Traditionally, lawyers have prioritized practicing law over focusing on the processes behind it. However, with growing client demands and the need for measurable results, law firms are shifting their attention toward productivity, operational efficiency, and metrics-driven performance.
McKinsey highlights that corporate legal departments are increasingly focused on legal operations. Similarly, the Thomas Reuters 2024 Survey reveals that 70% of law firms consider legal operations a top priority.
These statistics underline the importance of establishing a strong legal operations team to enhance client services while achieving successful outcomes. But how can law firms effectively embrace this shift?
In this article, we’ll learn about the nitty gritty of legal operations and explore its intricacies to help you stay ahead.
Source - Robert Gonzalez via LinkedIn
What is Legal Operations?
Legal operations, or legal ops, integrate business processes, activities, and professionals to improve the efficiency of in-house legal teams. It focuses on the operational aspects of law firms, including data analytics, budgeting, vendor management, and compliance. Legal ops also emphasize working optimally, efficiently, and repeatable to drive consistent results.
The role of legal ops, however, has changed with time.
- In the early 1990s, controlling outside counsel was its main priority.
- The emphasis switched to strategic work and increasing the company's ROI in the mid-2000s.
- By the late 2010s, legal operations began using automation techniques to increase productivity and cut expenses.
According to Bloomberg Law's legal ops and tech poll, a law firm now has an average of six legal ops employees and three in-house employees, indicating a significant shift.
Also read: Legal Operations: Working Behind the Best Legal Teams in the World
Importance of Legal Operations
Legal teams face pressure to deliver results while managing risks and costs. Legal operations improve efficiency and address these challenges. Roles in legal operations may vary across companies and firms, but the benefits are consistent. Below are key reasons why legal operations matter for your law firm.
“Over the past few years, hope has appeared in the form of legal operations, a discipline that focuses on the “unique” idea of treating in-house legal departments like any other part of the business. Along with data analytics (which I discussed in my last post) and legal procurement, legal operations help form part of the “Big Three” best practices utilized by savvy legal departments of any size.”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Legal Operations - What In-House Lawyers Need to Know
#1. Transforms the Delivery of Legal Services
Law firms must operate with precision and agility. Legal operations improve legal service quality through project and financial management. This function provides insights that support decision-making. These insights boost efficiency and ensure the team contributes strategically to the firm’s success.
#2. Enhances Communication
Legal ops bridge the gap between legal and non-legal teams, ensuring clear communication through shared tools and systems. For instance, both teams can use a contract management system to review contracts collaboratively, leaving comments for clarifications or modifications, fostering transparency and efficiency.
#3. Frees Legal Team’s Time
Overburdened legal teams risk errors that can lead to financial loss. Legal ops streamline workflows by defining roles and assigning predefined tasks, ensuring smooth operations. They also establish document handling protocols, freeing lawyers to focus on high-priority responsibilities.
#4. Creates Handy Templates
Your legal team often spends significant time reviewing both simple and complex documents, limiting their ability to focus on high-priority tasks. Legal ops can address this by collaborating with lawyers to create standard templates with predefined terms and guidelines or leveraging ready-made templates in contract management software.
This approach streamlines processes and frees your lawyers to focus on reviewing, communicating, drafting, and organizing contracts more efficiently.
#5. Assist with Contract Processes
Legal operations streamline the contract lifecycle by utilizing contract management software to automate approvals, set up agreements, and gather insights. Research by WCC shows that 81% of professionals plan to implement such software, while Gartner predicts legal teams will triple their technology spending by 2025. This highlights the critical role of legal ops in managing these tools effectively.
What Should Every Legal Operations Team Structure Include?
You need a well-balanced legal ops team to support your core legal team and lawyers. This includes managers, associates, and analysts who manage varied legal tasks.
“While many legal operations professionals are lawyers with in-house experience, they do not need to be. Someone with a strong financial background, MBA or CPA, would likely make an excellent choice. In the end, all you really need is someone who is smart, self-motivated, good with numbers, at ease with technology, and a leader. That’s a big group of people.”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Legal Operations - What In-House Lawyers Need to Know
Also read: A Day in the Life of a Legal Operations Manager
Below is a structure or a blueprint of who you should hire, their roles, and how they can support your legal goals.
- Manager - This position manages all aspects of legal operations, including planning, resource allocation, strategy, and maintaining alignment with your legal objectives.
- Tech Team - The tech team minimizes delays by ensuring that software, apps, and technology operate smoothly.
- Financial Analyst - The primary responsibility is to ensure the legal team’s budget and spending are on track.
- Project Manager - PMs work under managers and are responsible for planning, executing, and monitoring projects within legal teams.
- Data Analyst - Data analysts are needed to secure, clean, and derive insights from data, which helps in data-driven decision-making.
- Contract Manager - Contract managers typically collaborate with outside contractors when legal work is outsourced.
- Risk Manager - This role ensures your team stays compliant and reduces potential risk with early detection.
- Administrative Support - Admin support is needed for auxiliary tasks, like filing, scheduling, sending emails, and answering phones, allowing your team to focus on high-priority tasks.
Also read: Alternative Career Perspectives For Legal Operations Pro
Key Functions of the Legal Operations Team
The Corporate Legal Operations Consortium (CLOC) had suggested 12 core functions or competencies of a legal ops team. This ensures a set industry standard across legal firms.
#1. Business Intelligence
Your legal team operates in a data-rich environment and requires insights to guide business decisions. Legal ops can collect and analyze business intelligence data using predefined metrics, delivering actionable insights to support strategic decision-making.
#2. Financial Management
Cost efficiency and managing budgets are time-consuming yet essential tasks for your team. Legal ops can easily handle this by creating budgets, planning spending, managing accruals, implementing and monitoring e-billing, and forecasting expenses.
#3. Vendor and Firm Management
Modern legal teams often rely on external service providers and vendors. Legal ops support vendor selection, negotiate rates and contracts, and manage onboarding processes. They also conduct regular business assessments, fostering strong partnerships with vendors and external counsel.
#4. Information Governance
Legal teams handle sensitive data critical for litigation and compliance. Legal ops mitigate corporate risk by developing and communicating clear information governance policies, ensuring compliance, and enhancing data security across the organization.
#5. Knowledge Management
Lawyers frequently engage in complex, repetitive tasks requiring accurate and up-to-date information. Legal ops contribute to knowledge management by establishing centralized libraries of templates, creating knowledge hubs, and preventing knowledge loss caused by employee turnover.
#6. Organization Optimization and Health
Your team depends on the right resources, structure, and an effective work culture to be highly functional. Legal ops can design a hiring vision, maintain a pipeline of talented candidates, encourage your staff to create a balanced work-life approach, and develop professional growth plans for them. This motivates employees to work efficiently, enhancing productivity.
#7. Practice Operations
Every day, your staff manages a variety of workflows, including contracts, e-discovery, litigation, and compliance. Working on these tasks can restrict your lawyers from focusing on high-priority activities and clients. Legal ops can create specialized teams and allocate these tasks based on the right skills, streamlining the process and enhancing your firm’s efficiency.
#8. Project and Program Management
Legal teams often implement new technologies, ensure regulatory compliance, and support company-wide initiatives. Legal operations manage these workflows and projects efficiently without compromising quality. This allows lawyers to focus on critical legal tasks.
#9. Service Delivery Models
Your company needs innovative strategies to deliver more adaptable and efficient services to stay competitive. Legal ops can recommend top legal service providers, outsourcing solutions, and technologies to meet your needs. They can also build a vendor ecosystem that routes work to the most suitable vendors, reducing costs while improving overall efficiency.
#10. Strategic Planning
In-house legal teams need long-term strategic planning to achieve business goals. These include driving innovation, increasing profitability, and improving client satisfaction. Legal operations handle this planning. They align legal teams with stakeholders and company priorities.
#11. Legal Technology
Legal operations automate repetitive legal tasks like contract generation, document reviewing, and e-discovery using solutions such as contract management, electronic billing, and legal project management. This streamlines workflows and allows lawyers to focus on high-priority tasks.
Source: Matthew K. via LinkedIn
#12. Training and Development
Adapting to new trends and technology requires ongoing learning and development. This team creates training courses for skill enhancement and for employees to stay compliant. They also develop programs for new hires' onboarding and training, reducing your lawyer's workload.
Steps to Build Your Legal Operations Team
A specialized legal ops team ensures simplified procedures, maximized resources, and alignment with corporate objectives. Creating such a team is a calculated move that can increase your legal department's effectiveness. The steps mentioned below can assist in hiring the best person/team for your needs.
Source: Legal Evolution
#1. Determine the Department Need
Every legal team has unique budgets, structures, and priorities, making it crucial to assess specific needs before establishing a legal ops team. Legal operations typically operate across three levels: admin, optimize, and strategize.
- The admin-level handles foundational tasks like payments, vendor management, reporting, and compliance.
- The optimize level focuses on improving these processes
- The strategize level drives maximum results through advanced strategies.
Identifying your firm’s needs ensures you build a well-balanced legal ops team.
Source: Colin Levy via LinkedIn
#2. Choose the Hiring Roles
Selecting appropriate roles is essential for achieving corporate and strategic goals. Legal operations combine technology, finance, and data analytics. Building a team is time-intensive and affects budgets. Small firms can hire an admin-level manager for all tasks, while larger firms need specialized roles for efficiency.
#3. Opt for the Right Technological Solutions
Technology helps legal departments improve proficiency and effectiveness. The right solutions manage contracts, analyze legal spending, and track compliance to boost accuracy and productivity. These tools automate manual tasks, streamline document management, and simplify data reporting, allowing teams to focus on creating winning strategies.
Also read: Same Goals, New Approach: Exploring AI in Legal Operations
Conclusion
55% of the Bloomberg Law Attorney Workload and Hours Survey respondents felt they have a heavier workload or professional responsibilities. At the same time, 44% reported trouble focusing on work tasks. These alarming numbers directly impact a law firm’s productivity and growth.
Building a legal operations team is a forward-thinking approach that reduces workload by automating workflows and assigning tasks to the right resource. Hence, investing in an effective legal ops team is crucial for any law firm to balance efficiency, headcount, and growing demands.
Also read: Legal Ops Masterclass: Building Your High-Impact Team
“Legal operations are not just for mega-size legal departments. The math varies but somewhere between 25% to 50% of in-house legal departments (of all sizes) have created legal operations functions but that number is only going to grow – here in the US and internationally. All in-house legal teams should take a hard look at whether a legal operations function (or process) would improve service and reduce costs.”
~Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Legal Operations - What In-House Lawyers Need to Know
FAQs
1. What are the top skills to look for in legal operations applicants?
The top skills to look for in legal ops applicants include technical proficiency, project management, data analysis, financial acumen, and legal knowledge.
2. Should legal experience be prioritized while hearing the legal operations team?
Legal experience is not necessary as many successful legal ops professionals are from non-legal backgrounds, such as IT, finance, and project management. Instead, look for skills that can add value to your team.
3. What technologies should the candidates be familiar with?
An ideal candidate should know contract lifecycle management software, AI tools, eDiscovery platforms, and data analytical tools.
