Improving operational performance and maximizing efficiency of spend
By Catherine J Moynihan and Robin Snasdell
Legal operations is a growing trend in international law departments. As a function, it optimises how a legal team deploys people, processes, technology, and data to improve the efficiency and cost-effectiveness of the legal service delivery model.
In 2019, the Association of Corporate Counsel (ACC) partnered with Consilio to raise awareness and competency in legal operations across Europe, the Middle East, and Africa (EMEA). That collaboration formed ACC Legal Operations EMEA, a project to support in-house legal teams as they work to enhance their law department management. ACC Legal Operations EMEA holds bi-monthly virtual roundtables to discuss different aspects of the legal operations function, with over 500 attendees from legal departments across EMEA. A meeting last October in Frankfurt saw over 50 legal operations leaders attend from 14 countries.
Some of the insights drawn from these online and in-person discussions are presented below.
Legal Operations – what is it?
Corporate law departments in EMEA, as elsewhere globally, are implementing legal operations functions. Legal operations functions vary in focus but broadly have remits to improve operational performance and maximize efficiency of spend. As cost pressures and the complexity of legal services mount, and technological options abound, many general counsels (GCs) are now delegating responsibility for legal operations to a deputy GC; others are establishing a dedicated legal operations team, which may or may not be led by a lawyer. In one polled session, 55 percent of respondents reported that their legal operations team consisted of one to five members. A further 31.3 percent reported six to 20 members, and 13.5 percent identified 21 or more.
From the virtual roundtables, we know that many corporate legal teams are less sophisticated in their use of legal technologies than their colleagues in the US. They frequently lack any specific legal technological solutions and have limited, or no, specific budget for IT. Counsel facing these challenges appreciate support in understanding how others have made a business case for technological solutions, and share tactics to bring their team around to successful adoption.
Change Management – a core competency
One virtual roundtable focused on change management, with participants from companies of various industries, sizes, and levels of maturity. Sixty-eight percent of participant poll respondents identified their legal teams as being in the early stages of change management maturity.
We heard about difficulties in implementing new ways of working within the legal teams, which can be partially attributed to the fact that very few (12 percent) of those responding to questions during the roundtable had someone dedicated to change management in their legal team. However, 40 percent reported having a team member in this role on a part-time basis.
The advisory board of ACC Legal Operations EMEA – which includes representatives from Adidas, ASML, Banco Santander, Barclays, BT, Capgemini, Continental, Heraeus, Idemia, Lindt, Novartis, Orange, PVH Europe, Total, and UBS – has discussed ways to address challenges with technology user adoption. We believe the lack of change management maturity might go some way towards explaining this. Our speakers addressed the ‘change transition curve’, and encouraged legal department leaders to use the ACC Legal Operations Maturity Model Toolkit (https://www2.acc.com/maturity/) to benchmark and advance in any given area.
Digital Transformation – tailoring is important
Digital transformation — automation, cloud computing, and extensive gathering and application of data — has different implications for every organisation. It is crucial for legal teams to understand how digital transformation adds value, and how to quantify that value specific to their own departments and needs. One ACC Legal Operations EMEA virtual roundtable elaborated how technologies and digital transformation can drive efficiency. However, implementation is challenging, and support is often required from external consultants: 63 percent of poll respondents said their legal team was not ready for digital transformation, and 33 percent said digital transformation had only made them ‘somewhat’ more efficient.
Outside Counsel Management – data & dialogue are vital
Roundtable speakers and participants highlighted the importance of increasing communications with law firms, and of using data to gain insights and make better strategic decisions about legal matters. They identified structured, continuous dialogue (e.g. quarterly business reviews) between law firms and clients as a significant aid to successful management and cost efficiency. This is consistent with the “End Of The Duopoly Report” from the Blickstein Group and Consilio, in which 79 percent of respondents rated a direct relationship with law firms as effective in controlling external spend.
Leveraging the Legal Ops Function – focus leads to impacts
It is clear from the knowledge-sharing throughout 2019 that legal departments with dedicated legal ops staff, led by an executive who has a seat at the GC’s leadership table, are advancing rapidly in maturity – and more importantly, optimizing legal services for the corporation. By ensuring that work is performed by the right resources, both internally and externally, applying data to inform decision-making and management performance, and changing management techniques to nurture adoption of new processes and systems, legal operations professionals across EMEA are helping their legal departments shine as valued business partners.