Insights

Legal Operations 101: It’s Definition, Role, and Function in Today’s Enterprise

Michael Callier
November 17, 2021

A legal operations function is now expected in any modern legal department, and according to recent research, the number of organizations with a dedicated legal operations team has risen year on year for the past five years. Legal operations or legal ops is ‘on the rise’ for a few reasons, which include the increased pressure on legal departments to be more efficient, cost-effective, and the ongoing requirement for those teams to demonstrate greater profitability.

Whereas, in the past, some legal departments may have been saved from cost-cutting exercises, today’s legal teams are required to demonstrate their value on an ongoing basis and are judged on many of the same KPIs as their peers across an organization. A legal ops function helps to measure and prove the value of the legal department as a whole and raise its profile within an organization. 

Legal ops are also an increasingly popular way for legal departments to manage information and knowledge. With globalization, the ongoing rapid growth of technology, and further integrated commercial activity, businesses are taking in more and more information, which requires management. Legal ops professionals are helping to streamline information management and weather the daily firestorm of data coming into many legal departments.

If you aren’t familiar with legal operations, here is an in-depth explanation of legal ops and its role in today's business environment.

What are legal operations exactly?

Legal operations refer to the operated environment – including the workflows and efficiencies – associated with the delivery of legal services. The legal operators or a legal operations manager role typically covers everything but substantive legal work - like corporate transactions and litigation. Accordingly, legal ops professionals do not necessarily need law degrees.

Legal ops help with all the aspects of delivering legal service that lawyers are not necessarily trained to do at law firms. Although law firms provide excellent substantive training, they incentivize lawyers to maximize their billable hours – an antithetical approach to working as efficiently as possible. That's where legal ops come in -- when lawyers transition in-house, legal ops helps introduce efficient ways for lawyers to deliver legal services.

Legal operations should define and drive initiatives to improve efficiency and effectiveness across the legal department. Among its chief responsibilities are:

  • Managing outside counsel guidelines, legal spend, and the department’s budget (including visibility into, control of, and reduction of legal spend)
  • Optimizing third-party (law firms, ALSPs, tech vendors, etc.) resource performance for maximum value
  • Implementing, measuring, and analyzing metrics that inform decision-making, turning those metrics into actionable ways to improve
  • Implementing tools, such as technology and knowledge artifacts (including playbooks, templates, and checklists), to achieve departmental goals
  • Working across the enterprise to demonstrate the legal department’s value within the organization
  • Performing data analytics and reporting to contribute to overall business intelligence and knowledge management

Why should your organization invest in Legal Operations?

In short, legal operations help to maximize the productivity and profitability of the legal department. By shaping the department's focus areas – and introducing metrics and KPIs that measure and benchmark those focus areas – legal ops help to define long-term and short-term improvements. It can place greater emphasis on data-driven decisions too, as legal ops convert data into information, which then becomes knowledge for the department.

With dedicated legal operations resources helping to optimize the legal department and demonstrating value to internal stakeholders, practitioners can spend more time doing what they love and do best - practicing law and serving clients. Legal ops can also drive stronger relationships with vendors and law firms to increase their transparency and value to the business. 

By deploying technology and consistent processes across the department, legal ops help to standardize and automate repetitive and administrative tasks, such as invoice review, allowing staff to focus on more strategic work and contribute to higher-value projects. With the right vision and investment of time, technology introduced by legal ops can often integrate with systems across the organization to produce better business intelligence and analytics at the enterprise level.

Where to start with implementing Legal Operations?

Organizations aiming to leverage legal ops should begin by seeking out an expert. While this may be a challenge in the current labor market and as legal ops isn't the oldest trade, it's still worth getting a head start with a guide who knows the ropes.

Try to remove barriers by giving legal ops a strategic seat at the table. Give them an opportunity to improve discreet pain points in the legal department and lead cross-departmental initiatives like contract life-cycle management and data integration projects.

With the general counsel’s backing, legal operations can make enterprise-wide impacts and increase a legal department’s strategic value to the business.

Michael Callier is VP, Head of Solutions and Consulting at Factor. An accomplished and award-winning corporate lawyer, legal operations director, and consultant with nearly 20 years of experience in law firms and corporate legal departments leading cross-functional teams and counseling executive leaders in fast-paced environments.