Janet Taylor-Hall, CEO, Cognia
A survey of law firms and General Counsels conducted by Bloomberg Law last year found that more than a third did not have a legal operations function.
Though the formal title may not exist, it’s safe to say that every legal team is delivering legal operations.
The component parts have always existed with someone in the legal team picking up work related to the operations of the function. These activities typically include supporting the development and rollout of the function’s strategy, selecting panels, preparing templates, handling demand, aligning the L&D plan to the strategic priorities and managing billing and budgets.
The role of legal operations is to pull these activities together in the most effective way. We believe that how you do this is a critical differentiator in the way you build a responsive and commercial legal function.
Ensuring strategic alignment
Every legal function has a strategy. At a minimum, it will be driven by the annual budget setting process and it will include funding for headcount, recruitment, training and external legal spend. Given the requirements of business strategy, ever increasing workloads and budget constraints, most GCs go a lot further. They’re exploring the use of blended in-house and external sourcing models where low risk transactional work is handled differently from more strategic and higher risk legal work.
Delivery models may also include the introduction of self-service options for business stakeholders and efficiencies delivered by enabling technologies. The point is to turn strategic intent into operating reality.
If, for example, a GC’s strategy includes moving to self-service for some activities, the legal operations team will need to look at selecting and implementating self-service tools as well as optimizing and simplifying templates and workflows. Where the priority is to reduce the cost of low risk transactional work, they will need to engage external legal service providers and agree ways of working that allow access to services whilst maintaining quality, meeting service levels and monitoring budgets.
Without alignment between the business, the GC and their operating strategy, this can result in a series of tactical or point solutions which makes the legal function more difficult to navigate than before.
Taking a strategic approach can make legal operations greater than the sum of its parts. Think of a modern, state-of-the art airport where everything is geared to maximising the traveler experience, then compare it to an old, underfunded airport. The systems, procedures and ways of working are designed for a previous age. Making the end-customer happy probably isn’t top of the priority list.
Run in-house legal like a business
World-class aviation hubs don’t pop up by accident. They’re designed by trained specialists and managed by highly-skilled people using the latest tools, platforms — and data. How they work together is formalized in an operating model that allows them to focus on what they need to do.
Whether a legal operation is 5-10 people or significantly more than that, legal services need to be designed and delivered in ways that are understood by the legal teams and clear to the broader business. Operating models fail if the business doesn’t understand how to consume your services and your legal specialists are still overwhelmed by the volume of transactional work. Legal operations teams need to build strong relationships with their colleagues and the business – seeking and proactively responding to feedback on the transparency and efficiency of their services.
How will you know if you are succeeding?
- Your specialist legal teams are able to focus on business-critical legal challenges. They partner with the Board, C-suite and business and pro-actively advise on legal strategy, risk management and compliance
- Feedback from the business confirms that workflows are simplified and that services are delivered at the required pace
- Investments in legal technology are adopted by legal teams and the business
- Data driven reporting confirms the effectiveness and efficiency of the legal services and compliance with legal controls
What are the challenges?
Strategic alignment is often hard to achieve. Legal operations have usually evolved over time and there may be different models operating in business units or across geographies. Legal operation teams can be overwhelmed with the volume of work required to keep up with basic administration and financial management.
In the next installment of this series, we will discuss how to overcome these challenges as well as practical ways of assessing the state of current operations and how to reach their full potential.