Building Your Legal Operations Strategy
Our world is increasingly complex and interconnected — and as a result, the legal challenges faced by businesses are multiplying. Most major enterprises today need an in-house legal team they can rely on. And most businesses have, historically, been willing to pay a high price for legal services.
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 comes in. A great legal operations strategy, backed up by cutting-edge technology, can maximize your legal department’s productivity and reduce unnecessary spending. It’s a win-win situation.
Not sure how legal operations works, or how you can create a strong legal ops strategy? Keep reading. This article will dive into what you need to do to build a successful legal operations strategy so that your business can reap the maximum benefit possible from its in-house legal team.
What is legal operations?
Legal operations, or “legal ops,” is an umbrella term that refers to all of the administrative and management tasks carried out by the legal department. To put it another way, legal operations is charged with all of the aspects of the legal department that aren’t directly related to the law.
That means areas like budgeting and cost management, tracking productivity, vendor management, data analytics, and anything related to information technology.
Because legal operations isn’t focused on the law, legal ops tends to be closer to the rest of the enterprise. You might describe legal ops as a liaison, or go-between, capable of communicating with the legal department and the other departments in your business. Legal ops speaks the same language as both departments.
If you’ve ever watched your Sales team try to communicate with Legal, then you’re well aware that the two departments don’t really speak the same language. Legal ops can act as a translator, facilitating clearer communication between the departments. In fact, a Gartner survey found that in businesses with a legal operations manager, that role is often served by a non-lawyer.
What does legal operations do?
There isn’t any strict limit to what legal operations can do, and the role will look different depending on the needs and preferences of each business. In general, though, legal ops manages your legal department, making sure the team is successful and reaching its fullest potential. Legal ops is often charged with projects like
- Analyzing the legal department’s performance and working to optimize it, cutting out unnecessary spending
- Expanding the use of technology to meet the ongoing needs of legal and other departments
- Building and using metrics to improve legal decision making
- Improving internal communication, both within the legal department and throughout the business
- Clarifying the legal department’s role to other departments within the enterprise
Legal operations’ core competencies
It can be useful to describe legal ops in terms of its 12 core competencies, or functional areas. Business leaders should consider these areas whenever they work on improving their legal ops strategy. Briefly, the 12 core competencies are:
- Business Intelligence
- Financial Management
- Firm & Vendor Management
- Information Governance
- Knowledge Management
- Organization Optimization & Health
- Practice Operations
- Project/Program Management
- Service Delivery Models
- Strategic Planning
- Training & Development
Today, many businesses are pushing their legal departments to contribute more to the enterprise and increase value. It makes sense to look at legal operations’ core competencies when building out a strategy to maximize your legal department’s value.
What kinds of obstacles can legal ops help with?
Depending on your business, you’ve probably faced plenty of frustrations in dealing with your legal department. Chances are, if you’ve faced this problem, legal ops can fix the issue. Here are a few of the common issues that legal operations can address.
Other (non-legal) departments often complain that legalis impossible to communicate with. People submit questions or requests for assistance, and they never seem to get an answer. They also don’t receive receipts, or status updates, or any indication of when the requested work will be completed.
This can be enormously frustrating to other departments. Unfortunately, complaining about it only aggravates the issue. If people start bombarding legal with questions and reminders, the legal department’s work gets bogged down too, and everything moves more slowly.
Legal ops can make a big difference here. By creating a procedure with clear steps to follow and benchmarks to meet, legal ops can revolutionize communication between legal and the rest of the enterprise. Ideally, legal ops should be able to create transparent workflows so everyone involved in a project can see what stage it’s reached and how much more work remains to be done.
And of course, setting up a step-by-step procedure also means it’s easier to assess performance and efficiency. Having a process in place means you’ll establish metrics and expectations for your legal team to meet (or exceed) going forward.
Overloaded legal department
This is another common problem, especially as corporations have begun asking for more work from their in-house legal departments and cutting back on outside legal assistance. As legal faces increased demands, it’s inevitable that tasks start to pile up until the whole department gets overwhelmed.
What’s the result? An overwhelmed department stops functioning as well as it should. Documents get misplaced. Deadlines are forgotten. Deliverables are scattered all over the place. Key approvals aren’t coming in on time. This has a knock-on effect on the whole company, as there’s a hold-up on contracts with clients and vendors while legal struggles to find its way out of the chaos.
Fortunately, these problems can also be solved by a robust legal operations team. It’s just a question of organizing the process better.
A good legal ops department can make sure everyone’s roles are clearly defined, so nobody wonders what they’re supposed to be doing at any time. Legal ops can also establish an order of operations for every project and a clear protocol for handling documents, so nothing gets lost and no chaos ensues. Similar protocols can ensure important emails don’t slip through the cracks, and every step of the approval process is followed in a timely manner.
Lack of templates
This one is related, at least tangentially, to the problem of the overloaded legal department.
Often, corporations start to depend on their legal teams to review just about every document that the business creates. No matter how simple the contract, it gets sent along to legal so that they can look it over.
This is understandable, of course — nobody wants a contract that will cause trouble down the road. But in the long run, constant demands for help can slow down your legal team and keep them from their other work. It can also, frankly, lead to legal getting bored and frustrated, or even feeling unappreciated, and it can damage their relationship with the rest of your team.
It’s a good idea to check and see what kinds of issues your legal team is reviewing. Are they correcting the same little issues again and again? Is there any way to speed up this process so that legal doesn’t get called in for the same thing so often?
Most likely, this is another case where legal ops can fix the problem quickly and easily. Simply creating templates for the most common types of contracts would make a world of difference. A great legal ops team should be able to create a template that allows for plenty of variations and that follows your company’s unique set of guidelines and practices.
Sometimes, a slow or overwhelmed legal team can disrupt your whole contract lifecycle. Other members of your team may need to send legal constant reminders to push the contractual process along, or simply to find out how much more work remains to be done.
Sometimes this happens because they are overwhelmed, or because of the other slowdown culprits discussed above. But fixing the other issues doesn’t always go far enough to fix the contract hold-up.
Fortunately, your legal ops team can address this by introducing the right form of digital contracting.
Working with Ironclad
It’s also the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement, or a complex NDA. If you’re ready to take your legal ops to the next level, Ironclad can provide the tools and the expertise you need to make sure you get there. Request a trial to learn how Ironclad can help your business reach its maximum potential.