Article-12 | PracticeLeague
Understanding the 3Ws of Legal Ops

Accelerating legal processes and alignment with business goals by implementing an integrated and unified technology platform.

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“This notion of being at the intersection of business and the practice of law is helping today’s law departments run like the businesses they support.”
-Bruce Goldberg, Corporate counsel and head of legal operations at Allstate2 says in an interview with the ACC Legal Ops Observer.

There was a time when corporate legal departments were found sitting at the far end of the office, only visible during a major litigation or a regulatory crisis. Consulted on major M&A dealings, regulatory inspection, or extinguishing compliance risks, legal departments were else only seen managing piles of invoices, pleadings and not to forget, the outside counsel.

Almost a decade and a financial crisis later, corporate legal departments are now seen on the forefront of the business, with General Counsels taking up a seat on the board to not only demonstrate the value of legal in business but also carving a place for the legal department as a profit centre in the organisation.

But what made legal in business a laggard?
Working in silos, performing manual/repetitive tasks, resistance to change, lack of budget, and uncertain about which technology is apt for the specific needs of their department, made legal wedged in the endless cycle of ‘Do more with Less’.

How to bring legal up to speed?
Before reinventing the wheel, it is important to understand the current processes on which legal are performing. The management of legal operations has moved beyond the outside counsel and litigation management and into a more strategic and critical decision making. The introduction of legal ops in corporate legal departments has been hailed as a revolution that will transform the way legal will perform and become the next business partner in the organisation.

WHAT is Legal Ops?

Legal operations essentially means running in-house legal like a business, focusing on competencies like financial management, vendor management, technology and processes, cross – functional alignment, litigation support and IP, analytics and enterprise wide visibility of legal processes to make legal departments efficient, effective and fit for the modern business. After the 2008 financial crisis, legal departments are transforming itself from isolated and obsolete to engaged and pioneering, while improving ways to make legal, compliance and risk management processes an integrated function enabling business to perform proactive risk management capabilities.

Legal ops with its varied competencies and collaborative approach, coupled with an integrated technology platform will come to be known as a Centre of Legal Excellence where legal functions will become the best run functions in the organisation and evolve from a supporter to enabler of business goals.

WHY Legal Ops Matter?

1. Cross-Functional Alignment:
It’s imperative for legal departments to understand the significance and need of cross functional alignment in the ever-evolving business scenario and identify the most valuable areas for legal to align across the business. While the advancement of technology into in-house legal took longer than other business processes, but the steady adoption of technology in legal has ultimately transformed the legal function and how it performs. To ensure legal has the right technology to streamline and coordinate legal function, the legal ops team need to align first with the IT. Without having a mutually- beneficial relationship with IT, legal will always tend to struggle in comprehending which technology best solves their challenges.

The second most crucial collaboration of legal is with finance. While it’s no longer wise for in-house counsels to be unaware of who their budget regulator is, it is also risky to be oblivious to what legal spend entails and be unaware of how to optimize it better for improving the overall bottomline of the business. Legal spend can have a direct impact on top-line costs and ultimately the shareholder value of businessmaking it tangible for in-house lawyers to have efficient cross-functional alignment for an effective legal service delivery.

collaboration-and-business-performance

*Research shows that when lawyers get collaboration right –that is, do complex work that spans legal disciplines, business units, or geographies within their organization–they produce better business outcomes and attract and retain the highest-caliber talent.
*(Harness the Power of Smart Collaboration for In-house Lawyers - Heidi K. Gardner, PhD Harvard Law School -
https://clp.law.harvard.edu/assets/Gardner_Smart-Collaboration-for-In-House-Lawyers_HLS-white-paper.pdf)

2. Technology and process:
For legal ops team to ensure all legal functions are performing smoothly, they need to bring the existing processes and technology on the same platform for seamless collaboration and workflows across legal and other business units.

The ideal approach to tech adoption has been identified as putting all, the people, the processes and the infrastructure, together when creating a roadmap towards implementation. The approach is steered towards identifying firstly a robust and scalable platform that is fit with the need for today’s features.

The Platform-First approach is a strategic roadmap which transforms the existing legal processes from “As Is” to its target operating model, reflecting legal’s end-to-end processes and address ways in which technology can help, including solution implementation.

The processes which are currently manual, with numerous excel sheets and emails to be maintained and tracked can become a tiresome activity to follow through with very high incidents of information getting lost in the process. It is only necessary to have an automated solution which brings all the legal functions on one integrated platform to capture data incoming from various sources and allow for enhanced analytics.

What agile legal departments have implemented is a platform that is built on a fluidic architecture where the processes and data flow across functions and departments to capture the right information in real time providing informed insights to proactively mitigate risks before they turn into legal matters.

3. Data-Analytics:
Gathering and deploying data is what every other crucial business function does. If legal wants to be a strategic partner in the organisation, then having real-time reports and analytics on legal functions and spend is significant. For legal to be the best-run function, it requires data sets for diverse legal processes including contractual data (Turnaround time, type of contract), litigation analytics related to legal spending, overall case management, monitoring and tracking each compliance and collaboration like outside counsel spend/performance. These metrics allow in-house counsels to deliver actionable insight to the business - helping them close, procure or onboard faster having a direct impact on the bottom line, and create a strategic position for them in the organisation.

4. Litigation Support & IP:
One of the most crucial competencies in legal ops is Litigation management and IP management, which is placed in the mature cycle of legal ops efficiency entailing improved productivity and cost-effectiveness in areas of significant legal spend that also have a substantial, tangible benefit to the business.

The central and most pivotal task of legal ops team is to streamline and automate the matter management process which includes case management, legal spend management, IP management, document management, etc. Not only the process requires automation and visibility throughout a matter’s lifecycle, legal departments also need a centralized platform to manage the routine processes of opening matters, managing workflow and running reports.
An integrated matter management software enables in-house counsels to create a central repository and engagement platform for all matters and track legal spending on various matters of the department. Apart from a centralized view on all the matters, the Matter Management Software also allows the legal department to generate on-demand reports; schedule emails-based reports and create a heatmap based on risk impact and likelihood of matters.

5. Vendor Management (CLM):
For many in-house legal teams, and particularly those with a high external legal spend, an important role for legal operations is managing external vendors (primarily legal service providers and outside counsel and law firms). Vendor management is essentially the internal procedure for dealing with external vendors and suppliers.

Businesses to have as much as 90% of revenues tied to vendor contracts

Businesses that lack visibility in their vendor management and vendor performance pose a significant threat to the company’s supply chain and hinders the ability to act quickly when dire situations arise.

By implementing a proper Vendor Management System in place, companies can benefit from a centralized view of the current status of all vendor contracts and other useful vendor information which will enable the organization to achieve better decision-making capabilities and save valuable time.

For an efficient vendor management in businesses it is imperative for both legal teams and vendor managers to be proactive and risk-empowered when onboarding a new vendor and signing a new contract. As every contract consists of various terms, conditions, provisions, and clauses, each of them are potential to risks towards the business. The Vendor Management platform enables businesses to not only cut costs but also control expenses, mitigate risks while gaining increased visibility and value from their vendors.

WHO needs Legal Ops?

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“High performing corporate legal departments are shifting from a remedial to a preventative approach to legal issues. The 2017 report reveals high performing corporate legal departments have a clearly defined role in the business that promotes strategic alignment by setting KPIs in line with organisational KPIs”

– Eric Chin

Economic pressures stemming from the global financial crisis and the concurrent entry of technology-based solutions, as well as disaggregated and alternative legal service providers, have inundated in-house departments to transform from a reactive fire-extinguisher to a proactive leader in the business.

Agile legal departments that are on the journey of transformation in not just their functions but entire infrastructure and technology to enhance the processes on a single engagement platform, require a legal operations strategy that brings increased predictability, better technologies, more efficient legal services and innovation in the legal departments.

To implement this means breaking the regressive processes of tossing most of the work to outside counsel or struggling to take in more work while the budgets/resources remain constant.

The Enterprise Legal Management platform has revolutionized legal departments in improving legal efficiency, cost-effectiveness and productivity while delivering on Competitive Edge and Compliance through richer Business Context. It is advisable that enterprises adopt such platforms to not just improve their effectiveness but also avoid the hassles of multiple vendor, integration and centralization.

By establishing a common platform, legal departments can capture critical business information and create one robust repository for contracts, matter, compliance and regulatory updates across the organisation. Gathering data and actionable insights on diverse functions will engineer further efficiency improvements and deliver better legal services that match the business needs of the legal department and company.

*Reference: https://acla.acc.com/documents/item/1909