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 all that needs tremendous documentation, drafts, and filing to be done. 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 the legal operations, like drafting, negotiations, record maintenance, documentation, etc., were maintained manually. Previously independent lawyers had a single office for functions with a limited clientele. But as the importance of the legal implications grew, law firms started coming up, conglomerating lawyers and a vast base of clients under one roof. This made the operations more complex and hard to maintain. Businesses began having an in-house legal team rather than outsourcing their legal work.
What are legal operations and what is their scope?
According to 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 who aid legal departments to effectively serve their clients using technology to deliver legal services. Legal ops provide a strategic foundation for planning, financial and project management along with technology experts so that lawyers can focus more on the law.
In short, we can safely say that legal ops deal with the responsibilities of legal departments that aren't 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
- Enchanting performance of the law firm 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 to 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, but since 2019 the scenario began to change; slowly but surely.
How does the legal ops' future look from here? 2021 and beyond
The future is, beyond a doubt, data. The legal ops team now can gather and organize large data sets that speak quantitatively 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 lets the department proactively improve business processes, including integrating legal technology to align with core business processes and ensuring a seamless collaboration with other critical departments such as finance.
The legal teams should always know where the department spends its resources as an aspect 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 generates real opportunities to step up and set themselves above the traditional stereotypical approaches of the legal industry.
Automated Initiation of Processes
The future is already beginning to shape by having operationally mature legal departments with evolved systems in place. Well-established processes for defined activities are taking place every second without much human interference.
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 while connecting all the legal processes has to be at the base of any technology reforms of an enterprise.
Software like E-billing, spend management, e-signatures have become essential requirements 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 deal with important documents like contracts, invoices, memos, emails, etc. Contract lifecycle management solutions are now effectively handling the entire span of a large volume of contracts in a firm. Manual management of thousands of contracts, their renewals, and compliances 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 stay assured that the administrative duties are well looked after, and they can focus on the actual job of practicing 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.
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