What Is Legal Operations?
Legal operations, or legal ops, is the management of the business and administrative aspects of an in-house legal department.
Essentially, legal ops handles everything but the actual practice of law. This includes outside counsel management, legal technology, budgeting, process improvement, project management, and more.
Legal operations is an integral part of any strong company, helping all departments run efficiently and in line with regulations.
Skilled legal operations professionals have emerged as a critical part of any team that wants to drive efficiency, cut costs, and make data-driven decisions.
The History of Legal Operations
The initiatives and core competencies that comprise legal operations management have existed for as long as in-house legal departments have existed. They started to merge into a discrete function called legal operations in the early 2010s.
Since then, the function has exploded in popularity. Corporate Legal Operations Consortium (CLOC) membership has swelled from 500 in 2016 to more than 2,500 in 2023. As of October 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 employ 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 within the larger corporate ecosystem.
Put simply, legal ops is becoming the norm rather than the exception.
The Goals of a Successful Legal Ops Team
Legal ops team members are the stagehands in the background, keeping the legal department’s show running smoothly. Their goal is to make things work better, faster, and often cheaper.
Empower In-house Attorneys
Fundamentally, the legal ops team takes tasks off the hands of in-house lawyers so they can stay laser-focused on their primary role: practicing law.
The legal professionals don’t need to be burdened with tasks outside their realm of expertise, like administration, finance, or vendor management. Instead, they can direct their energy and skills toward high-importance legal work, maximizing the legal department’s value proposition.
Through specialized expertise, standardized project management processes, and technology, a legal ops team achieves economies of scale that save time and, therefore, cost when handling matters.
Leverage Vendors Effectively
The legal landscape is vast, and not every vendor or service delivery model will align perfectly with a company’s needs. It’s the responsibility of the legal ops team to assess service providers, identifying their strengths and weaknesses.
Through a rigorous cost-benefit analysis, legal ops decides which vendors offer optimal efficiency and value for their pricing. They establish clear KPIs and metrics for those vendors to ensure continuous improvement and alignment. This drives performance and keeps vendors accountable.
Optimize Legal Spend
Legal ops teams work closely with finance and accounting departments to get a clear picture of historical spending. With this data, they can set informed budgets and track expenditures against these benchmarks.
A keen understanding of how the budget is spread across practice areas, specific matters, firms, or even individual timekeepers helps refine spending strategies across the contract lifecycle.
This granularity allows for decisions like determining the right mix of in-house versus outside counsel or the ideal blend of partner-to-associate time allocation. It also gives legal ops teams the information they need to negotiate favorable fee agreements.
Implement Efficiencies Companywide
At peak performance, legal ops acts like a company’s nerve center. The team’s ability to make lasting changes to business processes helps every division perform more effectively.
For example, legal ops should work with finance to define the best ways to report on legal spend, budgeting, and cost saving initiatives, so that finance always has the data they need, when they need it.
Legal ops can also work with other departments like HR, sales, marketing, and product to optimize the process of requesting legal assistance, so when these departments need advice from law firms there are clear and efficient ways to request it.
The Key Roles Every Legal Ops Team Needs
Legal ops teams don’t practice law; they leave that to the lawyers. So, when staffing your next legal operations role, think MBA before JD. You need people who can shift the perception of corporate legal from cost center to business driver.
Legal operations professionals have diverse backgrounds. Many used to be attorneys or paralegals; others were management consultants, technologists, or financial management experts. This diversity of experiences is why legal operations teams can 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.
Legal operations is an important business function for companies large and small, but the resources your organization can allocate toward the department vary widely.
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 software development roles.
Since the scope varies widely depending on where you are along your legal ops implementation process, it’s helpful to think in terms of roles rather than titles. If we were building a legal ops team from scratch today, here’s how we’d do it.
When a legal operations function starts, the first hire has to be a generalist. Specialization follows as the team grows.
The generalist sets the foundation, understanding the broader requirements, systems, and processes, and helps pave the way for future specialists. Once the specialists are brought on, they can focus on specific parts of the operations, while the generalist ensures nothing falls through the cracks.
Legal billing usually is the first legal operations function to become its own role. Billing managers handle the technical side, managing the e-billing software and collaborating with the finance department.
Their aim? To ensure that financial operations, like collecting accruals and ensuring the books are closed without any hiccups, are seamless. They’re the bridge between legal services and financial accountability.
As legal teams (and expenses) grow, it’s crucial to have someone keeping a sharp eye on how the money’s being spent. That’s where the vendor management role shines
This role is not just looking at costs but also quality and efficiency. Vendor managers ensure the company gets the best service for its buck. They handpick a panel of providers and don’t shy away from hard negotiations to get favorable terms. And they don’t do it alone—they often collaborate with procurement teams to ensure the company’s interests are front and center.
Contracts are the lifeblood of business deals and the second-largest source of work for many corporate legal teams after outside counsel management. But, they can be complex and a source of headaches if not managed well.
Contract managers simplify this. They use software to track contracts and ensure electronic signatures are captured seamlessly. More than that, they’re the diplomats of the legal team, liaising with the business side of things. They help smooth the contract creation and negotiation process, ensuring everything is stored properly and easily accessible.
Specialists in this area, the e-discovery managers, collaborate closely with IT teams, compliance units, and in-house litigation experts. Their role ensures the company is always ready, with evidence at hand, for any legal challenges that come its way.
This work has traditionally been outsourced to third-party providers like law firms and the Big 4 consultants. However, more in-house teams are seeing the benefit of handling this role internally. They want better control over their data, more cost-effective processes, and a hands-on approach to risk management.
How Legal Tech Supercharges Your Practice Operations
Technology and legal operations go hand-in-hand. That’s why establishing a technology roadmap 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.
Ever feel like you’re stuck in a loop with mundane and repetitive tasks that eat into your day?
Legal tech brings the magic of automation to the rescue. By automating necessary but routine processes, you not only save valuable time but also ensure greater accuracy.
Instead of slogging through these tasks, legal teams can rely on technology to handle them, allowing professionals to concentrate on more nuanced, strategy-oriented aspects of their work.
Imagine a world where time-consuming invoice reviews, budget tracking, and vendor assessments are taken care of with a click or even automatically. That’s the power of automation in legal tech.
Consistency is more than just a buzzword in the legal world; it’s the backbone of predictability.
With standardized processes in place, legal ops teams reduce variations, errors, and inefficiencies. Legal tech tools enable the creation of templates, workflows, and protocols that ensure every task follows the same rigorous, optimized process, no matter who handles it.
This not only streamlines operations but also ensures that outcomes are predictable, reducing surprises. A standardized process also makes it easier to manage expectations both within the legal team and with external stakeholders.
Harnesses Business Intelligence
Intuition alone doesn’t cut it. Business decisions need to be backed by hard data.
Legal technology offers sophisticated tools that gather, analyze, and present data in ways that make it actionable. With advanced analytics, legal ops professionals glean insights about everything from contract cycle times to litigation success rates.
This intelligence isn’t just about looking back but also forecasting forward, allowing teams to anticipate challenges and seize opportunities.
Data analytics, powered by legal tech, provides the clarity and confidence to make informed decisions that align with broader business goals.
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’s 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 laying the foundation for future growth.
People used to say 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.
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 also the only platform with A.I. at its core, powering e-billing, financial reconciliation, financial planning, and vendor benchmarking. To learn more about how Brightflag can empower your legal operations, book a demo today.