What Is Legal Operations?
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.
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 legal operations is and 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.
How is Legal Operations Defined?
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.
According to the Corporate Legal Operations Consortium (CLOC), which introduced the legal operations role as an industry-recognized profession, “Legal Operations describes a set of business processes, activities, and the professionals that enable legal departments to serve their clients more effectively by applying business and technical practices to the delivery of legal services.”
“Their capabilities allow the legal organization to more effectively manage risks, monitor compliance, incorporate the right technological tools, and deliver more value to the enterprise.”
Typically, an in-house legal team may consist of one or more senior counsel and commercial counsel reporting to a General Counsel or VP of Legal, augmented by a legal operations head, specialist or team.
Among the key duties of legal operations, besides vendor management, internal staffing and departmental budgeting — part of CLOC’s Core 12 responsibilities — are contract management and business intelligence. This includes the creation, management and storing of legal contracts, e.g., NDAs, MSAs, sales contracts and business agreements, including those launched by business users from other departments outside legal; for example, sales, finance, marketing and operations.
At a high level, 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
What Challenges do Legal Ops Teams Face?
The in-house legal industry is at a crossroads. If legal teams do not adopt new ways of handling business requests, they will find themselves unable to keep up with the accelerating pace and complexity of the rest of the business.
Most legal teams have realized that departmental responsibilities like financial management, technology support, analytics and record management require skill sets that attorneys may not have. That’s why they’ve turned to legal operations specialists, who have the knowledge and expertise needed to apply best practices to these problems.
Legal’s key operational challenges are:
- Slow legal turnaround time and efficiency. Without technology to automate and manage contract intake, approval, review and archiving in a timely and transparent manner, legal can’t prioritize legal asks, and stakeholders get frustrated waiting for responses that never come. Result? Legal is seen as a black hole that holds up business.
- Legal seen as a cost center. Without technology to access key intelligence locked inside contracts — from contractual obligations to governing law — legal can’t quantify its value to management, putting a dollar value on its work (e.g., risks mitigated or time saved). Result? Legal is flying blind, continuously trying to justify investment in itself.
- Working remotely. Without technology that facilitates both in-office and out-of-office contract collaboration between legal and its business partners in other departments, legal can’t maintain its contractual obligations. Result? Legal is unable to keep pace with business.
- Stagnant budgets, increasing workloads, and a mandate to “do more with less” can lead to unnecessary stress and slow processes, especially for chronically understaffed legal teams. Further, when in-house legal spends too much time on low-risk or low-value tasks, it slows down the rest of the company and leaves the business exposed to contract, compliance, and other risks.
Legal teams that fail to modernize their contracting may spend unnecessary weeks or months on manual tasks that more efficient teams spend only hours or days on.
Faced with all this, GCs at companies of all sizes are asking what are, essentially, legal operations questions. How can Legal get more done for less? What’s the best use of a lawyer’s time? How efficient is my legal team relative to legal teams at other companies? How much does it cost to process a typical contract?
Enter digital contracting.
How Digital Contracting Carves a Path to Success for In-house Legal Operations
By automating contract processes and repeatable workflows for high-volume contracts like NDAs — everything from creation and approvals to managing to archiving — digital contracting via contract lifecycle management software can bring modern order to outdated, manual contract processes. It can help legal:
- Work strategically by prioritizing incoming requests such as contract review
- Gain real-time visibility into the contract pipeline, from intake and negotiation to approval status
- Streamline contract approvals by enabling business users to launch their own contracting processes with self-serve confidence
- Drive efficiency and lower costs, reducing the need for outside counsel
- Focus on risk management instead of paperwork
- Become a collaborative partner to the business, rather than a black box
Identifying high-volume contracts and creating cloud-based templates that the entire company can access also eliminates the unnecessary emails that different departments send back and forth between legal for routine signatures and contract review.
Further, storing agreements in a secure, searchable repository decreases time lost to hunting down or recreating preexisting knowledge, which often costs companies tens of thousands of dollars in lost time.
Finally, being able to tap and report on a goldmine of process data (like average cost and turnaround to process contracts) and contract metadata (like upcoming contract renewal dates) is key to turning Legal from a cost center into a business center, a single source of truth for the organization.
A legal leader’s questions like these can be answered:
- 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
Why Legal Can’t Scale Without In-House Legal Ops
The legal profession is notoriously change-averse. Part of this problem stems from the highly specialized nature of legal work, and part of this stems from the nature of the industry — a high-stakes profession where you’re rewarded for following protocol, not for taking risks.
For most teams, the main barrier to modernization isn’t just to decide what technology to implement. It’s aligning their people, processes and tools toward a company set of business values and metrics. Digital contracting technology enables legal teams to work faster and more effectively than they have in the past.
And it’s in-house legal operations as catalyst, making that transition reality, from streamlining contracting turnaround to delivering valuable business insights for an organization’s senior leadership.
Real World Digital Contracting: How Branch and Asana Took Control of Contract Management
Our old way of doing things made even finding contracts difficult.
The Branch Story
Mobile linking and measurement platform Branch Metrics had little visibility and insight into its own global contract management, from formal review of agreements to associated data.
Worse, every quarter, Legal Operations Manager Josephine Vong painstakingly reviewed 1,000+ contracts over email, spending hours simply looking for the latest version of an agreement in flight between teams. Looking to unblock the organizational bottleneck, centralize contract storage and keep better tabs on incoming requests from various teams, Branch implemented Ironclad’s digital contracting platform.
“Our old way of doing things made even finding contracts difficult,” says Josephine. “By streamlining our entire contracting, Ironclad helped us accelerate high-volume, high-value contracts and create self-service process for our business users.”
Those high-volume agreements included deal-driving NDAs, MSAs and DPAs — typically manually processed the same way time and again. By automating the contracting steps into repeatable workflows, Branch Legal Operations turned a time-consuming, scattered process into a fast-tracked business process.
The Asana Story
“Traditionally, legal teams have been viewed as a tower of no,” says Asana Head of Legal Operations Ashlee Best, acknowledging a standard complaint of teams who may wait days, weeks or months for contracts to make it out of review, redlining and approvals.
As with Branch, digital contracting changed the way work management platform Asana processed its own contracts. That meant reducing processing time dramatically, helping Sales and Legal collaborate more closely and efficiently on deals — a boon for an organization whose values and culture place a premium on collaboration — and freeing Asana’s commercial counsel to “focus on the bigger legal issues and deals.”
“Cumbersome” contracting processes that formally took weeks are now “spun up in minutes,” bringing “a whole lot of ROI and value” to the organization, says an Asana account executive.
“Ironclad is a highly collaborative contract management system,” adds Best. “You just don’t hear those two statements combining together. Ironclad makes me look good, it makes my team look good and that’s priceless.”
Resources for Legal Ops
For more insight into in-house legal operations trends and best practices, check out these resources:
You are defining the future of digital contracting, and we’re here to support you.
- How is Legal Operations Defined?
- What Does Legal Operations Do?
- What Challenges do Legal Ops Teams Face?
- How Digital Contracting Carves a Path to Success for In-house Legal Operations
- Why Legal Can’t Scale Without In-House Legal Ops
- Real World Digital Contracting: How Branch and Asana Took Control of Contract Management
- Resources for Legal Ops
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Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.