Have you ever been to a litigating lawyer's office? A desk filled with documents and ledger papers, a stack of files, tons of books, and much more. The lawyer handles many cases for various clients, and each requires extensive documentation, drafting, and filing. It is humanly impossible to maintain that infrastructure sustainably.
The reason we mentioned this scene is quite apparent - this is how it has been, till now. All legal operations, such as drafting, negotiations, record maintenance, and documentation, were handled manually. Previously independent lawyers had a single office for functions with a limited clientele.
But as the importance of legal implications grew, law firms began to emerge, consolidating lawyers and a large client base under one roof. This made the operations more complex and hard to maintain. Businesses began to have in-house legal teams rather than outsourcing their legal work.
What are legal operations, and what is their scope?
According to the Corporate Legal Operations Consortium (CLOC), "Legal operations," or legal ops as it is more commonly known, is a set of business processes, activities, and people that help legal departments effectively serve their clients by using technology to deliver legal services.
Legal ops provides a strategic foundation for planning, finance, and project management, working alongside technology experts, so that lawyers can focus more on the law.
In short, we can safely say that legal ops deals with the responsibilities of legal departments, not the law itself.
The scope of legal operations can be broadly categorized as:
Defining and driving initiatives for improved efficiency
Streamlining process workflows
External counsel management
Spend management and department budget
Enhancing the performance of law firms for maximum ROI
Metrics analysis for informed decision making
Deriving actionable items for delivery improvements
Technological integrations
Cross-functional capabilities for increasing the contribution of the legal teams
How did legal operations evolve?
Pre 1990s: Before the 1990s, legal operations were more focused on minimizing and managing the risk. They did not focus on maximizing the use of resources. They had but a simple aim: reduce the cost spent on the outside counsel.
The 90s-00s: This era saw more efforts put in on outside counsels even though the aim was to reduce costs.
The 00s-2020s:The era of 2000 through 2020 saw a significant shift in transforming the legal operations landscape. The focus shifted to the legal teams' ROI and the granular breakdown of the costs. Legal teams realized that they needed to start focusing on maximizing the resources. The best possible way to do that is by harnessing technology.
Using automation, legal operations were able to break down spending analysis by matter type. Value was added back into the business core by the legal operations team as the legal team became more focused on the actual work at hand. However, during the 2000s, only larger legal departments could afford a dedicated legal ops team; since 2019, the situation has slowly but surely begun to change.
What does the legal ops future look like from here? 2021 and beyond
Data-Driven Decisions
The future is, beyond a doubt, data. The legal ops team can now gather and organize large datasets that provide quantitative insights about the department. It is now within their grasp to access their performance on parameters like cost by practice area, internal and external spending, total legal costs, etc.
A quantitative approach also enables the department to proactively improve business processes, including integrating legal technology to align with core processes and ensuring seamless collaboration with other critical departments, such as finance.
The legal teams should always know where the department spends its resources, as part of critical information. ROI for every cent must be trackable, whether through risk assessment or driving actual revenue through contract management.
Now that the legal teams are armed and ready with this data in actionable formats, it creates real opportunities to step up and set themselves apart from the traditional, stereotypical approaches of the legal industry.
Automated Initiation of Processes
The future is already beginning to take shape through operationally mature legal departments with evolved systems in place. Well-established processes for defined activities occur every second with minimal human intervention.
Let's look at the instance of hiring an outside counsel. An enterprise with a highly mature department is more likely to have already issued a 'Request For Proposal' (RFP) and listed down a few firms they already engage with. Why does this matter? Because just like all other processes, it makes hiring and engagement repeatable and consistent.
It becomes easy to track and measure against such procedures. As a legal team grows in size and operations, it often needs to contain costs. The processes associated with this can run smoothly only if executed using the right tool and reporting.
Untangled Management Systems
There is no use in having the right tools if the configurations are all wrong. Proper management of technology is critical to ensure appropriate platform adoption. Building a legal tech stack that benefits the entire legal department and connects all legal processes must be at the core of any enterprise technology reforms.
Software such as e-billing, spend management, and e-signatures has become essential for modern legal teams. They have to meet the growing pressure of demanded operational efficiency. Implementing these tools is always the first step to creating a more data-driven team.
There is much more software that is revolutionizing legal operations. Secure document sharing is also a critical tool for legal departments. They handle important documents such as contracts, invoices, memos, and emails. Contract lifecycle management solutions now effectively handle the entire lifecycle of a large volume of contracts within a firm. Manual management of thousands of contracts, their renewals, and compliance is an ideal example of inefficiency at its best.
Suppose you run a legal operations team with multiple dedicated members or run a one-man show; in any case, basic facts remain the same across all verticals - legal operations perform well when the right tools are in place.
The effectiveness of these tools directly impacts the legal department and can derive benefits from the insights they generate. Lawyers can then be assured that administrative duties are well looked after, and they can focus on the actual practice of law.
With suitable systems in place to look after the business of law and people having actionable data they need to make decisions, lawyers are free to be lawyers. At the same time, the legal ops team is free to work on projects that create value for the organization. This is a perfect picture of what a mature legal operation looks like.
Maitreyee works as a content writer on the team. She is a lawyer by education and is passionate about creating content for the legal community that is relevant and thought-provoking.
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