Advanced Legal Operations Strategy Delivers Law Department Value

In corporate law departments, legal operations strategy requires advanced preparation, attention and critical thinking to showcase value to the enterprise. In fact, when legal operations professionals are in sync with legal operations strategy, the law department can play a pivotal role in leading as a cost center.

While the term “cost center” may have a negative connotation to some, especially those in finance, learning how to adjust as a cost center is part of legal operations strategy. Becoming the strategic business partner for the company does require a level of maturity and advanced decision-making strategy.

Looking under the covers beyond “cost center” takes us into budget management and risk management. The critical nature of the legal department is much like the enforcer for the company – the frontline beef that protects the company’s intellectual property and business stakeholders, for example. This frontline position impacts a company’s bottom line, and it does not happen without legal operations strategy and robust decision-making power.

Transform Legal Operations Strategy

Law departments must adopt a holistic and forward-thinking approach to transform legal operations from a traditional support function to a value-driving powerhouse. Here are some steps to consider when reframing legal operations strategy that contributes to law department success.

Maturity Assessment

Legal departments function with clear objectives – to maintain budget, be a valuable partner and deliver legal services to protect the company and mitigate risk. The way to empower maturity and decision-making is via a maturity model that helps deliver a framework for improved decision-making.

Conducting a health assessment and maturity audit are two methods to drive maturity and improve legal operations strategy.

Use of data lends itself to strategic decision-making maturity. Below, you’ll see more on the effects of data to drive actionable insights in the legal department.

Technology and Digital Transformation

Modern legal departments must embrace technological solutions that streamline workflows and enhance efficiency. This includes:

• Implementing enterprise legal management software for matter management, matter tracking, document management, work intake, and workflow automation, to name a few.
• Utilizing AI-powered contract lifecycle management software that integrates with the enterprise legal management solution. This enables the legal team to link contracts with matters to enhance productivity, collaboration and overall department efficiency.
• Enabling law firms to access the enterprise legal management software to improve communication with the in-house legal team, update matter tasks and case management, maintain open lines of matter communication with all outside counsel vendors, and more.
• Developing robust data analytics capabilities to provide insights into legal spending, risk management, and department performance. Part of legal operations strategy should include developing and presenting analytical reporting (from dashboards and metrics) that informs company and department leadership about success metrics. Putting a robust enterprise legal management solution in place helps provide these tools to augment legal operations strategy.

Strategic Vendor Relationships and Planning

The entire legal department contributes to the health of the enterprise. A high-performing legal team requires a nuanced approach to talent management:

• The “trick” is to develop the right mix of in-house capabilities and strategic outside counsel partnerships. Those relationships that have “always been there,” could be analyzed as part of legal operations strategy, and by communicating with legal leadership to ascertain whether these relationships can be tweaked.
• Invest in an enterprise legal management solution that includes vendor management. This tool enables legal operations strategy that benefits the entire law department. Because of the nature of outside counsel relationships, the legal department must be prepared to adjust, change and improve upon these relationships regardless of how long ago they were established and by whom.
• Regardless of the environment, having a diverse legal team with complementary skills to represent the enterprise is smart strategy. The enterprise legal management software with vendor management features provides that ability. Outside counsel diversity can be understood so that the best representation is available to partner with in-house counsel.

Performance Measurement and Metrics

Quantifying and communicating legal department value is a critical component of legal operations strategy. Here are some ways to ensure value:

• Establish key performance indicators that align with broader business objectives
• Track metrics like cost savings, risk mitigation, contract cycle times, and matter resolution efficiency
• Create regular reporting mechanisms to demonstrate the department's strategic contributions
• Develop benchmarking processes to compare performance against industry standards
• Conduct a health audit to ensure the department is poised to meet objectives and be successful for the long term
• Use vendor management tools to measure vendor performance and to also select the best metrics to evaluate outside counsel

The Critical Role of Legal Operations Professionals

Legal operations professionals are the architects of departmental transformation. They serve as strategic enablers who bridge the gap between traditional legal practice and modern business needs. Their responsibilities encompass:

Legal Operations Strategy: Designing and implementing efficient workflows, technology integrations, and process improvements. At times, workflows are disjointed and create more dysfunction than streamlined productivity. Legal operations professionals need to analyze workflows and improve processes to create a well-oiled machine among the legal team, legal operations team and other business units throughout the company. The goals are to reduce complexity and increase efficiency throughout every process.

Financial Management: Budgeting, cost control, vendor management, and strategic resource allocation. The software mentioned throughout this article, enterprise legal management, incorporates in-depth features that enable smart financial management with automated tools powered by AI.

Technology Integration: Selecting, implementing, and managing legal tech solutions. By choosing the right enterprise legal management technology, processes can be automated. This includes financial management, as listed above. Much of the work centered around technology is evaluating the features offered and how they benefit the legal department. Essentially, technology should seamlessly integrate and communicate across departments. A mature legal department utilizes technology to modernize the digital experience.

Risk Management, Cost Management and Cross-Functional Collaboration: While the role of the legal operations professional is ever-expanding, other secondary yet equally important aspects of legal operations strategy include managing risk, costs and cross-functional collaboration. All legal departments must comply with regulatory and that requires proactive risk mitigation strategies to be implemented. To inform business stakeholders and organizational leadership, the operations professional must collaborate across the company and serve as legal department liaison. Critically, managing budgets and implementing cost-savings strategy are part of the every-day fabric of legal operations. These rarely get called out because they are commonly managed, discussed and improved on a daily basis.

Data-Driven Decision Making: Not only does data help drive decisions and legal operations strategy, it modernizes the department and helps make it more mature. A legal department without data makes ad hoc decisions that can negatively influence operations, productivity and collaboration. Data that are utilized daily delivers confidence in decision-making for the legal operations manager and the general counsel, in addition to other leaders.

Within a robust enterprise legal management platform, there are dashboards within the vendor management tool, for example, that provide actionable insights about the outside counsel delivering legal services. Moreover, the financial management tool can deliver actionable insights with data around budgets, financial performance and billings.
The data can be packaged and presented in a robust report with visual graphics and a snapshot of performance across the legal department. Again, the right enterprise legal management software provides these analytics capabilities.

Above, we mentioned maturity modeling to drive strategic decision-making. The core of maturity is use of data and resulting analytics to measure results and outcomes of processes and programs. The way to tell the legal department story and showcase value is to incorporate data-driven insights into strategic decisions and demonstrate legal department value

Successful legal operations strategy contributes to even more successful legal department functionality. The modern legal department embraces legal operations strategy, technological innovation, and a proactive approach to delivering value. By investing in legal operations capabilities, organizations can transform their legal departments from reactive cost centers to strategic business partners. Reach us to learn how an enterprise legal management solution helps drive legal operations and law department success.