This evolving and vital function within many corporate law departments is propelling a seismic shift that is taking the form of strategic planning, financial management, project management, and technology expertise. All which enables in-house lawyers to focus on what they were hired to do 鈥� practice the law.

In a recent online panel discussion at the Corporate Legal Operations Consortium (CLOC) annual event, Legal Operations of Tomorrow: The General Counsel Perspective, a panel of in-house counsel discussed the importance and impact of legal operations and how each general counsel personally made it a focal point within their departments and will continue to do so into the future. The forward-thinking panelists described the changes they are witnessing within their departments, including modifications to the legal business pricing model that challenges the familiar target of the billable hour.

Next big shift for legal departments

Indeed, the billable hour continues to be a point of contention for corporate law departments. While some experts have advocated for expanding timekeeping to corporate law departments (a seemingly unpopular proposition), one panelist suggested abolishing the billable hour and timekeeping completely for law departments. 鈥淥ne area that definitely needs change is the billable hour,鈥� says , Chief Legal Officer of securities exchange IEX Group. 鈥淚t is archaic, it creates the wrong incentive, it drives inefficiencies, and quite frankly no one likes it,鈥� Barnett said, adding that in-house lawyers don鈥檛 like it because it forces them to keep track of their time to the minute; and general counsel don鈥檛 like it because it makes them purchase time and review reams of billing records.

Besides, value isn鈥檛 tied to some arbitrary number, she explained, and time doesn鈥檛 reflect quality, execution, or deliverables. Spending a lot of time on a matter doesn鈥檛 mean that time was well spent, she said, adding that hourly billing doesn鈥檛 align with client objectives, and most importantly, it is a roadblock to the efficient use of legal technology.

So, if not the billable hour, what is the way forward? Panelists agreed law departments should instead be judged on what they鈥檝e accomplished and whether their work achieved the result required. Further, legal operations teams can use technology to enable in-house attorneys to get the work done in the most efficient way possible, regardless of the time spent. 鈥淢easuring the cost of legal work and pricing out the deliverables isn鈥檛 rocket science,鈥� Barnett noted. 鈥淲e know how much a trademark filing or a patent filing will cost.鈥�

Instead, the future of legal will see law departments designing their services around deliverables, objectives, outcomes, and partnerships with the business 鈥� with legal ops paving that path forward.

Embracing legal ops professionals

Given this insight, what is the vision of legal ops for the future? And, what鈥檚 the right mix of people 鈥� lawyers, tech experts, or business savvy professionals 鈥� for the legal ops team?

, Executive Vice President and General Counsel at cloud computing company VMware, said she is certain that legal ops is one of the best functions ever created for the industry, and it will continue to grow. 鈥淚鈥檝e seen lawyers and non-lawyers in these roles, and I don鈥檛 think it matters,鈥� Fliegelman Olli said. 鈥淭heir background and willingness to learn is what really matters for the team.鈥�

More importantly, having a legal ops team dedicated to analyzing data and implementing new technologies takes lawyers out of the habit of making decision based on gut feelings alone. Legal ops 鈥渕akes us more impactful to the business,鈥� she said. 鈥淎nd legal ops look across the board at all of our operations, making lawyers more effective and relevant to the business.鈥�

As corporations scale their businesses, the legal department is generally seen as a cost center; however, having an operational person reaching across the business can help general counsel gain a holistic perspective in growing the firm and change that perception.

鈥淚t is almost like bringing in a non-lawyer or 鈥榬ecovering鈥� lawyer as a COO,鈥� explained Mark Cho, General Counsel and Chief Compliance Officer at B Capital Group. That expansion will come faster than people realize because law departments will start asking why they don鈥檛 have someone thinking about the business side of law, including operations and growth. In many cases, hiring a legal chief operating officer may be the answer.

IEX鈥檚 Barnett agreed, saying that a corporate law department needs to be run like a business. 鈥淎t the end of the day, legal operations is the single best way to modernize the legal industry 鈥� and it is coming,鈥� she said, noting that the Big Four accounting firms are already creating legal technologies in this space. And if traditional law firms don鈥檛 adapt and adopt, they may find themselves in a position where others that do adapt will fill that void, she added.

With respect to all of these changes 鈥� the billable hour, improving client relations, and budgeting 鈥� much of it is tied to a department鈥檚 understanding of how to utilize its legal ops team and the enabling technologies to make the department more efficient and effective. For example, legal ops could take the lead in creating a database or knowledge management system powered by artificial intelligence that contains the collective knowledge that exists within the department, such as a commonly used clause in a contract. Indeed, in many ways such as this, legal operations can drive key initiatives and maximize efficiencies.

But will legal operations ultimately kill the billable hour? That remains to be seen to be seen, of course; however, law department leaders know change is coming, and in some cases, it is already here and is rapidly accelerating.

CLOC further that departments鈥� legal operation teams should develop.

Core Function: Business Intelligence

By developing a business intelligence competency, legal teams can reach a desired state of strategically using data rather than heuristics, uncover hidden trends, find new efficiencies, and focus the legal team on clear and measurable outcomes that make difference to the business.

However, to align to business principles, allocate resources appropriately, and to develop internal talent, it is first imperative for the team to know the why, what, who and when aspects of the work. Once this knowledge is acquired, a legal team can continuously improve how it performs the work. Fortunately, this data is accessible through dashboards and basic data analysis in all major enterprise legal management platforms.

The data from these systems will assist the team in determining when the department is:

• • • focusing its energy on high complexity/high strategic impact work (g., major acquisitions or divestitures, impact business litigation, complex revenue generating contracts, major projects, and investigations);
    • appropriately providing internal resources to low complexity/high strategic impact work (g., term sheets, letters of intent, key procurement contracts, and major refinancings);
    • effectively managing external resources for high complexity/low strategic impact work (g., compliance, routine litigation, non-strategic IP management, and taxation); and
    • offloading low complexity/low strategic impact work (g., standard low-value contracts and disputes, marketing approvals, and administrative work).

Measuring this data and reviewing it regularly will lead to continuous improvement in how the key people within the legal department solve the most important problems for the business.

Leverage data from existing core tools

E-billing and contract management systems have widespread use within legal departments; however, data is rarely mined from these systems to take actionable steps that improve the legal function and better serve the business. Basic off-the-shelf data gathering and analysis in each system would improve the average department鈥檚 business intelligence competency immediately.

For e-billing, for example, run off the shelf reports and dashboards to see how the department鈥檚 total spend and partner/associate ratios compare to industry averages for the work performed. Combining this with the data from that gathered from the department鈥檚 enterprise legal management systems will provide actionable insights on how to best allocate resources. It will also allow department leaders to effectively engage with business leadership around the numbers.

With respect to contract management, measure turn-around-times and where the most time is being spent in the negotiation phase. Make tailored improvements based on the findings, but most importantly, align these metrics with how the business development team is measured. This will allow department leaders to tell a compelling story of how the department has collaborated with other business units to support revenue generation and shorten the lifecycle of deals.

Through these processes, the department can establish that it is focused on leadership priorities effectively within a budget, allowing leaders to present data that supports resource requests easily and quickly.

Continuously measuring effectiveness

Now, the legal department has a rich set of data that it can present to corporate leaders to facilitate effective dialogue and collaboration. Do not squander this opportunity by ineffectively communicating or failing to measure your communications strategy as well.

Fortunately, implementing business intelligence to measure communications is easy. Marketing and corporate communications teams have email platforms at their disposal. Start running your key communications on department initiatives in the enterprise platform. Measure open rate, read rate, click rate, and other similar digital engagement metrics. This data is benchmarked against all internal communications and aggregate global benchmarks.

Now, you will know which messages or communications format are resonating the most with key business partners, allowing you to target future communications, training, and collaboration opportunities that will ultimately lead the legal department into a trusted adviser relationship with more business partners.

This article was written by Marc Jenkins, CEO & Founder of Adappt.legal

This change within the legal profession has brought about an undeniable wave of maturation and innovation on in-house legal teams, leading to a growing dependence on the importance of legal operations and the professionals that manage them.

That level of growth is precisely what keeps Corporate Legal Operations Consortium (CLOC) President Mary O鈥機arroll up at night, asking herself questions such as: What does the legal profession of the future look like? And how do legal operations best t in?

Forum asked O鈥機arroll to expand on these questions; we also asked CLOC, which began as a book club of loosely knit friends and colleagues (as CLOC legend goes), to become a closed forum for legal operations professionals that is 2,500-plus members strong.

A New President, a Fresh Vision

Earlier this year O鈥機arroll, Director of the Legal Operations, Technology & Strategy team at Google庐, was voted in as president of CLOC. She gave her first keynote speech at the CLOC Institute in Las Vegas. The Institute has become so relevant that the coveted 鈥渄iamond sponsorship鈥� for vendors sold out in less than an hour for the 2019 Institute. With so much momentum behind the organization, the president has big plans for CLOC, both regionally and globally; but she is quick to point out, this isn鈥檛 about growing the organization for the sake of bolstering membership numbers or world domination.

For O鈥機arroll, this is about CLOC鈥檚 starring role as an inclusive community forum where members come to a legal ops marketplace of ideas and feed off each other鈥檚 electricity, learning best practices in starting or improving their legal ops department. For its core constituency 鈥� legal ops professionals, technology vendors, law schools and now more prominently, law firms 鈥� this is about collaboration and experimentation.

However, CLOC hyper-growth is not her end goal, O鈥機arroll says. 鈥淭he reason we started this is because we want to learn from one another,鈥� she explains. 鈥淏ecause of the nascent stage legal ops is still in, we are all making this up as we go along.鈥�

Legal Operations Is Now

It is no secret that the idea of infusing legal ops into in-house legal teams continues to experience exponential growth, and O鈥機arroll says she sees this as a 鈥済lobal movement鈥� in which the change in how legal services are structured and delivered is happening worldwide, with general counsel from Fortune 500 companies to smaller start-ups becoming part of this trend.

鈥淭here was a moment when I recognized how strong this movement was,鈥� she says. 鈥淲e opened up the Institute in Vegas this year with a video montage featuring GCs from some of the top companies in the world telling us how important legal operations is and how impactful and valuable it is to their organizations,鈥� she said.

Indeed, many of the world鈥檚 largest companies have jumped on the legal ops bandwagon. Companies like Oracle, The Gap and Westpac have said publicly that legal operations departments are becoming a vital part of doing business. But like all movements which march us toward change, there can be growing pains.

Bringing Law Firms to the Party

To be sure, one of the most significant challenges is how CLOC can introduce possible new law firm participants into what has been a safe space for corporate legal department professionals to share best practices. O鈥機arroll notes that she and the CLOC board don鈥檛 have the answers yet, but they will. Launched earlier this year, CLOC is trying out a new type of community for law firm business professionals. 鈥淲e are excited about it,鈥� she says. 鈥淲e are targeting folks in legal operations at law firms.鈥� She explained that this would mean anyone at the firm who is not an active legal practitioner, such as:

• • • Pricing officers
    • Marketing individuals
    • Innovation officers
    • Chief technology officers

But this development has not been without pushback from some CLOC members, some of whom were less interested in allowing law firms into the conversations and valued having a private place to learn from each other. O鈥機arroll believes differently.

鈥淭he only way we can progress is if we start having more inclusive conversations with other parts of the industry and being direct, open and honest with one another,鈥� she said. 鈥淲e always wanted to bring law firms into the mix. They鈥檝e been knocking on the door and asking us, 鈥楬ow can we be part of the conversation?鈥欌��

At present, law firms won鈥檛 have all-access memberships, but will be part of a separate online community to facilitate discussions between law firms. Legal ops members are encouraged to opt in if they want to be a part of that dialogue.

Don鈥檛 Reinvent the Wheel

Here is the thing about CLOC, according to O鈥機arroll. If you are mulling the idea of starting a legal operations department, you do not need to reinvent the wheel. Instead, you can come to CLOC and learn how to implement this role into your organization.

At some point, corporate general counsel 鈥� who are already in charge of a panoply of activities and duties, from budget to technology implementation, to being a strategic advisor to the board or CEO 鈥� have to ask themselves, 鈥淗ow can we manage all of that?鈥� That鈥檚 where legal ops come in, O鈥機arroll says.

鈥淚 encourage any reluctant GCs out there to start talking to other GCs who have hired for a dedicated legal ops role,鈥� she adds. 鈥淢any of them will be willing to be a champion and tell you how impactful it has been to their organization.鈥� Indeed, some of the largest companies in the world have become legal ops evangelists, she notes. 鈥淎nd that says a lot to me about the recognition and understanding of legal ops鈥� value as it continues to mature.鈥�

And the quickest way to demonstrate that support is to perform their functions in a way that emphasizes efficiency, lowers cost and provides greater value in the delivery of legal services.

A new report, 鈥� published by 成人VR视频 Institute, the International Bar Association (IBA), the Corporate Legal Operations Consortium (CLOC), and UK-based legal research firm Acritas 鈥� uncovers the trends that are driving corporate law departments today. The report comes to the inescapable conclusion that in order to maximize the value of the legal services delivered, corporate law departments need to not only pay attention to reducing the cost of those services, but also improve the value and impact that those legal services have on the organization.

The report identifies several industry-wide trends 鈥� from fostering innovation to fielding diverse teams 鈥攖hat high-performing corporate law departments are already embracing and utilizing to improve their value, effectiveness and efficiency. The report suggests that corporate law departments that follow these industry trends and incorporate these improvement levers can create a higher performing legal function and enhance the impact that their department makes on the organization鈥檚 overall success.

Diversification of skill sets

The report underscores the trend that creating teams with diverse skillsets and experience lifts performance. Identifying 23 distinct skills, the report clusters them around three distinct types of lawyers 鈥� the 鈥渟pecialist expert鈥� lawyer, the 鈥減ractical service鈥� lawyer and the 鈥渂usiness relationship鈥� lawyer 鈥� each with their own added value and key functions.

While it is rare to find an individual lawyer that can embody all three skill types, the highest performing teams allowed for this, forming teams with lawyers of each distinct type and allowing them to work together. Further, other non-lawyers 鈥� legal operations professionals, professional project managers, account managers and technology/data experts 鈥� could also be brought in to complement these legal teams.

Developing project management expertise

Among high-performing law departments, one factor appears to stand out: project management.

According to the report, as the legal industry embraces project management to improve internal organization, coordination and efficiency, corporate law departments that follow suit can improve their performance and value. It also shows that even improving the clarity of communication with the organization鈥檚 management by using comprehensive briefings with clear objectives, scope and expectations, goes a long way to establishing the law department as one that is collaborative and effective.

Create collaborative partnerships

Building on that communication and collaboration, corporate law departments that seek stronger partnerships with their outside legal service providers, whether outside counsel or alternative providers, strengthen their hand in reducing costs and increasing the value they receive from their legal vendors, the report states.

Clearly, this is one of the corporate law department鈥檚 most important roles. Because most legal functions rely on outside legal support for the delivery of services, additional capacity or special expertise, how these relationships unfold are vitally important and enhance the impact the department has on the organization.

The report suggests, as collaborative partnerships become the trend industry-wide, individual law departments should take a look at how they manage their own relationships.

Provide for gender diversity on legal teams

The research that underpins this report clearly shows that gender diversity on legal teams allows those teams to achieve significantly higher performance ratings. And yet, both law firms and in-house teams continue to lose female talent at the most senior levels.

There are many reasons why women leave the legal profession 鈥� a perceived lack of fairness in opportunity and pay, hurdles to career advancement, overt sexual discrimination and harassment, and other reasons. This has left an environment in which just one-in-four general counsel are women.

While the trend is moving toward progress (albeit, slow progress) on this issue, high-performing corporate law departments recognize the value in having diverse representation on their teams, the report notes.

Creating an environment for successful innovation

While innovation can seem like the latest industry buzzword, it is the creation of an environment in which innovation is supported, attempted and evaluated, that can make the real difference in the performance of a corporate law department.

Clearly, the most-cited examples of innovation focus on adapting new technology, although any area of work that utilizes new approaches or improved processes could be thought of as innovative. This would include using alternative pricing models, finding new ways to employ resources such as with contract attorneys or legal managed services and even encouraging other valuable services such as training and sharing knowledge.

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