Legal Operations Management

What Is Legal Operations?

Legal operations can be defined in a very simple way as “all the work that isn’t the law itself”. This means that the administration that goes behind the scene to manage a case, or a contract, falls within the purview of legal ops. According to CLOC (Corporate Legal Operations Consortium) “Legal ops describes a set of business processes, activities, and professionals that help the legal teams serve the clients more effectively by applying technical practices to legal services.

In its very basic sense, legal operations are all about boosting the capacity of the in-house legal teams by using technology to simplify the administrative work that these professionals do. Taking care of data management, financial governance, or organizational workflows, legal ops deal with all the non-legal functions.

Let’s understand the concept more clearly with the help of an example - Mr. A, a legal associate at a law firm is in charge of looking after contract renewals. For this, he has to know which contracts are due for renewal and the terms on which they need to be renewed. This implies that he has to manage the contracts using different management techniques. When legal operations come into play here, the management of these contracts will be handled with digital tools like a CLM. The tool will keep all the contracts organized for Mr.A so that he does not waste time searching for a particular contract. Mr. A can also tell the tool how the segregation should be done.

Legal operations do not only include lawyers of legal teams, but it also encompasses financial experts, data analytics, project heads, and so on and so forth. These experts work with the management to derive strategies and then assist the legal professionals in the respective areas.

A 2021 LDO Survey talks about the main challenges that arise in the management of a legal team:

Challenges for legal team management

Cost containment and savings

Business process improvements

Departmental resources

Keeping up with law department technology

How Did ‘Legal Operations’ Develop?

The history of legal operations dates back more than 30 years. CLOC divides this evolution into 3 very distinct 'eras' that paint a very clear picture of the key activities that fell under this umbrella term historically.

The 1990s:

Legal operations solely dealt with risk management. The issues at that time were less complex and the majority of the legal work was outsourced to external counsel.

From 2000s - to - 2019:

The role of legal ops shifted more to strategizing things. The focus now became managing the outsourced work. After the Indian economy went global in the 90s, law firms began increasing in number, and the cases and contractual capacities went up with expanding business horizons. Legal operations started dealing with more intricate matters which now also included international issues.

However, the major work was still outsourced through external counsel and it demanded a more strict management approach to optimizing the counsel’s costs.

From the 2019 - to date:

The last era however saw a completely transformed to a totally new level. Today it deals with business and strategic issues that have an extremely complex nature.This evolved version of legal operations oversees each aspect of business operations as well as legal work. It encompasses everything - from legal tech, and spends management, to data and information governance, vendor handling, and much more.

Today, the role of legal operations has expanded beyond the basics and now also includes optimizing costs, workflow creations, contract management, and helping the legal teams perform better and accurately. Apart from this, it also deals with business-side issues of administrative work like documentation, keeping track of legal’s workload, and much more.

Evolution Of Legal Operations

The 1990s:

Focus on risk management and reducing outside counsel costs.

90s - Mid 00s:

Focus on heavier outside counsel use while still trying to lower costs

Mid 00s - 19:

Focus on bringing strategic value to the business

2019 - Now:

Focus on innovating and improving processes

What Is The Importance Of Legal Operations To The Legal Fraternity And Entrepreneurs?

The best part about legal operations is that it places data at the core of everything. Then it streamlines the data by utilizing digital tools like the CLM and ELM to make the processes involved in it frictionless. For the law fraternity, this is a boon that saves three main things - time, money, and mental space. When digital tools take over the process of automating simple and mundane tasks, then the legal can actually focus on the legal aspects of the work, thereby improving the overall output and performance.

Since legal ops govern how data governs operates and is used, the pressure on the in-house counsel is drastically reduced. From vendor management to internal policies, there is tangible proof of how the legal team is contributing to the enterprise’s work. Using digital tools to set a standard process or create a uniform format for ceratin tasks saves a lot of time that usually goes into administrating these processes. This also builds transparent and configurable workflows that make it easy for team members to work in a low-friction environment.

Since the scope of legal ops has gone beyond just legal, it also understands the business needs of both the management, as well as the legal in-house department.

Take-Aways:

Legal operations have scaled up from being just a management methodology to an all-inclusive way of business and the in-house legal departments are now an integral part of every growing business vertical.

With the help of digital tools, legal operations free up the time of legal professionals that they spend on administrative work. This scales up the utilization of resources and brings it to an optimum level.

The importance of legal ops has gained more visibility in recent times with digitization kicking off at a rapid pace. But not only have legal operations just helped the legal side, it has also contributed significantly to HR, IT, Finance, and so on.