2022 Legal Operations Field Guide
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It’s no secret that clear processes and specializations help businesses get more done. From marketing to finance, the majority of departments structure their teams around individuals’ core strengths. This allows them to stay focused, effectively distribute work, and achieve lofty goals as a result.
Yet, this type of specialization usually isn’t the case for in-house legal departments. In-house lawyers and the team members who support them are asked to juggle everything from managing vendors to negotiating new contracts to finding records. Because everyone is forced to be a generalist, in-house legal teams often find themselves dealing with disjointed processes and added stress.
Thankfully, many in-house legal teams are beginning to realize that responsibilities like financial management, technology support, analytics, and record management can—and should—be handed off to legal operations professionals.
Stagnant budgets and increasing workloads have also led teams to turn to legal operations for answers. How can legal departments deliver better work faster, but without additional resources? What’s the best use of a lawyer’s time? How efficient is a legal team relative to legal teams at other companies? What do good legal operations look like?
This guide addresses those questions and provides a roadmap for developing your own legal operations team, whether you’re starting from scratch or hoping to scale your existing legal operations function.
We’ll show you:
- How to prioritize your projects
- How to track your progress
- How to develop your team
- What to look for when hiring
It’s easy to talk about transforming a legal team, but the reality is that actually doing it requires buy-in across the organization and a long-term commitment to bringing outdated practices up to date. Defining concrete goals early on helps keep everyone on the same page and guarantees long-term success.
Making the case for legal operations
Forbes reports that Fortune 100 companies spend an average of $185 million annually on legal services, while Fortune 500 companies spend about $154 million a year. Relatively smaller Fortune 1000 businesses spend approximately $96 million on legal services every year.
However, businesses often struggle to balance their need for a flexible, nimble legal department with their need to manage expenses and reduce spending. Finding a way to keep costs low and still get personalized legal advice is difficult.
That’s where legal operations come in. A great legal operations strategy can help your in-house legal team focus on the right things and increase their professional happiness in the process. It’s a win-win.
But even if you’ve bought into the value of legal operations, there’s still work to do. As an in-house lawyer or legal professional, how can you convince your organization to make an investment in legal operations?
1. Leverage social proof
Lawyers are competitive, and so are your executives. Those at the top often look at what other people are doing and want to be sure they’re keeping up.
Find other companies in your space that have embraced legal operations, introduce their leaders to your execs, and let them talk to each other. GCs who made an early investment in legal operations know it’s paying off. They’re ready to tell everyone how great their department is and how far they’ve come—so help your leadership team make those connections and let their peers do the selling for you.
2. Validate the investment
If you’re considering legal operations for the first time, you may be wondering, “Are we really ready for legal operations? How do I know the value will be there?” Even if you already have a legal operations function, it can be difficult to advocate for the budget necessary to expand your team without hard evidence that the return will be there.
One of the easiest ways to validate an investment in legal operations is to consider the value of your legal team’s time. There are probably a ton of things your lawyers are working on that aren’t the best use of a lawyer’s time—but it’s work that needs to happen and that’s important to the company.
Maybe they’re doing budgeting, outside counsel negotiations, and rate negotiations. Maybe they’re doing headcount planning, systems evaluations, and implementation.
Maybe they’re trying to figure out what to outsource, what to insource, what to automate, and how to respond to regulatory requests and cross-functional initiatives.
If there are clear areas where you know your lawyers aren’t necessarily the best suited to own those tasks, hire a legal operations professional who can focus on it instead. This will allow your lawyers to spend their time on more high-value projects suited to their expertise.
Setting short-term and long-term goals
Advice from Mary O’Carroll, Ironclad Chief Community Officer, and former Director of Legal Operations at Google:
“It’s about balancing strategic planning with the ability to pivot when needed. Think about where you are now, where you want to be at the end of the year, and what the path is to get there. Your job as a legal operations professional is to think about the top initiatives that are going to get you from Point A to Point B.
You also have to plan while knowing that, in this role, everything changes. So you can’t just get stuck on, ‘These are the four things I’m going to work on tomorrow.’ It’s going to be a different story. There’s a new regulation. There are new priorities in your company. Your competitors are doing things that are different. Your company has to react, your legal department has to react, so legal operations has to, too.”
The goal of legal operations should be to improve both the quality and quantity of your legal team’s outputs—whether that’s measured in contracts processed, legal risks remediated, or average time to issue resolution.
Put simply, legal operations make legal teams more efficient by reducing the time lawyers spend on non-legal or easily automated tasks. To accomplish this, it introduces structural and process improvements that emphasize consistency, metrics, and knowledge management.
Consistency in this context refers to everything from scheduled check-ins to process automation. The goal here is to minimize the number of “fire drills” that result from one-offs and last-minute consultations. This helps turn your department from one that’s purely reactive to one that’s proactively working on long-term, strategic initiatives.
The end goal is to have legal operations handle tasks like financial reporting and vendor assessments—tasks that are rarely well-organized and executed. Automation and centralization are two ways to ensure consistency, but they are not ends in themselves (automation for automation’s sake, for example, can be more trouble than it’s worth).
The measure of legal operations’ success is its ability to improve the department’s speed, quality, and cost of legal services delivery.
Metrics are an integral part of legal operations. They can be used to ensure accountability, identify weak spots, and demonstrate value to leadership by speaking the same language as the rest of the business. If you’ve worked in a legal department before, you know that each of these objectives can be maddeningly difficult. By tying metrics to company goals, legal operations can help legal spend its time on what matters most to stakeholders, whether that’s accelerating contract signing or minimizing compliance risks.
Knowledge management refers to the organization of documents, notes, process information, templates, and other department resources. It’s not enough to store this information in a central repository; the information should also be searchable, clearly versioned, and synchronized. Otherwise, your team runs the risk of referencing outdated materials (which creates all sorts of business and compliance risk) or wasting time trying to dig up records from inboxes.
Legal cannot scale without legal operations.
The conventional response to increasing workloads has been simple: hire more lawyers or outside counsel. Today, many companies are becoming increasingly aware of a different approach—hiring individuals who can act as force multipliers in a department by facilitating growth and innovation.
Legal departments may be late to the game, but they’re quickly making up for lost ground. Virtually unheard of in the mid-2000s, legal operations roles were found in nearly 50% of companies surveyed by The Association of Corporate Counsel (ACC) in 2016. The ACC study also estimated that the number of companies with legal operations teams more than doubled between 2015 and 2016¹. Another survey showed that over 90% of large legal departments (defined as having $50M in spend and over 51 lawyers employed) now include legal operations².
If organizations do not adopt new strategies to handle their contracts, they won’t be able to keep up. Legal operations is an umbrella term, so any growth statistics should be taken with a grain of salt. Still, it’s clear that legal technologies are undergoing a rapid transformation. It’s not far-fetched to say that the next three to five years will determine the winners and losers of today’s legal operations shuffle. Companies that centralize and streamline their work will succeed; companies that don’t will find themselves overworked and over-budget.
High-impact projects to prioritize
If there’s a silver lining to legal’s late adoption of operations best practices, it’s that many early operational fixes are well-documented and easy to implement. They are already standard practices in high-performing businesses across most industries, and you’ll have many vendors to choose from when you get started.
Below, we provide a few examples of common inefficiencies found on corporate legal teams and how legal operations solutions can adopt standard business and technology practices to solve them. Think of these recommendations as low-risk, low-cost ways to build out your legal operations infrastructure.
Problem 1: Unpredictable time commitments for technology management and financial reporting
You’ve likely experienced this problem if you’ve waded into the crowded and often murky legal technology space. With so many software offerings out there, how do you know which one will provide you with a high return on the time and money you invest in implementation?
The solution here is specialization. By transferring the primary responsibility of technology management and financial reporting to a legal operations responsible party, you can ensure that your team devotes adequate resources to researching, planning, and implementing solutions for legal work and financial reporting.
Our suggested metrics for verifying the effectiveness of this strategy are the number of hours your team spends on systems management or financial reporting, weekly, and the anticipated and actual savings for each technology implemented. Tracking these metrics over time can prove that any new technologies are saving you time and money.
Problem 2: Inefficient triage of incoming requests from other key company functions
Prioritizing work properly is a universal business problem. But it’s especially difficult for in-house legal teams—spending too much time on low-risk or low-value tasks slows down the rest of the company and leaves the business exposed to risk.
If your team tends to find itself with a backlog of important work (as most teams do), it may be time to implement a legal intake system or “legal front door.”
Once you’ve implemented the intake system, you can track a metric like the average time to issue resolution, both as a whole and by priority. Doing so will show you where your team is most efficient, where it is spending most of its time, and where it can improve. An intake system also establishes a foundation for automation and client self-service. One company we worked with has even set annual goals for task automation (e.g., automating 25% of incoming requests).
Problem 3: Spending too much time in your email inbox or redlining documents in Microsoft Word
You can help your company avoid compliance risk and improve its knowledge management by implementing a solution that automatically collects e-signatures and logs document or contract changes in a central source of truth. This is the surest way to track, measure, and verify contract compliance. We recommend tracking the number of contracts and legal documents that you have digitized. For example, you can reach 100% within 1-2 years of implementing a new contract lifecycle management (CLM) system.
For more practical quick wins like these, check out our blog post, “7 Tips for Leveling Up Your Legal Operations.”
Developing a roadmap for your legal operations function
Advice from Jenn McCarron, Head of Legal Operations at Netflix:
“At Netflix, we do a lot of strategic planning for our legal operations roadmap and strategy so we know what we’re driving toward. But along with that, I put a big focus on growth and development for my team members and myself. What do I want to change in my work performance and behaviors this year? That way, we all know that we’re moving our skillset along and doing some real smart goal setting for our own professional growth.
Otherwise, what’s the point? You have to change and grow through all of this so we can feel excited about what you’re doing and know that you’re not stuck behind a desk—you’re progressing. We’re getting better every year.”
How to make sure you’re working on the right projects and asking the right questions along the way
This roadmap walks you through a one-year, multiphase implementation of a technology-enabled legal operations team that scales toward company-wide impact. This roadmap can be used for:
- Onboarding legal operations professionals
- Getting a newly created legal operations team off to the right start
- Envisioning timelines and benchmarks when adding new technology into your legal operations
Phase 1 (months 1-3): Diagnosing and fixing your immediate pain points
In Phase 1, the legal operation team’s objective is to diagnose and start to alleviate your organizations’ immediate pain points.
Establishing an early benchmark for the current state of the legal department is crucial. Early on, your legal operations team should prepare a brief survey asking legal team members at all levels what is working well and what could be better. Get a clear understanding of what type of work drives the most legal demand. You will then want to determine if there are routine administrative and contract management tasks that take up much of your staff’s time and energy, and then strategize how to outsource, automate, or eliminate these time-consuming, low-value tasks. This survey can be given again after a few months to see where you stand.
Legal operations should also be prepared to take ownership of the department’s budget and vendor relationships, including both outside counsel and tech vendors. Although this hand-off may require extensive coordination, it will free up resources for your organization as soon as you complete it.
Phase 1 is the time to identify and implement legal technologies that address your organization’s most pressing needs. For example, contract managers can easily use software like Ironclad to identify high-volume contracts and create cloud-based templates that the entire company can access. This type of solution eliminates the unnecessary emails that different departments send back and forth for signatures, review, and other routine tasks.
Additionally, housing necessary documents in one globally accessible location decreases time lost to hunting down or recreating preexisting knowledge, which often costs companies tens of thousands of dollars in lost time.
The overall goals for the ops team in this phase are to:
- Learn the ins and outs of your organization’s immediate and long-term contract management needs
- Discover any gaps in knowledge or efficiency to help your contracts management team
- Develop new KPIs around their goals in conjunction with the executive team
- Is your team learning the ins and outs of legal’s immediate and long-term needs?
- Have you discovered and documented any gaps in knowledge or efficiency?
- Are you helping legal establish new KPIs around their goals in conjunction with the executive team?
Phase 2 (months 4-6): Exploration, experimentation, and iteration
In Phase 2, the legal operations team’s main objective is to measure how well the technology, policies, and systems introduced during the first phase are improving your organization’s legal services delivery and contract management, including time savings and overall team satisfaction.
You should focus on experimentation and iteration. legal operations should conduct additional surveys to determine which policies and processes are working well and what opportunities for continued improvement still exist.
legal operations should also be quick to welcome feedback from the executive team and other departments on how well their systems are working. This is the perfect opportunity to check in with business stakeholders to build trust and partnership.
Analysis of metadata from legal technologies will also prove useful for forecasting at this point. For example, teams might ask:
- What were our most commonly executed contracts in the first three months of implementation?
- How does this number compare to prior measurements?
- Do any trends emerge from the data that can help predict growth?
- What other kinds of information do we need to model or measure?
The overall goal of legal operations in Phase 2 is to address inevitable growing pains as the department moves toward maturing operations.
- Are lawyers’ time savings translating into more meaningful work? What impact has this had on their job satisfaction?
- Is your contract management team now able to interface with other departments more significantly? Are your client teams happy with the process?
- How smoothly were new technologies from Phase 1 rolled out?
- Does newly implemented legal technology help expedite contract execution and reduce risk?
Assessing progress after one year
If you’re not measured, you’re not valued. This is why it’s important to develop baseline metrics to measure growth, then message your team’s progress to the rest of the company.
After completing Phase 3, set aside some time to meet with business leaders across the company to review your progress and summarize your recommendations for the future. This will give your team a chance to reflect on the lessons from the previous year and align its priorities with those of the business.
“In my first five years at Google, we grew 5X. In these periods of high growth, it can be tempting to try and solve it all at once.
Don’t boil the ocean in your first year. Pick three big things to prioritize and a couple of small, quick wins. Make a big impact with less and use that momentum to start creating friends of legal operations. By proving your value and having more people on your side sooner, you’ll be able to accomplish more in the long run.”
-Mary O’Carroll, Chief Community Officer at Ironclad
Phase 3 (months 7-12): Moving from risk management to growth
In Phase 3, the legal operations team fully owns their vendor and tech relationships, the content of the contracts they facilitate, and the knowledge database they now manage (this includes contract metadata and quantitative measurements of your contract management’s added value within the business).
With the metadata now available from implemented technologies, the tech-enabled contract management team can assess the risk profiles of their standard and non-standard contractual terms, modify terms in existing templates, and significantly improve control over the legal risks their businesses face.
The centralized repository of shared contract templates across the company reduces or eliminates the lag time between updating contract language and rolling out those changes to other departments.
Instead of barely managing to stay on top of routine tasks, as before, your contract management team can now translate saved time and newly available metadata into becoming proactive partners with the GC and the executive team, forecasting their needs and the needs of the company in order to create and implement a strategic vision.
With the newly available metadata, your organization can begin to assess the risk profiles of their standard and non-standard contract terms, as well as think about the team’s future needs.
In Phase 3, the legal operations team as a whole begins to think long-term, refining their best practices and working in tandem with other departments in order to initiate, drive, and measure future growth.
- Is your team now spending most of their time on the right type of work?
- Did average time spent in legal negotiations decrease because of streamlined processes and centralized operations?
- Did the overall productivity of your contract management team improve?
- How much time was saved through creating better knowledge management practices and by moving organizational tasks to legal operations?
Scaling: How to hire legal operations professionals
Advice from Ryan Black, Head of Legal Operations at Opendoor:
“I think highly organized people with a lot of curiosity and a knack for solving puzzles make natural legal operations leaders. If that sounds like you and you are already working on a legal team in another role (e.g., attorney, paralegal, billing clerk, executive assistant), learn as much as you can about other people’s jobs by offering to help with the projects no one else wants to handle.
One of my good friends and I joke that this is the essence of legal operations—doing what others don’t want to or have time to do. That undersells the legal operations function a bit, but it’s actually great advice for someone looking for a place to start. Jumping into these situations gives them an opportunity to understand a team’s pain points and then get to work solving for those.”
Tips for evaluating legal operations knowledge and suitability
When it comes to hiring a legal operations manager, you often have to get creative.
After all, the field itself hasn’t existed for very long. The demand for legal operations professionals is now higher than ever, but that can make it even more challenging to find the right candidates for an open legal operations role.
Some non-legal-ops areas to consider when sourcing candidates?
Management consultants are the type of people who come into a new situation or new industry and can immediately spot the issues. They’ll be comfortable with putting together a plan to fix problem areas and create processes that work for your team.
Someone who knows your business and product
Your legal operations search may benefit from looking within. If someone internally knows your business, product, and contracting process well and is interested in pivoting to legal operations, explore this interest, as they may be easier to onboard and train than outside candidates.
Other types of operations professionals
People in marketing operations, sales operations, revenue ops, and financial operations are already doing the same type of work—just for a different vertical.
A legal background isn’t necessarily the most important thing when hiring for legal operations, because your hire isn’t being asked to practice law; they’re being asked to run the business side of things. So instead, find business professionals who get operations.
Evaluating potential candidates
Hire for your blind spots. Look at what your department isn’t doing well—or needs to do better—and prioritize these areas when hiring.
“We have no legal technology” – look for someone who has experience purchasing and implementing technology
“We have trouble proving our value to the exec team.” – look for someone who has experience with data and analytics
Great legal operations teams require pragmatic individuals who are comfortable building out new processes from scratch. When building out your legal operations team, look for candidates who demonstrate a metrics-driven approach to problem-solving, the ability to operate across departments in uncertain conditions, an operational and strategic perspective on legal business practices, and a strong desire to help legal add value to the business.
Not sure how these might translate to a phone screen or on-site interview? Here are some interview questions that we use at Ironclad to gauge a candidate’s fit for legal operations roles.
Soft skills to look for
If a tree falls in the forest and nobody’s there to hear it, did it make a sound?
Almost more important than what you’re doing in legal operations is the story you’re able to tell around it. Be sure to find candidates that, regardless of their communication style, will be able to comfortably evangelize your department and keep cross-functional collaborators informed.
Legal operations professionals should display a natural curiosity about how things are done and want to challenge the status quo. Look for a person who has a genuine passion to go in there and make things better.
That means issue-spotting to determine what the true problem is, not just taking orders and doing what people are telling them they should do to solve perceived issues (i.e. purchasing tech to handle a process when it should really be outsourced).
Continue to learn & grow in legal operations in Ironclad Community
The world of legal operations is changing incredibly quickly—but we’re all in this together.
Join Ironclad Community to regularly connect with other innovative, forward-looking legal operations leaders. Share ideas, get advice from others in your shoes, get help filling open roles, and build your personal brand by attending or speaking at online and in-person events.