The Benefits of Effective Legal Operations

If you have had prior dealings with GLS, you will have heard us say many times that the workload of the in-house legal community is never going to decrease and that the resources made available to in-house teams will never be increased at a commensurate rate. The net result is that in-house lawyers regularly find themselves drinking from the proverbial fire hydrant.

So, what gives? The answer to that is simply how and what you do with the resources that you already have so that you can achieve betters results (i.e. more responsive, better aligned with the business, and ideally at a lower cost), with the legal team resources that you already have. In short, make far better use of what you have, achieve greater results that can ideally be verified through empirical data - and build the value recognition that your business places on the legal team.

All of this is called "legal operations" - the art/skill/management science of achieving far better results with either the same or fewer resources. Fortunately, legal teams globally are increasingly recognizing that turning to "legal ops" is a far more viable strategy than asking for resources that you don't get or complaining about resources that you don't have. Critically, legal ops is a far better strategy than working your in-house team to the point of burnout.

So, in this Blog, we outline the multitude of benefits that a well-organized legal operations agenda can bring to any legal team - no matter their size, or the resources that they have to hand.

Higher-value lawyering

With far too many lawyers routinely working 50+ hour weeks, time is an extremely precious commodity for in-house lawyers. Unfortunately, "time" is also a massively squandered commodity by in-house legal teams.

Far too many times, the in-house lawyers will stay late or work the weekend because they find themselves saying "I will do it myself because ..."

• it takes too long to ask a law firm;
• it is too expensive to ask a law firm;
• XYZ is away so I need to step in;
• there simply isn't anyone around who can do it;
• it will probably be quicker if I do it myself.

All of these reasons might make sense in the moment, but there is a significant chance that habitually doing this, as "virtuous" as it may seem, is in fact blunting the strategic focus of your in-house legal team. This kind of resourcing decision is not aligned with what high-performance legal teams seek to achieve: strategic focus, greater productivity, cost efficiency, value add and verifiable performance.  (See “Strategic workload management” below for more on this!)

Moreover, it is simply not your job as an in-house lawyer to underwrite systemic inefficiencies that exist in your legal team by turning in excessive hours. To do so merely “papers over imminently addressable problems” and such a resourcing strategy has an extremely limited shelf life - no one wins. Fortunately, this is where legal ops can make a significant contribution. 

A well-run legal ops function can help provide far better resourcing options that allow you to achieve more of what the business wants you to achieve within your limited time. It keeps your work efforts strategically on point, makes justifiable cases for additional resources, and claws back valuable time that can be better spent.

The value of in-house legal teams is not the hours they put in - but what they achieve during those hours. And, if you are consistently 60+ hours per week, you are not doing yourself, your health, or your family any favors. And you need to stop doing this. 

Consider this - if your value to the business is in the hours you work - then you are shortly going to go extinct. With the advent of the internet and remote working models, your business has plenty of options to get non-strategic work done to the same or to a near-enough satisfactory level as you can perform it, but at less than 40% of the cost. For many businesses, this is "good enough" at that price point. So, your value is simply not in the hours you work - it is in the value that you bring. In-house counsel need to be mature enough and confident enough to get behind this contention.  More about this below. 

Reduced cost and improved quality

Legal operations, when done correctly, can rapidly increase the quality of support that a legal team provides to internal clients whilst significantly reducing legal department spending, particularly on external law firms.

Even the most elementary legal operations agenda can strip out significant legal team expenses (both internal and external) whilst boosting the quality of the support provided. For example, the contracting function - by simply implementing a contracting policy that is baked into your legal team templates, reflected in your checklists, calibrated against review processes and protocols, and is the subject of team training can drastically improve the efficiency of the contracting function.

If you want to go even further with minimal expense, augment these upgraded contract function assets with A.I. based contract review services and/or an automated approved clause bank - and the efficiencies are multiplied many-fold. Thousands of hours of potential review/negotiation time can be saved for a middling-sized legal team - which can easily represent hundreds of thousands of dollars of savings. And all of this should be done before you even think about spending thousands on a contract life cycle management system (See our Blog - How to Avoid a High-Tech Train-Wreck).

For the average in-house legal team, there are literally hundreds of simple and effective initiatives that can be quickly and safely deployed to substantially reduce legal team costs whilst materially improving quality in a verifiable way.

The legal operations team will look closely at vendor management, project management efficiencies, supply chain management, legal team production processes, and the customer experience amongst other performance/cost factors as part of its overall financial management and strategic planning.

Better support corporate goals

The legal team must perpetually chase value creation. and the most significant contribution it can make to the business is to proactively help the business achieve its corporate goals.

Decision-making must be made through the lens of "what value" the action/inaction of the legal team means for the business. Looking through this essential lens, one of the most powerful contributions that legal ops can make is to ensure that the focus of the legal team aligns up with the strategic needs of the business.

This is a major tenant of GLS's RPLV Strategic Decision Making framework that we recommend to all in-house legal teams. If you are considering a resourcing decision that does not have a "high-value" contribution to the business, then it is likely not the most pressing priority you can be pursuing. You can read more about RPLV in our Blog: RPLV Decision Making (A simple decision-making framework to drive legal team transformation).

New-era in-house leaders must constantly consider how well their activities align with the realization of the business's corporate goals. The wider team must similarly actively consider how their daily tasks relate to the strategic needs of the business. In so doing, the entire legal team becomes more closely engaged with the strategic objectives of the business.

By creating this "value link" culture, you achieve three exceptionally important outcomes as follows:

• Legal Team Value Recognition: by focusing on business-aligned tasks where you can achieve verifiable results, you can show the business data and evidence-based account of the value your legal team is creating for the Business
• Better Team Focus: the legal team will increasingly be working on what matters to the business and therefore drive its "value recognition" profile within the business
• Career Progression: lawyers that are consistently working on what is deemed important to the business, and doing a great job, will enjoy substantially improved career trajectories.

In-sync in-house legal teams

All too often, we hear that mid-to-large legal teams feel disconnected from their peers. There are many reasons for this, including the increasing prevalence of the decentralized in-house legal team model (a subject for a future blog for sure).

Whether it be due to the Covid-19 pandemic, which has seen many in-house lawyers working from home for the past few years, or the nature of the role (i.e. the need to support multiple businesses/locations and across multiple time zones), in-house legal teams can often feel disconnected from their own teams and the internal clients.

One of the biggest reasons is simply that lawyers are busy and spend too much time staring at screens and increasingly prefer to DM as opposed to speaking directly. To unpack this issue would take us well beyond the realm of legal operations and into a commentary on the harm that the prevalent social media culture is doing to society as a whole.

Regardless of the reasons, all too often, there can be disconnects within  your legal department (and with your internal clents) that are entirely avoidable. They might relate to perennial communication challenges, carrying out obsolete work types and the usual “who’s doing what, when, where, why”. For sure - a legal ops function can help deliver an inclusive focused communications channel that keeps the entire team on the same page - and helps build a team culture in our Web 3.0 world. 

Our tip is that this is going to be increasingly important as the "lawyer" remains the most valuable asset of a legal department and they need to be able to collaborate.

Strategic workload management

The primary objectives of an optimally performing legal team include:

1. Value Focus: to ensure the legal team focus on the more strategic and value-creating work;
2. Internal Production: getting more work done internally when it makes sense;
3. Better Careers: create greater career pathways for lawyers that retains talent; and
4. Reduced Costs: reducing operating costs whilst increasing value generation.

None of the above can be achieved unless the legal team has a firm grasp of workflows and work type demographics. With this type of data feed, the legal team can make better decisions about how work is handled to ensure the above goals are progressing.

A basic legal ops function will cross-check workflow forecasts, match it with available team capacity, overlay it with the skill development priorities of legal team members, and ensure that it is being done in the most cost-effective ways including through the use of task specific tools and processes.

The legal ops function, through strategic workload management, can make a significant impact from the chronic or regular work overload with which the in-house community is so familiar.

Improved Legal Team Value Recognition

Historically, legal team value recognition has been low (we think far too low). And, no one likes to feel unappreciated.

No one needs an unpacking of how the role of the in-house lawyers often involves intangible contributions. Historically, we have all heard in-house lawyers talk about their "silent" contribution going unnoticed by the business but with a "smug confidence" that the business was not smart enough to understand. Well, sadly, that was then - this is now.  In the prevailing language of business,  if you cannot measure it and report it, then it may as well not have happened. 

Accordingly, you need to be able to demonstrate the value you create and it starts by aligning your agenda with things that the business values (talked about above) and then measuring/ reporting it in a way that the business understands. Again, in-house teams need to talk the language of business which is hard data

Value recognition is one of the four pillars of RPLV Decision Making - that will help your daily legal dept. decision-making occurs in a strategic context of overall function performance improvement.

Control over cost

If you can get a million dollars worth of goods that you need for US$100,000 - some might applaud you - the CFO may simply ask why you spent US$100,000 in the first place. That is the world that we live in - the bean counters look at what you spent, and not necessarily the value that was created. This does not diminish the importance of "value" alignment and reporting - it is just a fact of life - for which your legal department must be ready.

Ask just about any in-house counsel, and the majority will tell you that their legal spending is a material key performance indicator they regularly report to their business. Add to this that no legal team operates in the land of "infinite resources" legal teams need to have a sharp and keen eye on the bottom line.

There is where a legal ops agenda can really help. Apart from real-time reporting about how your team is performing against financial budgets, a focus on cost control through efficiency and productivity release can help the legal team get what it needs, but in as cost-efficient a manner as possible.

Obtaining law firm value

In our experience, too few General Counsel/Heads of Legal/Chief Legal Officers pro-actively analyze and innovatively manage external counsel spending. All too often, management of external counsel spending is on a "reactive" and "after the event" basis.  Data surrounding the use of external counsel for many legal teams, by in large, is not the subject of performance-based examination. What this means - is that for most legal teams - their single largest expense is frequently not the subject of strategic analysis. This is a significant opportunity gone begging. 

A basic review of law firm expenditure can help yield substantial and immediate value insights. Matters can be assessed by strategic value, law firms can be performance-rated, the best value providers for specific work-types can be identified, and value creation goals can be set for external firms. This last point is key - it is all well and good to complain about your law firm - what have you asked them to deliver tangible forms of added value in their relationship with you?

The data yield from external counsel spend can actually help you amplify the strategic contributions of the law firms you work with. Law firms that consistently fail to stick to fee estimates/agreed budgets can be dispensed with - and more dependable providers appointed. Also, it may be that you identify opportunities to engage alternative legal service providers / lower-cost providers for more of your low-risk, low-value, high-volume matters that may have historically, and for convenience, been sent to larger, more expensive firms. Also, you might find that you could be doing certain work types more efficiently yourselves and bring them in-house.

Driving innovation and digital transformation strategy:

If you want to innovate - you need support from your business to try new things. This means explaining the "adverse cost" of the current state and the benefits that the business can derive from doing things in a new way (We will be posting a blog on this in 2023). Good quality data can help optimize every process within the in-house legal team driving legal team efficiency.

This is where legal operations capabilities can really help your legal team to embrace innovation and innovative ways of working, including the use of new digital technologies. The legal ops team can help you collect the right data that justifies your legal team's experiments with innovation generally - whether it be through embracing contract automation, A.I. based contract reviews, new business processes, new business models, better knowledge management systems, or different ways of collaborating.

No doubt, reading this Blog you can see that "data" is King in the new era of the in-house legal profession. We are not advocating that the primary job of the lawyer is to become a data analyst specialist, although all in-house lawyers will increasingly need to acquire a base level of literacy. The in-house job is to get more done with less, and innovation is often the key to this. You cannot innovate if you cannot justify the decision to innovate and this is where "data" proves exceptionally helpful.

Oh, and a small point, a good legal ops capability, will always be looking for ways to do things more efficiently including via innovation -and will also be "tapped" into the wider legal apps community for efficient innovation pathways.

With the right data to hand, particularly in this digital age we live in, your legal ops team can increasingly flag out opportunities to deploy new and innovative solutions. Common focal points include bringing efficiencies to repetitive and low-value tasks, knowledge, and better ways for the legal team to collaborate etc.

Legal team insight-based reporting

Legal departments must be able to speak the language of business - which is numbers and value - yup, GLS is going to go on again about the importance of ‘data’. The legal team must be able to produce reports which clearly demonstrate how efficiently they are operating and the value that they are delivering to the business. However, reporting is a specialist area and can be incredibly time-consuming.

This transcends more than the “justify your existence”; quality reporting is an opportunity to drive value recognition. The legal ops function plays a key role in ensuring that you track the right metrics and report on the right things.

A legal ops-inspired reporting function will cover a wide range of matters, including matters handled, resourcing allocations, costs forecasting, performance against budget, and cost overruns - not to mention specific data around value created, whether it be hours/costs saved.

The ability to automate this type of reporting is increasingly viable, particularly if the correct processes have been set up, and the appropriate "function management" systems have been deployed (and which are increasingly affordable).

Regardless of whether you have a "function management" platform - the job of the lawyer is to "stay on task" and not to get bogged down with reporting tasks - regardless of how important it is. Some in-house legal teams who do their own reporting are losing days, if not weeks, of time each year, producing reports, instead of advising the business.

As such, with the right legal ops support in place, your lawyers can increasingly stay on task whilst you responsively report to your business client on utilization, budget, or strategic alignment matters.

Better legal team decision making

This one is easy - with better information, legal teams can make better decisions on how they allocate their resources. The data provided by in-house legal operations teams will greatly enhance the data-based decisions, massively increasing productivity maximization, resource justification, and in-house legal team credibility.   

Lawyers empowered to be lawyers

You didn’t go to law school to sift through Excel spreadsheets or review law firm bills. When in-house counsel are buried in clerical hassles, they risk burnout, and companies lose out on one of their best assets: their legal minds.

As legal operation managers take over non-legal tasks inside the legal department they enable lawyers to focus on delivering high-quality legal solutions. Some say this increases the quality of the legal work as corporate legal counsel do not spend time and energy on other business-related assignments. 

Final Thoughts

For most IHLs, the pathway towards a better future necessarily comes down to something far less complicated than “available budget” – ultimately, it comes down to something as simple as “choice”, which costs nothing. The benefits of a legal operations agenda ... and mindset ... are too compelling for any in-house legal team to be ignoring.

We explore the benefits of legal operations to your legal team further in (Part D - GLS’s Ultimate Guide to Legal Operations) which you can download here:

We recommend this to you as a further summary of the benefits of legal ops together with some commentary on how quickly your legal team can realize the benefits of the same.

Ready To Transform Your Legal Team?

Please check out the GLS solutions and know-how resources listed on the right side of this page – they might assist your legal team with the issues explored in this Blog. 

© The GLS Group - Law Rewritten