Legal Operations Management

Introduction

To tackle the "do more for less" challenge, the legal industry is undergoing a transformation driven by innovation, technology adoption, and operational efficiency. Legal departments are increasingly recognizing the value of legal operations roles in streamlining processes, reducing costs, and improving collaboration. Tools like electronic signatures, workflow automation, and data management systems are becoming standard. Additionally, organizations such as CLOC support the growth of legal operations, helping departments adopt best practices and leverage technology to adapt to evolving business needs. CEOs and Boards now expect legal departments to operate like business units, maximizing productivity, streamlining processes, and creating value while controlling costs. 

However, what exactly does legal operations entail, what functions does it encompass, how has it evolved into a critical component of modern legal departments, and what role does the legal operations manager fulfill?


Evolution of Legal Operations

Legal operations has evolved alongside in-house counsel, reflecting broader shifts in the legal industry. The development of in-house legal roles can be traced through four key generations, each shaping the role of legal operations:

  • The Golden Era (Civil War to 1930s): In-house counsel played a strategic advisory role, working closely with businesses while corporate law firms began to emerge. Legal operations was virtually nonexistent, as legal teams focused primarily on providing legal guidance rather than managing processes or costs.

  • The Rise of Big Law (1940s to 1970s): Large law firms dominated corporate legal work, relegating in-house counsel to a secondary role. Legal operations remained minimal, as companies relied on external firms with little regard for cost control or efficiency.

  • The Reemergence of In-House Counsel (1970s to 2000s): Growing regulatory demands led corporations to bring legal expertise back in-house, reducing reliance on expensive law firms. Legal operations began to take shape, initially focused on managing external counsel and basic cost control.

  • The Productivity Era (2000s to Present): In-house legal teams became integral to business strategy, with General Counsel taking on leadership roles. As legal departments faced increased workloads and budget pressures, legal operations rapidly expanded. Initially, from the early 2000s to mid-2010s, the function evolved from cost management to leveraging technology and automation. Today, legal operations is an innovation-driven function, optimizing workflows, improving efficiency, and transforming legal departments into business-oriented units.

This evolution underscores the shift from traditional legal advisory roles to a more strategic, efficiency-driven approach, positioning legal operations as a core function in modern legal departments.


The Role of Legal Operations

Legal operations is a multi-disciplinary function within legal departments that optimizes legal service delivery by improving efficiency, implementing technology, and aligning legal work with business objectives. It focuses on strategic work prioritization, resource management, and workflow optimization, enabling in-house attorneys to dedicate more time to legal practice by streamlining administrative and operational tasks.

Acting as a “right-hand person” to legal teams, legal operations removes barriers that hinder productivity, standardizes processes, and eliminates redundant efforts. It plays a key role in managing legal spend, ensuring compliance, and driving innovation through data analysis, technology adoption, and best practice implementation. The scope of legal operations varies depending on department size, maturity, and budget, requiring expertise in project management, financial oversight, and operational strategy to enhance overall department performance.

Strategic planning is key to legal operations, which collaborates across the legal department—from general counsel and lawyers to paralegals, legal assistants, and admins. It helps develop long-term strategies and align resources with departmental goals.

However, what specific strategies should be employed, and which key focus areas must be considered when developing an effective legal operations strategy?

Key Functions of Legal Operations

Financial planning is a crucial aspect of a strong legal operations function, involving departmental budget management. Legal operations establish processes and systems to track legal spend, accruals, and budgets, identifying cost-saving opportunities. Close collaboration with the finance department ensures compliance with financial requirements.

Reporting & analytics are essential for data-driven legal operations. By tracking key KPIs, legal spend, and resource allocation, legal operations optimize costs and improve decision-making. Using e-Billing software, they generate reports, communicate legal metrics to executives, and align legal strategy with business goals.

Vendor management is crucial for legal operations, ensuring strategic partnerships with law firms, consultants, and specialists. By analyzing legal data, they determine whether in-house teams or outside counsel are best suited for tasks. Legal operations establish vendor management programs, set performance benchmarks, negotiate fee agreements, and enforce billing guidelines.

Technology enablement & adoption are transforming legal services. Legal operations implement modern tools like e-Billing, contract and matter management, and e-signature solutions. A key priority is building an integrated ecosystem where technologies seamlessly share information.

Because of these emerging focus areas, legal operations play a key role in supporting the general counsel as a strategic partner by enhancing visibility into legal spend, vendor performance, and metrics, enabling data-driven decision-making.

Frameworks and Core Competencies for Maturity

The evolution of legal operations has given rise to communities like The Corporate Legal Operations Consortium (CLOC) and the Association of Corporate Counsel's Legal Operations Section (ACC). They offer frameworks to guide legal teams in adopting best practices, while also highlighting the technology tools that can help legal departments achieve full operational maturity. CLOC has identified 12 core competencies that legal departments should strive to incorporate into their operations. These competencies are categorized into three levels of maturity: Foundational, Advanced, and Mature.

At the foundational level, legal operations professionals focus on managing budgets, controlling costs, and evaluating the return on investment from vendors. They collaborate with outside counsel, other departments, and key stakeholders to ensure alignment between legal priorities and company goals. Additionally, they automate day-to-day processes and focus on managing core competencies.

As departments advance, the role of legal operations expands to include overseeing managed services, data analytics, and performance indicators. Legal operations professionals foster a cohesive team culture, allowing attorneys to focus on substantive work, while also enhancing global communications and talent retention.

At the highest level of maturity, legal operations manage complex areas such as litigation support, intellectual property management, knowledge management, and information governance. They refine policies, ensure compliance, and contribute to long-term strategic planning, helping to guide business decisions and align legal processes with overall business objectives.

The ACC Maturity Model provides benchmarks that legal departments can use to assess the maturity of their operations. These include areas such as Change Management, Contract Management, eDiscovery, External Resources Management, Financial Management, Information Governance, Innovation Management and more. These benchmarks offer a comprehensive guide for legal teams striving to enhance their operations and align them with broader organizational goals.

However, how should we precisely define efficiency once our maturity level has been established, and what actions can we take to enhance our efficiency?


The Impact of Legal Operations on Department Efficiency and Perceptions

The Wolters Kluwer Legal & Regulatory and Priori survey aimed to assess how legal departments perceive their efficiency, identify their priorities, and examine their use of technology.

Key findings include:

  • Efficiency Perception:

    • Only 54% of respondents believed their department operates efficiently.

    • Senior members reported higher efficiency (63%) than junior members (35%).

      This disparity may be due to differences in incentives, responsibilities, and familiarity with technology-driven improvements.

  • Impact of Legal Operations Professionals:

    • The presence of a legal operations professional significantly influenced efficiency perception.

      • 63% of departments with a legal ops role reported efficiency, compared to 46% without one.

  • Efficiency Among Senior and Junior Staff:

    • Among senior staff:

      • 74% in departments with legal ops professionals reported efficiency, compared to 55% in departments without.

    • Among junior staff:

      • 44% with a legal ops professional saw efficiency, versus 24% without.

  • Department Size and Efficiency:

    • Smaller teams (≤5 lawyers) reported higher efficiency (61%) compared to larger teams (>5 lawyers, 43%).

    • However, legal operations professionals consistently increased perceived efficiency, especially in:

      • Larger teams: 58% with legal ops professionals vs. 30% without.

      • Smaller teams: 67% with legal ops professionals vs. 57% without.

How is efficiency measured actually, and what are the key focus areas used to assess it?

Top Challenges

A survey reveals that departments without a legal operations professional face major challenges like high work volume (91%), contract management (86%), and unstructured data (83%). In contrast, departments with a legal ops professional struggle more with unstructured data (83%), communication and training within business teams (76%), work volume (76%), and high outside counsel costs (76%). Although there’s a preference for hiring more lawyers, the data suggests that legal operations professionals can significantly enhance efficiency by streamlining processes.

Key priorities for legal departments, according to the survey, are improving processes and technology (88%), knowledge management (78%), and strategic planning (74%). Legal operations professionals are crucial in leading these initiatives.

When it comes to technology, the most effective tools for boosting legal department efficiency include digital signatures (74%), legal research tools (66%), communication platforms (63%), contract management systems (59%), legal and matter management software (53%), and task management tools (51%).

The top five legal operations services most commonly provided are:

  • 92% Process development and project management

  • 84% Data analytics

  • 84% Technical and process support

  • 84% Vendor management

  • 81% Financial management

The number of legal operations staff varies by company size:

  • Small companies (<$1B): 1 legal ops professional

  • Medium companies ($1B-$10B): 7 legal ops professionals

  • Large companies ($10B+): 13 legal ops professionals

Key Legal Functions in Legal Operations

Here's a look at how the presence of a Legal Operations Manager can transform the way an organization handles key legal functions, compared to operating without one.

Compliance

With Legal Ops, legal teams automatically include necessary clauses and parties, ensuring consistent compliance across contracts.
Without Legal Ops, compliance tasks are handled on an ad-hoc basis, leading to missed clauses or incorrect parties.

Cost Savings

With Legal Ops, analytics track spending and identify opportunities for cost reduction, optimizing legal spend.
Without Legal Ops, time and spending on external counsel are estimated without clear visibility, leading to inefficiencies.

Data Integrity

With Legal Ops, contracting trends are analyzed to improve processes and inform business decisions.
Without Legal Ops, manual contract searches may miss critical details, resulting in extra costs and missed opportunities.

Process Efficiency

With Legal Ops, contract steps are automated, and workflows enable faster task completion with fewer errors.
Without Legal Ops, bottlenecks increase as manual tasks pile up, slowing down the legal team's work.

Sales Velocity

With Legal Ops, contract tracking is streamlined, accelerating execution and helping meet sales targets.
Without Legal Ops, multiple systems are used to track contract statuses, prolonging sales cycles and risking missed revenue goals.

Vendor Management

With Legal Ops, technology and automation expedite contract reviews, reducing renewal and billing issues.
Without Legal Ops, manual supplier contract reviews consume the legal team's time, slowing onboarding and potentially straining vendor relationships.

Conclusion

Legal operations professionals play a key role in improving efficiency perceptions within legal departments. Senior members often view their departments as more efficient than junior colleagues, likely due to differing responsibilities and incentives. Smaller teams report higher efficiency, while larger teams benefit more from legal operations professionals, who help streamline processes and reduce administrative burdens. Despite evidence that legal operations enhance efficiency, many legal departments remain uncertain about their value. In departments without a legal operations professional, 40% believe hiring another attorney would improve efficiency, while only 23% favor adding a legal operations role, and 37% are unsure. As companies recognize the value of legal operations, their importance has steadily grown. The survey also reveals that most respondents believe their legal departments are inefficient, with smaller departments and senior respondents more likely to feel otherwise. For those with legal operations professionals, efficiency perceptions are higher, and pain points such as work volume are less problematic. According to the 2022 ACC Chief Legal Officers Survey, 60% of legal departments now employ at least one legal operations professional. The top priorities for improvement include processes and technology, knowledge management, and strategic planning. However, the lack of clarity on their role and benefits creates a knowledge gap that hinders the integration of legal operations into in-house teams, despite its clear impact on department efficiency.

Given all this information, it becomes clear that a typical lawyer should not be burdened with these administrative tasks. This is precisely why the role of a Legal Operations Manager is essential. But how can organizations develop a strategic approach to effectively identify, recruit, and integrate a Legal Operations Manager to maximize efficiency within their legal department?

The emerging Role of a Legal Operations Manager

Legal operations professionals play a pivotal role in driving change and enhancing efficiency within legal departments. As generalists, they manage a broad range of responsibilities, overseeing the integration and optimization of various processes across the department. They oversee updates to processes, workflows, and communication structures while ensuring compliance with industry-specific regulations. Their responsibilities extend to supporting human resources by assisting with recruitment, onboarding, training, task allocation, and managing internal resources like continuing legal education (CLE) programs, performance management, employee recognition, and succession planning.

Additionally, legal operations managers are instrumental in implementing technology solutions such as e-billing, electronic signatures, and workflow automation to streamline operations and improve transparency. They manage departmental budgets, optimize processes, and foster collaboration across departments, acting as change agents to improve overall departmental performance.

The scope of legal operations evolves with departmental maturity, shaping team structure and leadership roles. The ACC’s Legal Department Maturity Model helps benchmark this growth, guiding hiring and team development across three levels:

Level 1: The Manager – Focuses on identifying pain points, automating processes, managing legal spend, and improving reporting for data-driven decisions.

Level 2: The Optimizer – Enhances vendor collaboration, optimizes operations, and works with IT to implement technology for tracking and reducing legal spend.

Level 3: The Strategizer – Integrates legal operations across departments, predicts needs, and drives efficiency through proactive solutions.


How to choose the first legal manager to match the operational maturity level of the legal team?

Key Considerations and Steps in building a Legal Ops Function

Your first legal operations hire should drive operational efficiency, understand the core business, translate business needs into legal requirements, support company growth, and manage law firm performance effectively.

The decision to hire a full-time employee for legal operations depends on the size of your legal team and organization. Larger departments benefit from a full-time role dedicated to driving efficiency, integrating technologies, and streamlining processes. Although hiring a part-time employee or outsourcing certain functions may be a viable option for smaller teams.

Legal operations leaders are primarily business experts, not necessarily lawyers, though a legal background can add value when working with law firms and attorneys. Legal operations leaders are valued for their business management skills as much as their legal knowledge. They may be lawyers shifting to a business career, analysts with a quantitative focus, MBAs bringing operational and financial discipline, or JD/MBAs combining both legal and business expertise. Organizations without a formal legal operations role can promote existing team members, such as those already involved in vendor management or paralegals familiar with legal processes, to the role of legal operations manager, reducing training needs and leveraging their knowledge of the department.

Legal operations collaborate with various departments to optimize processes and increase efficiency. With finance, they improve billing, budgeting, and accrual data for better spend predictability and compliance. They also integrate technologies for seamless information sharing. In sales, legal operations streamline contract management and implement tools like e-signatures to speed up the sales lifecycle. With HR, they advise on employment law, support training, and assist with compliance and policy development. Legal operations also work with engineering to manage IP, mitigate risks, and support innovation, while collaborating with IT to ensure up-to-date technologies and provide training. Additionally, they help with facilities-related contracts and support general administrative tasks like event planning and staff management.

When considering the hiring of a legal operations manager, it’s important to focus on key points that ensure the role is successfully integrated into the organization. Thought of as a missing connecting point to bridge the gap between legal and business functions. If you identify your missing points and weaknesses—such as coordination, business alignment, and legal technology—you will be much more efficient in choosing the right specialist to bridge these gaps. These considerations will guide the decision-making process and ensure the legal ops function effectively contributes to the overall efficiency and growth of the legal department. Below are the critical steps to consider when building a legal operations function.

Introducing a legal operations function can be a game-changer for many organizations, but it is often met with resistance, particularly when stakeholders are unsure about its role and potential impact.

Therefore, you should consider the following key points when hiring a legal ops professional:

1. Pick the Right Moment:
 A legal operations function should be introduced when lawyers in small companies spend less than 60% of their time on legal work (and 80% for larger companies). For new departments, hiring a legal ops professional within 6–8 months of the first in-house lawyer can make a substantial difference.

2. Define Your Goals and Secure Organizational Buy-in:
 To gain support for a legal ops function, it's crucial to define clear objectives that align with broader business goals such as efficiency, revenue growth, and better resource management. Having the backing of executives, business partners, and the legal team increases the likelihood of approval. Presenting legal ops as a strategic function, not just a cost center, can help secure organizational buy-in.

3. Use Data to Make the Case:
 Leveraging simple data points, such as contract turnaround times, outside counsel spend, and process inefficiencies, can effectively make the case for a legal ops role. Data-driven insights are particularly valuable in encouraging broader department adoption and showcasing immediate ROI.

4. Build a Diverse Team:
 Create a well-rounded legal ops team by incorporating professionals with expertise in technology, analytics, finance, and, ideally, a legal background. Diversifying your team ensures a holistic approach to solving challenges. If hiring a full-time legal ops professional isn’t feasible, an internal lawyer can initially help integrate legal ops functions.

5. Prioritize Quick Wins:
 Focus on solving urgent pain points early on, such as implementing e-signatures or automating contract management, to build momentum and demonstrate value. These "quick wins" will showcase the potential of legal ops and help gain broader acceptance within the department.

6. Ensure Cross-Functional Communication:
 Effective communication across departments is key to implementing legal ops successfully. Legal ops teams should over-communicate goals, changes, and the value of their initiatives to ensure smooth adoption. Building strong relationships with IT, finance, HR, and other departments ensures long-term success and alignment with business objectives.

7. Embrace Technology and Leverage Existing Tools:
 Adopting technology is one of the most impactful ways to improve legal operations. Tools like contract AI, e-billing, and workflow automation can help streamline tasks, even if headcount cannot be increased. Integrating tools already in use across departments can enhance efficiency by improving the flow of information and automating repetitive tasks.

8. Create an Open-Door Communication Policy:
 Establishing an open channel for legal-related questions allows the legal team to share goals, educate other departments, and engage business stakeholders. This increases collaboration and helps broaden the reach of legal knowledge across the organization.

9. Measure Success & Maintain Best Practices:
 To assess the effectiveness of the legal ops function, define key performance indicators (KPIs) and continuously measure ROI. Participating in industry conferences, reading case studies, and staying informed about best practices will allow legal ops teams to refine their strategies and continuously improve their operations.

Conclusion:
The integration of a legal operations professional can help organizations streamline their legal functions, enhance communication across departments, and implement technology-driven solutions. By following a structured approach and focusing on collaboration, quick wins, and strategic technology adoption, legal ops can become a cornerstone of efficiency, supporting both short-term goals and long-term growth.

2025/02/02

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