What Exactly is Legal Operations?
Legal operations’ professional origin traces back to the mid-2000s, when increased demand for legal services and the introduction of various technology tools spurred the emergence of dedicated personnel tasked with overseeing legal administrative functions. As a result, the past decade has seen a consistent rise in the integration of legal operations roles at almost all levels and positions in the legal industry.
Adopting a legal operations function generally leads to more efficient processes and reduced costs, both of which are frequently cited as leading motivations for a law firm’s or corporate legal department’s decision to implement one. Bringing in an expert who focuses on generating greater efficiency through streamlined legal business practices is a compelling alternative to other means that have been tried by firms and corporate clients, including squeezing down on fees and appointing project managers.
Demand for legal operations professionals continues to grow. A recent Robert Half Legal research study found that almost half (45 percent) of technology services attorneys hold formal leadership positions. These positions generally include practice group leaders and practice group managers, but also extend to more nontraditional functions such as risk managers, legal project managers, and legal operations officers. The number of legal operations professionals has risen significantly, yet demand outstrips supply: Indeed, 57 percent of legal executives say their legal operations team is understaffed .
In-house legal professionals showcase the largest concentration of legal operations officers, but the legal industry as a whole is not keeping pace with the rest of the nation. The Bureau of Labor Statistics’ May 2016 National Occupational Employment and Wage Estimates found that there were approximately 40,000 legal occupations managers in the U.S. At the same time, only about 5,000 of these managerial positions were concentrated in management occupations.
Advances in automation and artificial intelligence are changing how legal departments operate. The advent of these new technologies has led to the shift toward process redesign and resource reallocation or optimization in legal departments. Corporate clients are starting to envision a future where traditional roles give way to machine learning and automated programs. For example, 72 percent of legal departments represent analytics as an emerging technology that has the potential to disrupt the legal function in the next five years.
Even clients’ own outside counsel show no signs of slowing their adoption of technology that automates service delivery. Recently, 60 percent of respondents to an Altman Weil survey on law firm leaders noted that their firms have invested in a more scalable workforce model. This model reduces individual activity through standard work programs, outsourcing, or automated processes.
The Role of a Legal Operations Specialist
The core objective of a legal operations specialist is to contribute to the delivery of legal services as efficiently as possible, which involves a myriad of tasks and responsibilities. Process improvement typically covers reviewing legal processes, identifying inefficiencies and bottlenecks, and developing and implementing new procedures that streamline workflow. This could include mapping out current practices in order to spot unnecessary steps or redundancies, then creating new processes that eliminate these issues and lead to more efficient case management. The management of technology and legal software also falls under the purview of the legal operations specialist. This involves evaluating the needs of the firm or corporation and sourcing the right tools that can help to meet those needs. Once the tools are in place, the specialist may be responsible for the onboarding of employees, training and development, and ongoing support for legal technology initiatives. Budget and accounting is another critical component of a legal operations specialist’s job. This includes managing and monitoring the budget of the department or organization, including all financial protocols. The specialist usually coordinates and manages billing invoices, payment processes, trust tracking and reconciliation, and implementing a record system for all financial dealings. Finally, the specialist may be responsible for future planning, or strategic planning, meant to look at the long-term needs of the organization and how to best prepare for potential changes in the legal industry as a whole. In this way, the legal operations specialist is directly involved in both the present and future of legal process improvement. As a result of all of these responsibilities, a legal operations specialist is an invaluable component of the law firm or corporate legal department he or she supports.
What Skills Does a Legal Operations Specialist Need?
A successful legal operations specialist must possess a variety of skills that make them an invaluable asset to their legal department. Beyond the essential analytical and technical skills, a legal operations professional must be able to navigate the complexities of a law firm-client relationship.
The ability to lead and drive transformational change is a key characteristic of a legal operations function. Whether that function is a dedicated legal operations team within a law department or a part-time responsibility taken on by an attorney or support staff member, the ability to drive meaningful and measurable change is essential in a rapidly changing legal market.
Legal operations success is usually measured against well-defined strategic goals and initiatives. However, legal operations professionals must also have the skill to measure success against less quantifiable metrics. Improvements to quality, efficiency and service are difficult to measure in absolute terms, yet it is important for legal operations professionals to address, understand and be able to communicate the subjective aspects of the legal work they manage.
Strong project management skills are critical to the success of a legal operations professional. The ability to prioritize, execute, and manage key projects is the hallmark of a legal operations professional. This is especially important to identify cost-saving opportunities. A legal operations professional should have an understanding of the budgetary impacts of legal projects, so they may focus their efforts to achieve positive results for their organization.
In addition to project management skills, a legal operations professional must effectively manage the processes and resources they manage on behalf of the law department. They are responsible for measuring and enhancing the quality of legal services rendered to the organization. They also act as the intermediary between clients and law firms, so they must possess the skills needed to coordinate multiple and often conflicting priorities.
To be successful, legal operations professionals must be proficient in the use of legal technology tools. These tools can range from e-billing systems and matter management to case management systems and contract analysis software. Most large law departments will have a mix of several different legal technology tools. A legal operations professional must be able to leverage these tools to accomplish their objectives of reducing costs, increasing efficiencies, enhancing the quality of legal services and improving client service.
The Role of Legal Operations in Business Efficiency
The pace at which companies are introducing the role of the legal operations specialist is unprecedented. With multiple roles to fill, responsibilities to own, and a vast spectrum of duties in-between, legal operations specialists are now firmly established within companies. For many companies, the implementation of the legal operations specialist role has a direct impact on the efficiency and profitability of their business, as well as the growth of the company. Companies that currently house a legal operations specialist are witnessing the power of efficiency, cost savings, procedures, and process developments in the hands of a highly skilled individual.
First and foremost, legal operations specialists have a data driven role, and in today’s time, we can’t overstate just how important this is. Legal operations specialists who bring the digital IQ to the role, are able to manage workload and resource allocation effectively in a way that is heavily rooted in data. With the correct software and tools, a legal operations specialist can utilize strong analytics skills to not only collect data but to interpret the data and use it to its greatest potential within the business. When used to its fullest capabilities, data analytics are able to provide numerous benefits to the business, including the identification of trends, creating more accurate forecasts, better visibility into spending, enhanced monitoring and managing of legal matters, and evidence based organization, all of which greatly contribute to the success of the company .
Advancing on the use of data analytics, legal operations specialists are also able to use the data findings to successfully streamline processes, ultimately contributing to the efficiency of the business as a whole. For instance, a company that witnesses a significant amount of spend on external counsel across its region, should identify a need for a head count specifically for a legal operations specialist who can reduce unnecessary costs and recommend more cost effective processes. Whether it’s identifying a better way to track billing invoices, or finding new ways to organize the data, a legal operations specialist is able to streamline otherwise cumbersome activities.
On the other hand, legal operations specialists tend to contribute to the overall efficiency of a business by making improved relationships between legal teams and other areas of the business, a top priority. For example, a legal operations specialists who demonstrates strong communication and interpersonal skills, and understands the business and its stakeholders, are more likely to foster collaborative efforts between the legal team and the IT department. A collaborative effort between stakeholders leads to better business continuity and compliance, an increase in both the productivity and efficiency of the business, and a successful overall company.
The impact of the legal operations specialist on the efficiency of a business is evident, and undeniable. With their extensive knowledge and skill sets, legal operations specialists have the ability to efficiently oversee, review and update procedures and processes, while simultaneously improving their budget management. Their current and future impact on companies will continue to expand as they grow.
The Struggles of Legal Operations Specialists
Despite the well-documented benefits of the legal operations specialist, there are many challenges that can prevent them from making an immediate impact. At times, the biggest hurdle is overcoming years of inertia. Lawyers have long been resistant to change and legal process sophistication. Legal operations specialists can face an uphill battle to get firm stakeholders comfortable with the new framework for thinking and the operational changes required.
Legal operations specialists often come in and analyze firm processes and procedures from the ground up. In those cases, the discovery of layers of operational challenge can lead to paralysis by analysis. Rather than tackling one or two challenges effectively, a legal operations specialist may determine that the entirety of the firm needs to be restructured and reorganized. This can lead to loss of momentum at a critical point where early wins are vital to establish a reputation and earn credibility among lawyers and other legal stakeholders.
Along the same lines, a legal operations manager can take over from a stale or unsuccessful law firm chief operating officer. This can dramatically raise the expectations of firm executives. If, however, a legal operations manager fails to deliver results, they may be experienced as a managerial failure rather than an operational advancement.
When hiring a legal operations manager, law firms should also consider the technology fluency requirements of the position. Beyond the technology for which they are seeking expertise, NordicTrack CEO, Scott Wiliams, sees three future legal department technology specialist specializations:
By definition, an expert has extended experience, knowledge, and skill in a particular area. If law firms want to rely on the expertise of legal technology specialists, they need to hire candidates with true specialization — not generalists with broad but shallow knowledge across a range of technology areas.
In addition to the general barriers inherent in any chief operating officer position, data privacy and protection should be paramount concerns for any legal organization. As described in an earlier post, organizationally siloed data can lead to security risks, regulatory compliance issues, and data integrity challenges. Many legal operations specialists are leaving these issues to chief information officers and IT specialists who may or may not have experience with regulatory compliance rules like GDPR. Legal operations specialists should be prepared to develop and leverage data privacy plans and processes.
The Future of Legal Operations
Since legal operations is an evolving practice, it makes sense to consider the trends that will shape the future of the field. Law firms could do well to look to the increasing adoption of AI, machine learning, and data analytics among the corporate legal departments so they can anticipate what clients might demand in the future.
Meanwhile, both general counsel and law firms should consider how changing rules around data sharing and confidentiality and privilege may affect their work, and whether they will even be able to share certain information anymore.
Artificial intelligence and machine learning in the legal sector will continue to develop as the technologies matures. KPMG and Legal Analytics predicted that, by 2025, machine learning for contract review, drafting and e-discovery will replace many human attorneys.
Similarly, the International Journal of Law and Information Technology suggested that, as AI becomes "better" at performing basic legal tasks (such as document review) than humans, it may shift the focus of legal work away from these day-to-day tasks:
If artificial intelligence can perform basic legal tasks better than humans, then the route to a "purer" legal profession may be to reduce the amount of work that consists of such tasks, in order to purge "low-value" work.
It’s also likely that data analytics will play an increasing role in the legal sector in the years to come . A 2017 survey by Consilio found that about 60% of organizations said they had made investments in analytics and AL-heavy functions.
As general counsels’ legal operations professionals adopt more advanced analytics tools, it will be important for firms to anticipate and react to increasing data-sharing and transparency among the law departments they serve. Doing so could help them provide better services, and anticipate trends that could affect the company.
On the other hand, legal departments should be wary of the potential downsides of increasing data transparency between firms. If firms start transforming into something more like "law factories" that can move quickly to "check boxes," what might this mean for their roles as trusted advisers? Will sensitive client information be shared enough to jeopardize the attorney-client privilege, or innocently taint the sometimes-sensitive data their clients rely on every day?
The ways that in which AI, machine learning, and data analytics are changing the legal sector are likely to affect everyone’s relationship with the law firms they work and partner with. Clients clearly want more integration of these technologies into the legal process, just as firms will increasingly adopt these technologies themselves. Observing how clients work with these tools, and anticipating their expectations for how their firms will do the same, will be crucial for both GCs and firms themselves going forward.