Setting up a legal operations function

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In ACC’s 2020 Chief Legal Officer Survey we asked an open-ended question about the most vital strategic initiative underway in the legal department. Twenty-nine percent of those responses concerned digitalization and use of technology, the largest category identified.
ACC data also shows that legal departments that employ at least one legal operations professional use more technology: 5.8 different technologies, compared to 3.0 in departments with no legal operations professionals. Put simply, legal operations professionals make a difference. Departments with no legal operations professionals are, on average, at an early maturity stage, while departments with dedicated legal operations staff are at an intermediate stage.

What is Legal Operations?
We know that implementing a legal operations function is effective, but what is it exactly? “Legal operations” refers to activities focused on optimizing legal services for an organization. Legal operations disciplines are rooted in business fundamentals, leveraging processes, data, and technology. They are designed to build consistency and drive efficiency and value in a legal department’s practice of law.
In terms of implementation, many general counsel in Europe and globally, delegate responsibility for legal operations to a deputy GC. Others, however, have established dedicated legal operations professionals within the law department. These positions, which may or may not be led by a lawyer, optimize processes, technology, and human capital to informed decision-making and performance management. Responsibilities include identifying best practices, overseeing and enhancing the daily work of knowledge management, financial planning, strategic planning, outside counsel management, analytics, and other functions.
Where should Legal Operations professionals start? An example from MANN + HUMMEL
Lawyer Leonard Stuermer joined MANN+HUMMEL as legal process manager in October 2019, entering uncharted territory: a new role, new company, and a new industry.
MANN+HUMMEL is a family-owned company, and a global market leader in the area of filtration. Headquartered in Ludwigsburg, Germany, the company develops solutions for automobiles, industrial applications, the sustainable use of water, and clean air in interior spaces. In 2020 the company expanded its portfolio of solutions for virus-free indoor air purification in buildings.
MANN+HUMMEL currently has 20,000 employees at more than 80 locations, including 15 legal counsel and paralegals in EMEA, APAC and the Americas.
With few best practices available in a newly created role at a new employer, Stuermer had to develop his own role description and a suitable approach to the challenges ahead.
The role itself was — and still is— constantly evolving, so the ability to adapt to a changing environment was key. Stuermer summarized the lessons learned with the acronym T.E.C.H.: Talk, Execute, Challenge, and Harness. This approach proved a valuable framework to help adapt to the constant challenges that arose.

Talk
During the first month, it was essential to understand the legal department’s expectations and where the essential pain points lay. The pain points can vary from process inefficiencies to technical challenges to a legal tech wish list.
By conducting individual interviews with legal department colleagues, Stuermer got to know them better and uncovered the daily non-legal struggles they face. A standardized set of questions showed common pain points and patterns, and uncovered which improvement steps were high priorities.
This open forum of communication helped his colleagues understand how the legal operations role will impact them. Obviously, the communication does not end with a single interview, but should be conducted on a regular basis as projects develop.

Execute
Any new role needs to prove itself to its stakeholders. Swift execution is critical. Senior management expects results, and other stakeholders – especially legal department colleagues – have to see the added value brought by legal operations. As you cannot improve everything at once, any added value must be a mix of short-term and long-term achievements.
To gain his colleagues’ trust in the first six months, Stuermer opted for implementing short-term goals first. These tended to be low hanging fruits, but based on the results of the conducted interviews, promised to have a larger impact. For example, introducing dashboards to the legal expense management helped display the added value.
Small, yet noticeable quick wins helped establish good working relationships with other departments, such as finance and IT.

Challenge
Being a novice to the legal operations role and the company provided an opportunity to challenge the status quo. Not every existing process is necessarily good or, from an operational standpoint, efficient. A deeper analysis of existing processes can uncover inefficiencies and allow quick remedies.
Confronted with the recurring call for new legal tech, it is important to remember that improved processes do not necessarily need a new tech tool. Sometimes a comprehensive analysis of weaknesses and pain points is enough.

Harness
Novel as the legal operations role is in many companies, it does not mean that ideas must be reinvented. By harnessing existing know-how and previous work, shortcuts sometimes become visible.
For example, by knowing which tools are already used within your company, you can tackle an existing pain point by introducing these tools to the legal department. Consequently, simply extending the user group to the legal department is much easier than requesting an entire IT implementation.

Also, some approaches from other operations roles (e.g. HR, general management, or management consulting) can be adapted for legal operations. For example, change management techniques are useful when introducing a legal tech tool.
Overall, the T.E.C.H. approach helped Stuermer give structure to the first six months in legal operations. Even today, its focus on pain points allows for the constant evaluation of whether the initiatives had a positive impact on the legal department.

Embarking on your own Legal Operations journey?
The Association of Corporate Counsel (ACC) partnered with Consilio in 2019 on a bi-monthly series of virtual roundtables that focus on how different legal operations functions are managed in companies in Europe, the Middle East and Africa, drawing on the ACC Legal Operations Maturity Model framework.
Here are ten tips to jumpstart your first 100 days:

  1. Law department leaders face a daunting challenge. Find out how you can mitigate the organization’s risk, contain costs, and create value. Sample Risk Assessment Template
  2. When legal operations teams are small, their maturity is closely tied to the person in the role. The right appointment can massively impact advancement. Law Department Operations Annual Report; Decoding a Decade of Data to Map the LDO Journey
  3. New GCs and legal operations leaders often face very short ramp-up periods, potentially reduced resources, and high stakes and expectations. It is essential to assess the strengths, weaknesses, and expectations in four major areas: team, clients, resources, and processes. 90 Day Plan for New General Counsel
  4. Establishing key performance indicators (KPIs) will enable you to drive toward strategic goals and ensure that outside counsel achieve the results you are seeking (e.g. time to resolution, outcomes, predictability). Consilio Workload Assessments & KPIs
  5. Any organization can only withstand so much change at once, so it is important to find the right cadence. It is better to do a few things right than too much at one time. ACC Legal Operations Maturity Model – Change Management & Communications and Readiness Assessment Tool
  6. Start by identifying short-term and long-term focus areas. Workload allocation, developing a technology roadmap, and establishing KPIs and metrics are sensible places to start. ACC Legal Operations Maturity Model – Metrics & Analytics
  7. Create a strategic plan. Use the ACC Legal Operations Maturity Model, especially the Strategic Planning section, to assess your maturity and utilize its resources. ACC Legal Operations Maturity Model – Strategic Planning & Legal Operations Leadership and Sample Plan Template
  8. As you roll out your plans and initiatives, give people the opportunity to ask questions and acknowledge concerns. ACC Legal Operations Maturity Model – Change Management & Communications and Cultural Change Management
  9. Use data to your advantage. Data will help justify how time is spent and demonstrate the value of the legal department. Demonstrating Value: Basic Metrics for Every Law Department
  10. To maximize impact, the legal operations leader should be an executive who is part of the leadership team and have the GC’s conspicuous backing. About Corporate Legal Operations

What’s next?
ACC Legal Operations recently published the Maturity Model for the Operations of a Legal Department 2.0 to help in-house counsel and business professionals self-assess and identify concrete steps to enhance legal operations in any of 14 functional areas in the legal department.
A popular reference tool, the Maturity Model attributes allow legal departments to place themselves in three stages of maturity in each function — early, intermediate, and advanced — bearing in mind that priorities and aspirational targets will vary based on department size, staffing, and budgets.
The newly released “version 2.0” of the widely used ACC Legal Operations Maturity Model reflects advancement in maturity in legal departments across the globe — all stages are more advanced than when we published the original model in 2017. Like the original, this version was “crowdsourced:” we gathered input from members of the ACC Legal Operations Interest Groups (see here) as well as from leading practitioners in specific operational functions. Well over 100 company representatives participated in the project.
Many members have told us that they used the original ACC Legal Operations Maturity Model for internal assessments, and to gain alignment within the GC’s leadership team about priorities and the sequence of projects, the roadmap to operational improvement. It is helpful to have a clear picture of what “Advanced” looks like (i.e. what you’re “driving toward”).

We partnered with leading legal service providers to produce the foundational toolkits to assist legal teams in advancing in each of the 14 functions, including Innovation Management, Internal Resources Management, External Resources Management, Financial Management, Knowledge Management, Metrics & Analytics, Project & Process, Management, and Technology Management.

Editor`s note: ACC members can download the tools and on-demand webcasts.

teegler@acc.com

g.marletta@acc.com

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