Could a Legal Operations Role Benefit Your Organization? Here’s How to Decide

Between recruiting new talent, creating budgets, cooperating with outside counsel, managing billing issues, overseeing diversity and inclusion initiatives, and staying abreast of rapidly evolving technologies, general counsel and chief legal officers are increasingly finding themselves with less time to practice law.

In an effort to increase operational and financial efficiencies and enable these heads of legal departments to return to their primary focus of practicing law, many companies have recently created legal operations roles. But what does the role entail? And can your organization be improved with a legal operations professional?

What Is Legal Operations?

In order to decide, you will first need to educate yourself on what legal operations can and cannot do.

By focusing exclusively on the “business of law,” a legal operations professional or team enables a more efficient in-house legal department and empowers the organization’s lawyers to be more productive in advancing mission-critical business objectives. In fact, according to the 2018 Chief Legal Officer Survey, 73% of organizations said that hiring an administrator or legal operations professional was the biggest factor in optimizing the efficiency of their legal department.

Sharon Morrison, senior legal operations manager at Citrix, explained: “The great thing about a legal operations professional or team is that they help a legal team run like a business by incorporating financial discipline and legal spend management oversight.”

Behemoths like Liberty Mutual, Google and The Gap—all of whom have massive compliance and legal teams—employ legal operations professionals to drive efficiencies in areas like knowledge management, budget oversight and vendor selection and management. These teams also help ensure that outside counsel is utilized wisely, at times limiting the number of law firms an organization uses and creating more efficient fee arrangements with those firms. They evaluate and implement new technology tools and platforms. They may also be tasked with recruiting, developing and retaining the department’s legal talent, and benchmarking salaries. As more legal departments realize the payoffs of having an operations specialist in-house, this hiring trend is expected to pick up speed.

Can It Really Help You?

Once you understand what legal operations can do, the next step is to determine the problems that need to be solved at your organization and whether legal operations can address them. Many legal teams think of legal operations professionals as some kind of panacea—a remedy for all that ails their departments—but this is not necessarily true.

“Legal operations is like the Container Store,” said Eric Hartline, senior vice president and counsel at Guardian Life. “It presents all of these solutions for problems your legal department might or might not have. If you only have five pairs of socks, you don’t need sock drawer organizers.”

For example, do you really need a dedicated operations person or just better technology (e.g., corporate governance software)? To get a firm understanding of need, make sure you ask yourself and your team the right questions. What is your goal in having a legal operations professional? What problems are you trying to solve? What are the criteria necessary for this role? What is the budget? Are you seeking efficiencies through intelligent fiscal practices or automation? To whom would this individual report?

Having a clear, defined understanding of how a legal operations manager can support your department will empower them to deliver optimal value.

I Need This. Now What?

If you have decided to move forward with a legal operations department, great. But you will need to choose your candidates for the role carefully and overcome potential internal and external resistance to the change.

Both lawyers and nonlawyers are viable candidates for the legal operations role. While the candidate phenotype may vary depending on your organization’s size and life cycle stage, one non-negotiable quality for a legal operations professional is business acumen. A legal operations person must grasp your organization’s core business and be able to provide strategic guidance on both legal matters and the business issues influenced by legal matters.

They should also have the expertise to collaborate with lawyers and leaders across the organization, identify and implement technologies to save the department time and money, manage the performance and costs of outside counsel and vendors, and align legal department activities with the company’s growth objectives. Make sure any candidate has the appropriate analytical and managerial capabilities to succeed, as they will be involved with negotiations, people management, and strategic and financial decisions across the entire organization.

When it comes to establishing a legal operations role within your legal department, there is no standard, one-size-fits-all advice. A good candidate may be an internal individual who is already familiar with the company, an attorney who has previously done work for the organization, or someone who is unaffiliated. Companies should consider utilizing a recruiter to help identify your organization’s needs and tailor your job specifications.

How Do I Get Everyone on Board?

As with any sea change, it will take time for the industry—and your organization—to adapt to the idea of a legal operations function. Your external firms may resent the impact of a legal operations professional’s efforts to curb spending on outside counsel. Your in-house lawyers may feel frustrated about having to adapt to new technologies and processes. Legal operations professionals must be adept at building strong relationships with legal team members and cross-functional colleagues, both inside and outside of the department.

Nick Khadder, general counsel at Fluidigm Corp., said that it’s important to encourage other departments to view the legal department as a contributor to the business versus a cost center. “The legal operations role actually has the potential to deliver additional value through process efficiencies, technology and staffing,” he explained.

While legal operations hiring is on the rise, it’s not likely that every organization will require a dedicated professional in this role. Some even speculate that down the road, the big consulting firms will devise a way to capitalize on the demand for legal operations services. Until then, legal operations will continue to play a pivotal role in the success of many legal departments by introducing efficient new technologies, streamlined processes and better cross-functional collaboration.