3 Ways to Structure Legal Operations for Maximum Efficiency
In-house legal departments are being redefined due to a number of internal and external factors. Whether it’s due to mergers and acquisitions, a need to stretch resources across multiple business locations and geographies, or other influences, legal departments are being asked to drive more value than ever before and to do so more efficiently.
“The notion that an in-house legal team should function like an internal law firm is giving way to a vision of the legal department that’s a commercial function—a function that drives economic value for the business. Rigid silos are being replaced by more fluid structures. In-house lawyers are becoming business partners, embedded and able to work across units and specializations,” write the authors of a Deloitte report exploring how legal departments are evolving.
Central to this evolution is the rise of the legal operations team, a business unit that typically sits within the legal function and is focused on growing the effectiveness, efficiency, and ultimately business value of the legal department as a whole. From managing vendor agreements with external legal providers to integrating technologies that can improve how lawyers do their work, legal operations teams are involved in the business aspects of running the department.
Typically, legal operations staff bring deep knowledge of the needs of company lawyers, combined with organizational expertise. While such a foundation is vital, the structure of legal operations is also important to ensure that none of the key buckets of opportunity for driving efficiency are overlooked.
Legal operations teams typically consist of numerous types of analysts, managers, and support personnel. The leader of the group usually reports to the corporation’s general counsel. The number of personnel will likely determine the levels of organizational hierarchy within legal operations.
That said, establishing formal legal operations teams is still an early initiative for many companies, with over 85% of such units consisting of five or fewer staff members, according to an annual report on the state of legal operations. This means that to provide maximum value, the same individual must focus on several of the core competencies identified by the Corporate Legal Operations Consortium as being the crux of legal operations.
To streamline and deliver maximum process improvements and efficiencies, consider breaking these top-level competencies into the following three multidisciplinary areas of focus:
Across the enterprise, technology offers one of the most powerful opportunities currently available to drive cost and process efficiencies, improve the accuracy of work, and push other valuable improvements forward. Whether it’s automation, machine learning, collaboration platforms, or other innovations, advances in technology are enabling businesses – and legal departments – to do more work, and to do better work, than ever before.
Within the legal function, some of the top opportunities to drive improvements lie within the following technologies:
Automation to speed the tedious manual work of contract onboarding, review, reporting, speed finance approval processes, etc.
Contract analytics to reveal insights, best practices, and contracting trends
Artificial intelligence to enable automation, identify contract risks, and other benefits
But onboarding and managing new technologies is not a simple, one-time endeavor. It requires insight into what legal departments need, the challenges and benefits of existing workflows, processes, and tools, deep knowledge of compliance requirements and other limitations, and, yes, technological expertise and awareness.
Within legal operations teams, the individual responsible for technology combines these attributes, working with internal partners within legal operations and the legal department, and cross-disciplinary partners within their organization such as IT to identify, integrate, and manage technologies that improve the delivery of legal services. This may include building a business case for new technologies, working closely with data governance leads, and creating onboarding and training programs as new solutions are implemented.
2. Service Delivery
According to Deloitte’s report, the siloed legal department is a thing of the past. To most effectively realize the full value of in-house counsel, legal services are evolving to play a more central role within business operations. This requires a focus within legal operations teams on cross-functional alignment, working with other business units to develop and meet higher-level strategic objectives. This aspect of legal operations also includes the development and implementation of roadmaps for optimizing the legal department’s organizational structure and capabilities to best deliver services that meet the needs of the company as a whole.
Legal operations are not only about shaping the legal department of the future. As the unit responsible for all non-legal aspects of the department, legal operations supports the ongoing functioning of the team. This includes all aspects of regular operations, such as finance-related tasks like budgeting and invoice approvals; vendor management, including business reviews and the negotiation of fee agreements with outside counsel; and tracking and reporting on the legal team’s performance against objectives.
The multidisciplinary nature of legal operations and the dual need to both support the current state of the team and to future-proof the unit means there will likely be frequent overlap within these buckets. But by considering these three main needs in structuring legal operations, teams can ensure they are focusing on the right things to drive maximum efficiency – both now and as the department evolves.