) as a set of business processes, activities, and professionals who enable legal departments to serve their clients more effectively by applying business and technical practices to the delivery of legal services. Legal Ops delivers strategic planning, financial management, project management, and technology expertise that enables legal professionals to focus on providing legal advice. In other words, the Legal Ops team focuses on the business of law while attorneys focus on the practice of law.
Combining all the legal and business activities, processes, and people empowers an in-house legal team to serve their company’s legal needs using a strategic business approach. Unlike standard legal roles who focus on managing the corporation’s daily tasks, Legal Operations teams support in-house counsels with skills like planning, financial management, vendor management, matter management, technology management, and legal data analytics. “What is Legal Operations?” can be answered by addressing the two universal goals of the members which are to maximize efficiency while lowering costs.
What Legal Operations is has Changed Over Time
The specific focus of in-house legal departments was originally to manage and mitigate risks to the business and its staff. As years passed, legal teams were soon called upon to handle more tasks than corporate governance, IP protection, litigation, and outside counsel management. After the mid-2000s, there was a dramatic shift in thinking that required new skill sets to optimize legal teams’ work in areas such as human resources, corporate governance, etc. This facilitated the creation of a more powerful corporate legal department with a broader and more diverse skill set.
As the need for Legal Ops functions evolved, the value of managing legal tasks more like business partners proved that using a legal-business mindset created a more promising path to efficiency, transparency, and cost savings. This brought about a new mindset that demonstrated why the Legal Operations team was adding value to the entire business. The team was becoming more involved with strategizing, improving processes, and innovating rather than simply protecting the business and advising leaders.
Source: ACC 2022 CLO Report
The 2022 ACC report found that 60% of legal departments have added at least one Legal Operations role. Using our Ascent ELM client base, we’ve seen Legal Operations manager job titles in legal departments with as few as five people, but also with a few even smaller. This report shows a 13% growth since 2018. From ACC research in the market, Legal Ops departments maintain around four employees on average.
“What is Legal Operations?” – Defined by CLOC’s 12 Key Competencies
As the use of Legal Operations teams became more accepted into the mainstream, the Corporate Legal Operations Consortium’s (CLOC) “core 12” competencies list, released updates to the original 12 core Legal Operations competencies or functions:
Source: cloc.org
- Financial Management (Foundational Level)
Manage the departmental budget. Track accruals and forecasting. Work with Finance to identify spending trends, potential cost savings, and efficiency opportunities.
- Firm and Vendor Management (Foundational Level)
Create a vendor management program to ensure quality outside counsel support at the right rates and under optimal fee arrangements. Hold regular business reviews. Negotiate fee agreements. Drive governance of billing guidelines.
- Cross-Functional Alignment (Foundational Level)
Create and drive relationships with other key company functions, such as HR, IT, Finance and Workplace Resources. Represent the Legal organization at CLOC.
- Technology & Process Support (Foundational Level)
Create a long-term technology roadmap including tools such as e-billing/matter management, contract management, content management, IP management, business process management, e-signature, board management, compliance management, legal hold, subsidiary management, etc.
- Service Delivery & Alternative Support Models (Advanced Level)
Drive departmental efficiency by leveraging the right resources for the right matters, including using managed services, LPOs, and other service providers and technology as appropriate.
- Organizational Design, Support & Management (Advanced Level)
Deliver improved GC Staff and overall team performance by globalizing the team and creating a culture of growth, development, collaboration, and accountability.
- Communication (Advanced Level)
Work collaboratively across the legal ecosystem to create consistent global processes, from onboarding to complex project management support. Publish regular departmental communications, plan and execute all-hands.
- Data Analytics (Advanced Level)
Collect and analyze relevant data from department tools and industry sources, define objectives to provide metrics and dashboards, that drive efficiencies and optimize spend, etc.
- Litigation Support & IP Management (Mature Level)
Support e-discovery, legal hold, and document review.
- Knowledge Management (Mature Level)
Enable efficiencies by creating seamless access to legal & department institutional knowledge through the organization and centralization of key templates, policies, processes, memos, and other learnings.
- Information Governance & Records Management (Foundational Level of maturity)
Create a records management program including a record retention schedule, policies, and processes. Support Intellectual Property Matters.
- Strategic Planning (Mature Level)
Create a long-term strategy, aligning yearly goals and corresponding metrics.
CLOC established this ranking of the maturity level each legal department maintains to help establish a set of criteria for measurement that all Legal Departments can use. The basis for the levels of maturity is related to how many of these core functions your legal team can handle. Ideally, an effective Legal Ops department can implement and effectively handle most of these functions. As the maturity level increases, efficiency and processes improve along with the team. The idea behind increasing levels of Legal Ops maturity is to empower the Legal ops team to handle the business aspects of law which in turn allows the attorneys and other components of the legal team to focus on their core task of practicing law. Together, the business is more successful!
Building an Effective Team
According to the latest Association of Corporate Counsel (ACC) Law Department Management Benchmarking Report, 54% of legal departments have added the budget for a formal Legal Operations team. As the volitivity of economic and business landscapes increases, the need for Legal Ops is growing to be not an “if” but a “when” decision. “What is Legal Operations?” is often equated to what roles are included in the team’s makeup.
Assembling the right Legal Ops team for your department requires adding personnel with the right skill set to manage the tasks and responsibilities effectively. First, you must understand the business issues and needs. Placing the best staff member into any position is imperative for success but also this person needs to be properly equipped to ensure they are productive in that role. That means, to succeed they need the right technology tools, training, and support.
There are three levels of legal operations and each role has its separate and defined responsibilities.
- The Admin role focuses on the daily management of tasks, such as vendor management, invoice payments, compliance, and reporting.
- The Optimizer role focuses on improving processes and workflows.
- The Strategizer role seeks to maximize the outcomes or results.
Your legal department maturity level, as defined by the CLOC core competencies, helps you understand where your team stands, which can assist you when identifying what role and position should be your next addition to the team.
Choose the Next Role to Hire Based on Needs
It can be overwhelming to try to build a complete team from scratch, and the time investment can be a drain on your internal resources. If you are just starting out (at the admin level), you need a manager more than you need an analyst.
Empower Your Team with Powerful Technology
You cannot answer “What is Legal Operations?” without addressing the need for LegalTech tools to support them. Legal Operations offers many benefits to the organization, but with the right tool set to advance their tasks, they are proven to be even more effective. Numerous industry surveys and reports show that the efficiency and effectiveness of Legal Ops teams are elevated and show significant time and cost savings when technology is applied. The trends show that corporate decision-makers are budgeting to provide those tools more and more. Software solutions such as Enterprise Legal Management (ELM), Intellectual Property (IP) Management, Translation, eDiscovery, and Blockchain offer Legal departments a wealth of resources and data to make their job easier.
Gartner reported that the shake-up felt during the beginning of the pandemic led many business leaders to reevaluate the technology available to their legal team and began to implement tools that not only provided more transparent data to manage the entire business, but also facilitated more strategic, data-driven decisions. Legal Ops professionals understand that legal technology is a game-changer that helps them accomplish their corporate business goals more effectively. One of the most feature-rich software solutions for Legal Ops is ELM because it integrates with the other business unit data streams and provides collaborative analytic information. Our clients rely on these insights to make business-critical strategy with confidence.
Embracing this advanced ELM technology enables process automation, allows Legal Ops teams to break down legal expenses by matter line items, and evaluates their outside counsel and legal vendors by their past performance. A feature of ELM programs is called “Vendor Scorecards” where tasks completed are measured across multiple matters to rank performance and cost-effectiveness. This provides the data necessary for rate negotiations, vendor consolidation, and vendor selection for specific tasks. It’s all about intelligently deciding who will be brought in to handle each task type, all based on recorded historical data analytics.
Questel’s Legal Ops technology solutions and services empower teams to automate manual legal tasks, streamline vendor management, and simplify data analytics and reporting. With advanced technology taking on the manual work and automating processes, your team can handle the increasing responsibilities that so many legal departments are facing. The Legal Ops solutions focused on increasing efficiency and lowering costs are most often known as Enterprise Legal Management (ELM) solutions which include eBilling, Matter Management, and Legal Holds. Applying this technology, Legal Ops can leverage advanced features such as automated invoice review, vendor communication, Alternative Fee Arrangement (AFAs), forecasting & reporting on all matter data, managing vendor performance, and tracking all matter aspects in real-time. Legal Ops is responsible for the efficient operation of the entire legal team, but also can provide a wealth of knowledge to the entire business with the ELM data integrated throughout the organization.
Sharing timely business insights delivered where it has the most positive impact enables legal departments to demonstrate greater value to the entire legal ecosystem. While improving the Legal department, they also advise the entire business ecosystem to make more informed, data-driven decisions. This is how Legal Ops teams utilize legal technology to increase data transparency throughout the business.
When is the Best Time to Answer “What is Legal Operations?”
When exploring “what is Legal Operations,” companies are looking to their Legal departments to help assess how best to protect their business interests and avoid risk, while also playing a critical role in growing the business. The earlier a business puts Legal into a business partner role, the greater the payback. Legal keeps a close eye on the budgets, but they face increasing pressure to do more with less every year. This is precisely why the Legal Operations team was created. Legal Operations teams are tasked with driving efficiency, lowering costs, and creating greater value across the entire business operation.
CLOC shows legal technology as one of the foundational steps in their Legal Ops Maturity Model (see above). Without a doubt, legal technology helps to drive business success. When seeking to provide the tools required, it is important to speak to service providers to ensure the technology meets the needs. Questel is ready to show you the benefits that assist your team in being effective players, driving more successful outcomes across the board. Advanced, user-friendly software and services are the key to being productive quickly, but only when applied by trained users. Questel provides the software and ongoing training for your team at no extra charge. Questel is the leader in Legal Tech solutions and delivers on the promise of efficiency and cost savings with an ROI in year one.
Questel will demonstrate how dedicated Legal Operations technology will optimize your team to be a value-driven business partner. Schedule a meeting to discuss your unique business needs.