Law Firms Adopt a Legal Operations Perspective

The success of law firms in this changing environment may well rest on their ability to understand and embrace this new paradigm, by applying legal operations principles in their own practices and in their consultative contributions to corporate clients. By understanding legal operations approach, law firms can gain a better appreciation of client needs, share the client's vision and contribute to client satisfaction, while creating a competitive advantage for the firm.

The foundation of a legal operations framework as defined by CLOC includes 12 competencies representing areas of focus that every legal operations department must manage to have a disciplined, efficient, and effective legal operations function. Law firms embarking on the implementation of legal operations should look first to the following four CLOC foundational areas for opportunities to strengthen client relationships and participate in the new legal operations paradigm.

Financial Management

Effective corporate legal financial management includes budgets, spending trends, identifying potential cost savings. In a recent Altman Weil survey of legal departments, over 46% of responding in-house legal departments listed improved budget forecasting as one of the top service improvements they wanted to see from law firms. Law firms can contribute to client success by offering flexible fee arrangements, providing accurate cost estimates, invoicing in a detailed and timely manner, and offering e-billing. Analytics tools can examine matter details and billing activity to provide the client with insight on opportunities for cost reduction, and to forecast costs on active projects.

Vendor Management

Corporate legal operations teams are increasingly creating vendor management programs to insure quality outside counsel support, with a focus on quality, cost effectiveness, responsiveness and results. In particular they want firms to offer digital access to information, advice and documents. Law firms that gain the trust of clients are invited into discussions about workflow, matter management, staffing and responsibilities. With this level of trust and participation, law firms have an opportunity to better understand the client's business goals and expectations. Firms can then leverage that knowledge to propose enhanced project management and workflow tools, and to report performance to corporate legal KPIs in a digital dashboard.

Cross-Functional Alignment

The in-house legal function has historically been seen as a cost center and a separate silo, not well connected to the core business. A foundational effort is underway in legal operations, aiming to align legal with other key company functions, such as HR, Finance, product management and marketing. Doing so encourages awareness across the organization of potential risk, compliance, or other legal issues. An outside law firm can add value to the mission by providing a client-facing application providing details on case progress and budget, reducing effort on the part of the legal operations team to keep the executive team and colleagues informed.

Technology and Processes

Providing legal services in-house is increasingly a technology based effort, so client legal teams need to align with IT resources, both internal and external, to create and implement software and processes that enable the legal department to execute on its plans.

Outside law firms who embrace legal operations principles can contribute to clients' successful internal technology implementation. Working with the corporate client, they help create a long-term technology roadmap to support the client's goals. Investments in e-billing, matter management, contract management, enterprise content management, IP management, legal hold, and other core legal processes help law firms provide a higher level of service and better real-time information to manage their business.

In some cases a firm may participate in defining requirements for technology projects, and helping to select products or service providers. Some large law firms are investing significant resources in technology, setting up subsidiaries and joint ventures specifically focused on creating variety of technology-based legal products and services. In 2019, Wilson Sonsini Goodrich & Rosati launched SixFifty, a wholly owned software subsidiary created to develop automated legal process tools. Law firm Orrick Herrington & Sutcliffe has invested in Reynen Court, a new platform for law firms and corporate legal departments looking to select and use new legal tech tools.

Conclusion

The practice of law is first and foremost an information business, and technology is helping to transform legal operations, both in corporations and the law firms they rely on. The first few years of the legal operations movement in the industry have shown us that most corporate clients want to increase collaboration with their law firms. A shared commitment to communication, collaboration and legal operations methodology can help that happen. Law firms have a significant opportunity to foster closer partnerships with clients, increase their value contribution, and enjoy enduring relationships by adopting legal operations approach in their practice.

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Megan Miller, CEDS, is a senior consultant with Edge Legal Marketing, assisting clients in development and execution of strategic marketing plans and implementation of marketing technologies. A global technology hound, Miller has built brands, trained teams and introduced successful products for global companies and startups. She can be reached at [email protected].