Five years ago, if you were looking for an example of a business practice “center of excellence,” you would likely not have turned to an in-house legal department. Would you find smart people? Absolutely. But eye-catchingly progressive systems for creating compelling visions and goals, hiring, training and retaining talent, building powerful cultures, operating efficiently and measuring performance? Not so much.
Change, however, is already underway. In a recent statement predicting the biggest trends in the legal industry in 2014, Matt Fawcett, general counsel of NetApp, identified, “The rise of operations in legal departments” as one of those trends. He noted a dramatic increase in the number of legal operations positions created by general counsel in order to “realize the benefits and efficiencies of running the department more like a business.” So what is happening and how do you jump on the bandwagon?
What is the status quo?
Law school is intense and passing the bar is difficult. The key criteria for success are the quality and quantity of output. Great work product (and lots of it) as an associate, senior associate, partner or in-house counsel is the best way to ensure upward mobility. Law firms generally focus on getting great case outcomes, and corporations focus on their core businesses. Legal for many years has “flown under the radar” of effective-business-practice scrutiny.
Why is the status quo changing?
Three “forces for change” have come together:
Pressure from the CFO/risk yielding to cost. In the aftermath of the 2008 crash, many internal legal teams suddenly felt pressure and a number of law firms went under. Legal as a “line item” was identified for attention. No longer could the “but we are the guardians of risk mitigation” argument keep the efficiency drive at bay.
Tools and resources are here. There is now a suite of relatively effective software for e-billing, matter and information management, project management, reporting and the like.
And there are world-class service businesses that have invested in people and processes so that legal departments can effectively combine internal and external build.
How do we know it is a trend?
Eric Schmidt, CEO of Google, has said, “In God we trust; for everyone else we need data.” And here’s proof: five major “CLOC” (Chief Legal Operations Committee) groups now exist nationwide—in New York, Chicago, Houston, Northern California and Southern California—with an estimated membership of over 250. Five years ago, the total number of legal operations professionals nationally was more like 10 percent of this figure. There is also now an increasing number of partnerships between law firm CIOs and legal operations teams.
What is the opportunity, and what are the challenges?
There are two very different roles that can make a big impact—one more strategic, one more operational/change management focused. In some instances, it is two hires. In others, the same person can play both roles.
Chief of staff: Responsible for the strategy of the department, goal setting; policy and process, development and tracking of KPIs (key performance indicators), communications, internal and external; organizational structure, people, department planning/mission/vision/values, and vendor management/tool selection.
Operations director: Responsible for implementation and change management across all key areas. For example, implementing an e-billing system could easily take 12 months plus. This role is “bathed in change management.”
Of course, there are always challenges. The biggest ones are getting buy-in/acceptance and getting information. But the prize is a big one. Beyond the numbers, you know you are winning when you feel the culture shifting, or as Matt Fawcett put it, when you can say “welcome to the modern world.”