What is legal operations?
Effective business executives use a strategic, data-driven approach to run their organizations. The same approach can improve the legal department, too.
Legal operations—sometimes known as “legal ops” for short—is the combination of business practices, processes, and strategies that support an in-house legal team’s ability to practice law in an efficient way that supports the rest of the business. Learning what legal operations is and how it works can give your company a strategic advantage.
Learn about legal operations.
“Legal operations” is an umbrella term that covers all of the different kinds of business processes and standards you can use to make your legal department more efficient and cost-effective. Broadly speaking, legal ops includes:
- Strategic planning
- Financial management
- Project management
- Data and technology
Corporate legal departments have often been seen as somehow separate from the rest of a business. Many have operated largely under their own rules, without the same support or oversight as other departments. Increasingly over time, business leaders have tended to expect in-house legal teams to shoulder heavy workloads with minimal budget for new hires or technology, or even guidance regarding goals and key performance indicators.
Today, however, effective business leaders recognize that in order to succeed, it’s vital to treat an in-house legal team as an essential part of the business, with well-defined objectives and appropriate levels of support. That’s what legal operations does.
Legal ops leverages project management best practices and technology to streamline workflows and processes so the legal team can be as efficient and effective as possible.
The importance of legal operations for legal leaders.
In-house legal teams are under a great deal of pressure: a 2021 study by EY Law and Harvard Law found that general counsel at various businesses anticipated a 25% increase in their workload over the next 3 years, while 88% expected budget cuts within the same time frame.
Nonetheless, there is hope. Legal teams under duress are finding answers in legal ops. Streamlining in-house legal operations allows teams to make the most of their reduced budgets by ensuring that every dollar spent is spent wisely. Legal ops assists each member of the legal team to work effectively, and the team as a whole to use all of its resources to their maximum potential.
In addition to streamlining the legal function’s work, legal operations can act as a bridge between the legal department and the rest of the business. All too often, other business departments see the legal team as the bottleneck that slows down key processes such as hiring, firing, and acquiring.
With a good legal ops team in place, conversely, communication and collaboration can improve dramatically. Not only will the legal department run more smoothly and quickly, but the legal team will also start speaking the same language as the rest of the company.
When should companies invest in legal operations?
Companies frequently seem to take for granted that any existing support for their legal department should be enough: administrators might manage invoicing and vendor relations for the legal team, while IT experts manage their technology. However, these cross-functional relationships, while necessary, are insufficient.
Many businesses leverage project management professionals and a range of other managers and workers to keep the organization running smoothly. Even within the legal world, a law firm typically has paralegals, staff or contract lawyers, and other staff to augment the work of its partner-track lawyers.
A legal ops team is a logical extension of these support structures. Just as other teams throughout the business rely on dedicated operations and management experts, or a team of lawyers in a firm leans on paralegals and other workers, the legal department benefits from the strategic support of legal operations.
The right time for any business to seriously invest in a legal operations function depends on the particular needs and resources of that business. In general, though, legal operations benefit any business that has an in-house legal team.
In short: as soon as a legal department is large enough to require any level of support, it’s also large enough for legal ops.
Moving into a legal operations role.
It takes a specific skill set to succeed in a legal operations role.
The head of legal operations should have a background in law. That may or may not include a law degree but it always entails a strong understanding of how a legal practice actually operates from day to day. The successful legal ops manager will have a practical, hands-on view of the law, with a strong interest in how it applies to business.
Legal ops leaders should be comfortable working with different kinds of people and bridging gaps between separate departments. A legal ops manager must understand and be able to communicate effectively with both the legal team and other teams, from finance, to HR, to sales.
More than anything, though, a good legal ops manager must be well versed in business intelligence and strategic thinking.
While some businesses with small legal departments might hire a legal operations manager to manage the function alone, others hire a whole legal ops team. Legal ops managers work closely with any legal operations specialists reporting to them to develop and implement strategies to drive efficiency.
Legal ops specialists today must be proficient with technology. They also need to be comfortable with numbers, as they have to track the legal team’s progress toward metrics that are tied to its business objectives. They should understand how to assess value and how to measure what is and isn’t working within a given department.
Trends regarding legal operations roles.
Most in-house legal departments lag far behind where they should be in terms of adopting new technology, according to Gartner®. Those teams face pressure to rapidly streamline and scale up their productivity and knowledge management practices.
The solution revolves in large part around identifying and adopting helpful legal tech platforms. In the near future, there will likely be a major increase in hiring for legal ops professionals who can implement a more tech-driven, data-backed approach to running a legal department.
In addition, the COVID-19 pandemic has spurred an increased interest in remote work, coupled with greater willingness among lawyers to leave inflexible employers. As a result, many businesses will likely want to retain remote work as an option going forward. Legal ops can help to select and implement technology that enables a distributed staff to work effectively, maintaining sufficient levels of communication, engagement, and productivity.
How much does a legal operations manager earn?
Legal operations is still a relatively new field, so the salaries tend to fluctuate.
In a major city such as New York, according to Salary.com, a legal operations manager can expect to earn an average of a little over $100,000. At the upper end of the scale, legal ops managers could earn over $120,000, while the lower end is closer to $90,000 annually.
Effective legal ops professionals are worth every penny that they earn. In order to merit that investment by the business, however, they have to add tangible value.
Adding value in legal operations.
Whether you’re selling to business clients, consumers, or both, your company’s focus is always on maximizing customer satisfaction, profitability, and operational efficiency while mitigating risks.
Legal ops can help business teams deliver better, faster results for customers, from smoother onboarding to improved customer service. That might entail simplifying the contracting process so you can close deals faster, getting your products and services in the hands of more customers, sooner. Alternatively, it might mean using technology to protect private data more effectively and better understand your obligations in an emergency.
Within the business, legal ops can improve virtually every process that involves your legal team. Legal ops can help your other departments get quick answers to their questions instead of leaving them waiting. It can optimize contract management so that important details—from ensuring that agreements are actually signed, to staying ahead of renewal deadlines—never slip through the cracks.
Every department that interacts with the legal team will feel the added value of a good legal ops function. Ideally, that value will ripple out to customers and business partners as well.
Key traits of legal operations leaders:
Every legal operations leader is different, but successful managers tend to share some key characteristics. According to the Corporate Legal Operations Consortium (CLOC), a member-run association for legal operations professionals, leaders in this field are collaborative, process-oriented, and data-driven.
Collaborative.
An effective legal operations manager will have excellent interpersonal skills and the ability to work extensively with legal and procurement teams. A good legal ops leader should also learn and speak the “language” of every department that the legal team collaborates with in order to foster communication across functional silos.
Process-oriented.
Excellent legal ops leaders are obsessed with efficiency. They thrive on finding out what works and what doesn’t; they will ferret out the bottlenecks in every procedure and work tirelessly to eliminate them. They don’t see themselves as just a member of the legal department. Instead, a legal operations leader has an allegiance to the whole business and their goal is to improve the company at large.
Data-driven.
Intuition can serve its purpose, but a legal ops leader should never rely on feelings alone. Digitizing the practice, and thereby its information, offers a wealth of opportunities for data analytics.
A strong legal ops manager is focused on metrics. Everything, from the contracting process to the effectiveness of a software platform, can be measured and studied.
Accordingly, in-house legal departments should be just as concerned with metrics as any other business team. A strong legal ops leader can help the general counsel by crunching the numbers on matters including:
- Contract cycle times
- Workflows
- Vendor contracts, including renewal deadlines
- Coverage ratios (contracts with standard, non-standard, or risky language)
- Number and status of customer contracts
- Outside counsel spend
- Diversity, equity, and inclusion programming
- Environmental, social, and governance factors
How to optimize contract workflows, approvals, and processes.
In most businesses, contract workflows and approvals are inordinately slow processes. They can drag on for weeks, months, or even years, potentially scuttling deals and souring business relationships.
A strong legal ops team can push teams past this status quo, which can make all the difference. Hiring more legal ops staff is not enough on its own, though. Instead, look for effective legal technology to complement, organize, and optimize their work.
How digital contracting can improve legal efficiency.
This is where a digital contract management system (CMS) enters the picture. With all of your business’s contracts and related documents accessible in one central location, it’s easy to keep track of agreements across departments and offices and to create new agreements leveraging your optimal language.
During contract negotiation, a contract lifecycle management system should offer integrated redlining and easy access to your draft history so you can maintain and review, as necessary, a record of every negotiation. A CMS can also streamline approval processes by sending automated updates to everyone involved in the negotiation. Once all parties agree to the terms, integrations with e-signature providers make it fast and simple to execute the contract.
The best contract management software creates visual representations of the key data contained within your contracts. That level of granular reporting on actionable information makes ongoing contract management a breeze, and it helps to keep everyone in the business on top of their contractual rights and obligations.
How to build a business case for new contract management software.
A contract management system will never replace the need for legal ops; instead, it acts as a natural complement to a strong legal operations team. The right software can revolutionize a business and enable success on a lean budget. However, not all technology is created equal.
There are plenty of vendors who over-promise and under-deliver. What really matters is whether a tech platform will enable your legal team to work more efficiently and effectively.
Digitization is part of the equation, but legal ops isn’t just about finding software with a better interface than your email inbox and desktop. If you upload your documents to a new platform but then still have to search and tag all of them manually, you haven’t made much progress.
Good legal tech will help you work smarter, not harder.
Leading legal tech solutions automate menial tasks, synthesize data, and use that data to produce actionable insights. That automation can reduce the amount of time your legal team spends doing rote review work and drafting boilerplate language, while improved data analytics helps you to stay ahead of your obligations and deadlines instead of constantly trying to catch up.
The business case, then, is how well a contract management system helps your in-house legal team scale up its operations. The best legal tech platforms can add the productivity of an extra employee (or more), often at a fraction of the cost.
On top of productivity with regard to individual tasks, the valuable insights from automated data analytics can offer exponential returns. For example, businesses regularly spend millions of dollars on auto-renewing vendor contracts that they didn’t mean to renew. With a system that notifies you about impending deadlines well in advance, you can eliminate those unwanted renewals—and every dollar saved is a further return on your investment in the legal technology that helped you do it.
The benefits don’t stop there. From boosting profits through shortened sales cycles to mitigating financial risks through improved regulatory compliance, good legal tech can help your legal team do more, do it better, and do it faster. You just need to choose the right partner.
How Workday can augment your legal ops team.
The Workday platform streamlines every step of the contract process, from drafting and negotiation through execution and ongoing tracking. It accomplishes this by combining market-defining AI and intuitive workflow tools with a centralized contract repository.
Workday Illuminate™—our next-generation AI—is already trained on millions of real contracts and clauses so it’s ready to go “out of the box.” Thanks to seamless integrations with leading cloud storage and document management solutions, you can quickly get your contracts into the system without having to migrate even a single file.
Once the platform ingests a document, the AI gets to work pulling and classifying the information it contains in order to provide you with valuable insights about what’s in your contracts. The platform also keeps getting better for your team over time: powerful machine learning algorithms in Workday can learn terms that are unique to your business or industry based on just a handful of examples. No matter how many years’ worth of accumulated documents you need to analyze, Workday can help you find and retroactively track any type of provision throughout your contract portfolio.
That’s contract intelligence.
Workday contract intelligence makes it quick and easy to access actionable data on-demand so your team can readily keep track of deadlines, rights and obligations, and other key terms.
With the time you save when you cut down on repetitive, menial work and the valuable information that Workday Contract Intelligence platform puts at your fingertips, you can transform your legal team into a source of strategic advantage for the business.