As the pressure on legal departments continues to rise—to develop teams that deliver results—another role has been evolving and expanding for more than a decade: Legal Operations.
What role do they play? Why do you need them? And how do you build a mature legal ops function? Best-in-class organizations are leveraging two things to shift Legal from a cost-center to one of profit and a high-performing strategic business function—people and technology. (If you prefer to watch a video, view the recorded webinar here.)
Let’s take a step back and set the stage.
It’s no secret the business landscape today is fast, increasing in both pace and breadth. The “global map” is constantly being refolded and shrunk by new innovations like Elon Musk’s Hyperloop and One Belt One Road initiative, restructuring processes, creating new opportunities, and overall reshaping the business landscape.
With the increasing pace also comes volatility—political uncertainty, regulations and policies have changed in recent months and continue to be in flux, the way revenue is recognized was recently changed, a new tax reform has been released. Overnight Facebook took a multi-billion dollar hit last week.
Ultimately a new way of doing business—it’s connected, both across the organization and across globe.
New technology is emerging across departments—Procurement, Finance, HR—each team has technology that enables them to move fast and process information at a digital pace. Think of a classic car (I have personal experience with this, my first car being a 61 Ford Falcon). The more you replace old parts with new the harder the older parts have to work to keep up. If every other department has digitized and streamlined their processes, Legal has to work harder to keep up with other departments and their expectations.
There have been advancements within the contract management space (e-signature, document management, etc.), growing in both form and function over the last few years. However often these advancements result in tying multiple, disparate systems to manage one task—contracts—which don’t necessarily make it “easier” to keep up, losing both visibility and efficiency.
Add to that the task of keeping up with growing teams, and again the overall pace of business which requires faster contracting processes (and speed and compliance aren’t necessarily friends), and it’s a lot to take. In the struggle to keep up there are two critical levers for Legal teams: people and technology. First, people.
As the role of Legal has evolved, another role has been evolving and expanding for more than a decade. If there are two “paths” to choose from, one being stay the course and fall behind, and two adapt and adjust, Legal Ops is the answer to path two.
What does Legal Ops Deliver?
1. Improved efficiency and efficacy
- Legal ops can optimize processes creating scalable, repeatable success. In light of a constantly changing business environment. Legal ops can help implement and manage new technology, like a contract management platform, to automate processes and compliance, improve your legal department’s productivity.
2. Simplified change management
- Companies across the board report that one of the greatest challenges they face is keeping up with the constantly changing and increasingly complex landscape of corporate regulation. In the midst of all this the legal function has taken on increased organizational importance.
- A well-trained legal ops team can help navigate the intricacies and keep companies free from the risks and penalties of noncompliance.
- Through these efforts—later—ability to impact an organization’s bottom line, as well as governance practices—like enforcing roles and permissions where data is concerned—to ensure company compliance, ultimately increasing efficiency and profitability.
3. Proving the Value of Legal
- Legal ops are how legal teams communicate value the to the organization and the C-suite. They do this by leveraging the data in contracts to deliver actionable insights that improve processes and performance. But they also know how to turn the words in your contracts into trackable metrics, called metadata.
Legal Ops and Tech—Why pair the two?
1. Faster time-to-value
- Increasing demands means digitizing, which means more technology. Legal operations are specifically equipped to streamline processes and manage change, including finding and implementing technology — faster implementation, higher adoption especially if using an intuitive platform, means realizing greater value faster.
2. Increased savings
- With greater efficiency comes greater savings, a better ability to allocate resources accordingly, time saved, ultimately what will push Legal from cost-center to profit-center.
3. Process automation and optimization
- Automated and repeatable processes can scale as needed. Managing those changing expectations and increased demands is then easier—change management overall is easier and Legal becomes more effective. It’s the automate, rinse, and repeat method, doubling down on what works with insights from reporting and analytics.
3 Key Areas Of Focus
- Communication, Relationships, Collaboration.
- Increasing communication both internally and across teams builds relationships, increases collaboration, and puts Legal in a position to better serve internal clients. As a bonus this also changes the perception of Legal internally to one of partner.
- To achieve this level of communication and collaboration hold meetings and have conversations with other teams to identify problem areas and come up with solutions that support everyone.
- Create cross-functional alignment by mapping processes throughout the organization, creating clear paths for collaboration.
- Structure your teams to support strategy – what positions are key?
- Promote problem solvers and look for people that think outside the box; Pick top-performers and get them involved.
- Identify your key stakeholders, your biggest detractors, your biggest champions and get them involved
- People are averse to change, and change management itself is complicated. Involving key stakeholders and champions can help ensure faster adoption by getting more buy-in.
- Help people understand that if things don’t change, business can’t move forward.
- Review existing processes to find sticking points. Where can processes be integrated? connecting documents, people, and processes in one place creates a single source of truth giving legal a the visibility and control they need while helping them to empower teams—creating a self-service model of contracting that frees up time to do more strategic work.
- Second, and easier done with a legal ops role in place, identify workflows and processes that are successful, maybe by contract type (M&A, NDA) or process (buying, selling, etc.) and make them repeatable, systematic, and automated. Automation is what allows legal as a function to grow and scale with business needs.
- A mature legal team or legal ops team will have comprehensive analytics and reporting that aligns with the overall business strategy and a clear line of sight into their data.
- A contract lifecycle management platform delivers that single source of truth needed to reconcile speed with compliance, automation of the entire contract process, scalability, and optimization.
- What to look for in technology? Look for simplicity. Technology is only as good as those that use it. Ask how much training is required, how long implementation will take and if there additional costs so you go in with eyes wide open.
Best-in-class organizations are shifting their perception of the legal and compliance function from a cost center to one of investment—in people and technology. The increased demand for more efficient, cost-effective in-house legal ensures an important place for legal operations managers in the days to come and highlights how legal ops and technology are the two critical pieces to becoming a strategic business function.