Legal operations, or legal ops, is the management of the business and administrative aspects of an in-house legal department. This including outside counsel management, legal technology, budgeting, process improvement, project management, and more.
The History of Legal Operations
The activities and responsibilities that comprise legal operations management have existed for as long as in-house legal departments have existed. They started to coalesce into a discrete function called legal operations in the early 2010s.
Since then the function has exploded in popularity. Membership in the Corporate Legal Operations Consortium has swelled from 500 in 2016 to over 2,500 in 2023. As of August 2023 there are nearly 8,000 LinkedIn profiles worldwide that include “legal operations” in their title.
A large share of legal teams now have a legal ops function. Globally, 42% of the organizations with which Brightflag has spoken have at least one legal ops FTE. The percentage is higher in the United States (45%) than it is in Europe (36%) and Australia (35%). These differences reflect the origins of legal ops as well as the steady rise of the function worldwide.
Put simply, legal ops is becoming the norm rather than the exception.
Brightflag’s smallest customer, a two-person legal department, consists of a General Counsel and a Legal Operations Manager. Our largest customers have dozens of legal ops team members spanning process, analysis, and even software development roles.
What Does Legal Ops Do?
Legal ops teams are responsible for every aspect of a legal department other than actually practicing law. When a legal operations function starts, the first hire has to be a generalist. Specialization follows as the team grows. This helps each team member to have a greater impact through deeper knowledge of requirements, systems, and processes.
Legal billing usually is the first legal operations function to become its own role. Billing managers are responsible for administering legal e-billing software and working with finance to ensure accruals are collected and the financial close happens smoothly. When a legal team achieves a certain scale, typically above $20 million in annual outside counsel spend, it’s common to create a legal ops role to own all vendor management. This role is responsible for organizing a panel of providers and negotiating commercial terms, often in partnership with procurement.
Contracts are the second-largest source of work for many corporate legal teams after outside counsel management. Contract managers administer CLM and e-signature software. They also engage with business to streamline everything related to creating, negotiating, and storing contracts.
Finally, e-discovery has historically been outsourced to third party providers like law firms and Big 4 consultants. In-house teams are taking this in house to have greater control over data, achieve cost efficiencies, and manage risks. Legal hold and e-discovery managers are specialists in this area and work closely with IT, compliance, in-house litigation attorneys.
The Drivers of In-House Legal
Legal operations professionals have diverse backgrounds. Many used to be attorneys or paralegals; others were management consultants, technologists, or finance experts. This diversity of experiences is why legal operations teams are able to drive unprecedented change and disruption in legal departments. Indeed, they are the catalysts of in-house legal. What’s common across all legal operations professionals is a focus on constant improvement and transformation.
Brightflag is passionate about advancing legal operations and highlighting the diversity of the people working in it. In-House Outliers, our legal operations podcast, interviews a different legal ops professional every week, sharing the stories of those who challenge conventional wisdom for how legal teams should operate.
Legal operations is still a relatively new function and some General Counsel and HR teams struggle to benchmark compensation for legal ops roles. Brightflag conducts an annual legal ops compensation survey. The most recent, which was conducted from January to February 2023 and received more than 400 responses, is a fantastic resource for understanding fair market legal operations compensation and trends.
The Role of Legal Tech
Technology and legal operations go hand-in-hand. Buying, implementing, and managing legal tech is one of the most common responsibilities for legal ops professionals. There’s software for in-house teams to manage everything from outside counsel to contracts to documents and more.
According to CLOC, legal e-billing is the most commonly adopted legal technology, with 80% adoption as of 2021. Outside counsel typically is the largest expenditure for legal teams and therefore represents a significant opportunity for improvement. Cost savings generated using legal e-billing software can be used to fund additional legal technology projects.
Brightflag is modern e-billing and matter management software for legal teams and their finance partners to operate like a business, backed by the best customer service you’ve ever experienced. Clorox, Shopify, Volvo, and other leading companies use Brightflag to create and protect business value by effectively controlling their budget. It’s the only platform that has AI at its core powering e-billing, financial reconciliation, financial planning, and vendor benchmarking.
What’s Next For Legal Ops
Legal operations aligns with broader business changes like moving to the cloud and leveraging data for every decision and process. As such, it’s natural that legal ops is changing quickly.
The larger a legal team becomes, the more the General Counsel job is about leading a high-performing team and the more critical legal ops becomes to operate it as a partner. This is why the second hire in a legal department often is a legal operations professional rather than an attorney. A legal ops hire can make the General Counsel more efficient while putting the foundation in place for future growth.
People used to say that behind every high-performing attorney was an equally high-performing paralegal. Nowadays, the paralegal often is a legal ops professional and is just as visible as the attorney. According to our data the paralegal to legal ops journey has become the most common path to legal operations.
And of course, technology is becoming even more important for success. Software is no longer a nice-to-have; it’s a critical component of the foundation upon which value is delivered.
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