As regulations and compliance gain complexity, the legal function takes on increased organizational importance. Legal operations, in particular, possess the ability to impact an organization’s bottom line, increasing efficiency and profitability. In light of a constantly changing business environment, this arm of the legal profession seeks to improve the effectiveness of in-house legal teams.
Legal operations, which can be described as the engine of an in-house legal team, constitute one of the fastest-growing arms of the legal profession. On September 3, 2018, the annual meeting of the Corporate Legal Operations Consortium (CLOC) will convene in Sydney. This highly anticipated event will gather legal operations professionals from around the country to focus on how they might transform and improve their industry in light of a constantly changing business environment.
The CLOC conference provides learning sessions for legal operations professionals from multinational companies, encouraging them to collaborate, share knowledge, network and build communities. Since its inception as a nonprofit in 2016, CLOC has become the fastest-growing and most active group of legal operations professionals in the world, boasting nearly 1,300 members from 37 countries.
With all of this attention centered on legal operations professionals, now might be a good time to consider their role in your organization. How might a strong legal operations team benefit your overall success?
What Is Legal Operations?
According to CLOC’s President and CEO Connie Brenton, legal operations is “a multi-disciplinary function within a legal department that optimizes services delivery to a business or government entity.” The legal operations role within the legal department has been evolving and expanding for more than a decade, as more and more companies come to see the benefit of the many services they provide. As Brenton explains, a successful legal operations team will help in-house legal departments function more like a business. This new vision of the legal ops’ capacities can have a wide array of effects on an organization, including delivering improved efficiency and developing better work processes for in-house legal operations.
One of the challenges faced by in-house legal teams is that they have been burdened with a number of responsibilities and duties that are not within their realm of specialty. Companies across the country find their legal teams engaged in activities like billing, assessing patent asset portfolios, managing external relationships and processing technology implementation. These added duties take away from their ability to meet the legal needs of the organization. Legal operations professionals can focus full-time on these managerial tasks, allowing the legal team to serve the company more fully.
Legal operations professionals are changing the way in-house legal departments function. Their responsibilities vary from organization to organization, but in some companies, legal ops enable improved management of outside counsel and vendors, oversee department budgeting and staffing, and provide leadership to diversity and pro-bono programs. Other successful legal ops initiatives have helped implement technology management systems and orient data governance practices to ensure company compliance. Mark Chandler, General Counsel for Cisco and a vocal proponent of legal operations professionals, says, “Legal ops are scoping out the best way to perform legal services.”
CLOC’s 12 Core Competencies for Legal Operations Professionals
CLOC identifies a dozen areas in which legal operations professionals can help organizations perform optimally. Included in these core competencies are:
- Financial Management
Understanding where the money goes is paramount to any successful business. How is your legal department billing for its services? Where might cost inefficiencies be hurting your bottom line?
- Vendor Management
The time your legal team spends working with vendors could be better spent on other projects. Legal operations teams ease the burden of vendor management.
- Cross-Functional Alignment
Is your legal department taking advantage of all of the ways it might be useful across the company? Legal operations professionals can help expand the effectiveness of your legal department and help align it with other aspects of the organization.
- Technology and Process Support
How might technological advances help automate processes? Legal ops teams can help implement new tech systems to improve your legal department’s productivity.
- Service Delivery and Alternative Support Models
Legal operations can help analyze how legal services are reaching their end-users and suggest new modes of delivery.
- Organizational Design, Support and Management
Is the support and design of your organization optimized for productivity and efficiency? Legal operations managers may be able to suggest new organizational structures.
Legal operations professionals can open new lines of communication between the legal department and other parts of the organization, allowing for greater insights and increased collaboration.
- Data Analytics
Legal operations teams can help the legal department extract the information it needs from data and ensure the data is readily available.
- Litigation Support and IP Management
A well-trained legal operations manager can help provide effective litigation support and help manage the intellectual property concerns of your corporation.
- Knowledge Management
Legal operations managers can assist in capturing, distributing and effectively using the knowledge generated by your legal department.
- Information Governance and Records Management
Legal operations teams can optimize data governance and records management for your legal department, ensuring the safe use of sensitive data and the timely retrieval of important documents.
- Strategic Planning
Legal operations teams help your corporation plan for the future by aligning the functions of the legal department with the corporation’s goals and benchmarks.
How Can Legal Ops Teams Help Meet Current Challenges?
The benefits of a strong legal ops team should be apparent. But why is this role on the rise now? What challenges do companies foresee, and how might legal operations professionals help turn those challenges into opportunities for future growth?
Managing Increased Regulations
Companies across the board report that one of the greatest challenges they face is staying abreast of the constantly changing and increasingly complex landscape of corporate regulation. As organizations expand into new countries and jurisdictions, these complexities compound. Currently, multinational corporations are seeing increased pressure from governing entities to provide greater transparency for their business dealings. These corporations must ensure that all their divisions and subsidiaries maintain corporate compliance standards or face the possibility of fines or legal action. A well-trained legal ops team can help navigate the intricacies of these regulations and keep companies free from the risks and penalties of noncompliance.
The Impact of Corporate Restructuring
The 2017 tax reform legislation radically lowered U.S. corporate tax rates from 35 percent to 21 percent. In order to take full advantage of these reforms, many corporations are considering the possibility of restructuring. Corporations hope to determine the optimal structure for their organization, one that will maximize profitability, increase transparency and minimize exposure to risk. But such changes aren’t made without complications. Legal operations professionals can help create a smooth operating environment as the corporation evolves.
As more and more companies understand the benefits of legal operations professionals, you can expect to see their prevalence and influence within legal departments grow. The increased demand for more efficient, cost-effective in-house legal procedures should ensure an important place for legal operations managers in the days to come.
Organizations are ramping up their investment in initiatives surrounding governance, risk management, internal auditing and compliance due to the changing landscape of regulatory issues worldwide. International Data Corporation (IDC) estimates that worldwide investment in GRC could reach as high as $11.8B by the year 2021. Driving this increase is the fact that managing regulatory compliance on a local and global level is becoming increasingly complex. Additionally, businesses’ risk and compliance initiatives are consistently under greater scrutiny and although the demands continue to increase in an era of enhanced regulatory examination, legal and compliance teams are being asked to do more with minimal resources. However, according to Deloitte, best-in-class organizations are shifting their perception of the legal and compliance function from a cost center to realizing that investment in the compliance function, and software that helps support its operational efficiency and maturity, is associated with increased top and bottom lines in addition to lowered danger of organizational and reputational risk. There is a growing need for greater centralization and consolidation of disparate systems and data sources, which is where Blueprint OneWorld and Diligent can help international organizations.