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Legal Operations: The Experts Agree It’s Growing

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2018-07-06T12:13:03+00:00 July 5, 2018|

Legal Operations: The Experts Agree It’s Growing

When it comes to demands on corporate legal departments, they’re increasingly turning to Legal Operations and technology solutions as ways of meeting the challenges and stresses they’re facing. according to experts keeping a close watch on the legal industry.

As we’ve pointed out, there are rising pressures driving corporate legal departments to adopt new approaches to delivering legal services. Building up Legal Operations capabilities and adopting technologies like legal workflow automation (surprise!) are among them. For its part, LWFA delivers a big list of benefits. Among those? How it’ll help enrich the human factors involved in the practice of law.

Legal Ops is steadily gaining ground inside U.S. and global legal departments, if we’re to judge by the growth of CLOC and the results of recent research. The presence at this year’s CLOC Institute conference of major presenters from Cisco, Google, WalMart, Gap Inc., and Spotify is a bellwether of that growth and change in corporate mindsets.

As a column by Mark A. Cohen in Forbes pointed out not long ago, the legal industry is no longer simply a profession. It’s now global big business, with a greater eye on profitability and efficiency.

“Consumers are demanding ‘faster, better, cheaper’ delivery. Their risk-aversion to new delivery models has yielded to an embrace of innovation and a growing recognition that procuring legal services is not unique as lawyers have long maintained.”

CLOC’s own First Annual State of the Industry Survey, which researched organizations from 30 states in over 30 industries, as well as Fortune 500 companies, laid out some of the reasons why adding legal operations business practices is increasingly vital for companies. Looming large among them is the considerable amount of money they’re spending on external legal resources:

  • $60M was the average external legal spend.
  • $221K average internal spend per legal department.
  • $607K average external legal spend per in-house attorney.
  • 62¢ of every $1 spent on legal costs goes to external legal costs.

So it’s no wonder legal departments are turning to legal operations and technology solutions like workflow automation, analytics and e-billing to extract maximum value from legal processes, both internally and externally.

Turning toward a new slate of solutions

Longtime Legal Ops leaders like Sowmyan “Sam” Ranganathan, chair of the Association of Corporate Counsel’s Legal Operations group, are noting how Legal Ops has grown in scope within organizations to address new tasks, like e-discovery and information governance, in tandem with the “explosion” in data and unstructured information within enterprises and legal departments.

Global legal operations growth

“We’re starting to see a lot of legal COO roles in the industry, which shows that business legal is more of a strategic role. I’ve seen a few surveys which say we’ve actually gone from a few legal operations functions within the Fortune 100, Fortune 200 companies, to I think, half of the companies, even in the mid-market, now have legal operations. I think the pressure on a GC has really driven them to focus on operations and to run the department as efficiently as possible.”

Running their legal business like a business

The 8thAnnual Law Department Operations Survey by the Blickstein Group showed how more legal departments are applying solid business practices to their operations. It surveyed 107 respondents and found they were devoting more attention to costs and billing than ever: 56.2% had formalized metrics or reporting programs. Among the metrics they were tracking?

  • 80.8% track “total expenses by law firm for particular groups of matters.”
  • 58.9% were now tracking legal spend as a percentage of revenue and by total expense.
  • 45.2% tracked the average or median bill rate by law firm.

The top three challenges respondents saw as facing Legal Ops?

  • Driving and implementing actual change.
  • Identifying opportunities for business improvement and cost savings.
  • Obtaining funding and/or resources for staffing, technology, and other needs.

Our take? Legal Operations demands legal workflow automation

As more legal departments become focused on cost control, technology is seen as a remedy. Optimizing Legal Operations and transforming a legal department into a center of excellence, agility, and efficiency for an organization? Legal workflow automation (LWFA) is what we’d call an essential technology if these growing Legal Ops teams are serious about their mission: Enabling the legal department to deliver more services, but doing so more cost-effectively.

When pressures are high, and even if budgets are lean or even in decline, a best-in-class SaaS LWFA solution becomes even more imperative and attractive. Thanks to the powerful cost savings and productivity gains it delivers, and its outstanding ROI and T2V, it’s an investment that pays immediate dividends.

And as a final kicker? LWFA can be considerably less expensive than other technology investments – while making more of a proven, lasting impact on Legal Ops success.

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Justin Hectus
CIO / CISO at Keesal, Young & Logan