For all the talk of its increasing importance to legal teams across the corporate spectrum, it is incredibly hard to find a succinct definition of the role of legal operations. The best attempts (by CLOC and the ACC) read more like a laundry list of legal department management concerns than a definition.
In this context, I'll offer my own (imperfect) definition:
Legal operations is the application of strategy, project management, process optimisation, data and technology to the continuous improvement of the delivery of legal services by a legal team.
While the aim of legal operations (the continuous improvement of the delivery of legal services) should not be new, the methods and technology being used are. As a result, it is leading sweeping changes to how legal services are being delivered. Whether you are part of a corporate legal team, work in big law or are a part of the growing innovation space within the legal industry - legal operations will affect you. The rest of this article will explore how.
Why legal operations matters for in-house counsel
The number of legal departments with dedicated legal operations professionals is growing. For large legal departments (those with an external legal spend of $50m+ or 51+ in-house attorneys), over 90% responded to a 2017 Thomson Reuters survey to say they had dedicated legal operations professionals. The trend also isn't limited to large departments; 41% of legal departments with less than $4m external legal spend had a dedicated legal operations professional.
This means that as an in-house lawyer, you are likely to come into contact with a legal operations initiative. How this will affect you will vary from company to company. You may have stricter processes for instructing law firms (vendor management in legal operations parlance) and be encouraged to use alternative legal service providers for lower value, repeatable work. You may have more technology at your disposal to deliver value to your in-house clients. You may notice a cultural shift towards delivering business value and demonstrating that delivery with data. You may see new knowledge management systems akin to those you might have experienced earlier in your career at a big law practice.
In short, the role of legal operations is to continuously find better ways to deliver your legal services to the business. By definition, this will have an impact on the way you work.
Why legal operations matters if you work in big law
The increasing prevalence and activity of legal operations teams may have three notable effects on big law practices.
First, law firms should be prepared for their clients to be more proactive when it comes to managing their external legal spend. Lower value items of work may go to alternative legal service providers or be managed in-house with the help of technology. The high value work that you still receive may be subject to billing guidelines (did I hear someone in the back say fixed fee arrangements?), invoice audits and legal bill reviews. You may be asked for more regular billing updates and integration with (ever more sophisticated) eBilling systems. You may also be asked to demonstrate efficiency improvements in your own processes and project management over time (if legal departments are doing this internally, they will expect it of their advisers).
Second, while legal operations may have begun with legal departments borrowing practices from big law the flow of information and practices is likely to switch directions. Legal operations teams can leverage the technical and management skills of their business counterparts. The resulting innovations (and even the process of innovation itself), if successful, will be adopted by big law if it demonstrates the potential to improve profitability.
Finally, some more enterprising teams within big law may look to collaborate with their legal operations counterparts to manage or assist major change projects. This may take the form of a separate business unit similar to the legal tech accelerators many firms have built or it may be driven from current fee earning teams operating in a space that is subject to disruption. Will big law be savvy enough to seize an opportunity like this or will they lose out? I'd be interested in others opinions on this.
Why legal operations matters for alternative legal service providers and NewLaw
We can keep this one short as the opportunity here is clear. Legal operations is looking for efficiencies and new ways to deliver value. There are opportunities both for providers that are willing to provide streamlined, low value, scale delivery of legal services and for those that are looking to deliver legal services under more adaptable business models than the partnership structure of big law. Best practice guidelines for vendor management encourage legal departments to look past traditional big law where appropriate. Make sure you are familiar with these guidelines and the other practices of legal operations to make the most of this opportunity.
Why legal operations matters to legal tech companies
Last, but by no means least, legal operations will lay the framework for the majority of legal technology purchasing by corporates. One of the ways legal operations teams find efficiency is through automation and technology. This is an opportunity for you to sell your products, but you should be prepared for your buyers to be savvy (after all, they may have experience with project management, change management and perhaps even the technology itself).
There will also be an opportunity to assist legal operations teams with their own, custom technology solutions at the enterprise level. This will not be a suitable market for all suppliers but it will be well compensated if it is one you can cater for. Even if larger legal departments with strong IT support may manage technology projects in-house, your expertise and experience in providing similar solutions will be invaluable.
Further sources of information
If I've piqued your interest in legal operations and you want to know more, additional resources can be found from CLOC and the ACC (scroll down for downloadable PDFs). Juro have also created a great ebook on the subject (you will need to provide your details to download the PDF).
Finally, make sure to follow me on LinkedIn for more of my musings on the topic.
**As ever, I'd love to start a conversation with anyone who has read my articles. If you have a comment or opinion, please share it below**