Legal operations isn’t a new profession, and this role has been around longer than you might think. Many are departments that work to make their departments more efficient and generate value, but don’t call it “legal operations.” For example, CLOC (Corporate Legal Operations Consortium), the largest organization that brings together professionals in this discipline, was established in the USA in 2010 to professionalize legal services through management within companies.
Embedded between thousands of daily consultations and poorly organized firefighting, corporate lawyers felt that things could have been done differently. The evolution of the reactive profile towards proactive was natural. The pace of work, the need for immediate response, managing risks and adding value to the business has been an evolutionary mix, with teams that are very fair in size and without increasing the budget of external law providers. If we add to this that general managers demand reporting with metrics and indicators, we are serving the revolution.
What drives the growth of legal operations? In the 1980s and earlier, corporate legal departments focused almost entirely on risk and compliance and on reactively advising the business. Its legal function was understood as a cost, and it was seen as a “stopper” in commercial activities. The complexity of the environment, greater regulation and globalization of markets have made the legal function more relevant. Therefore, the demand for legal services (and thus the costs) has increased and the need for efficiency is greater than ever. The legal department is now expected to manage budgets, improve processes, make strategic recommendations and report with data, as other departments already do.
More than ever, GCs (General Counsel) are under pressure to justify legal costs and increase the efficiency of their departments. These requirements demand that the legal department act more “like a company” by applying management techniques inherent in the legal world. The challenge for a traditional legal team is that the skills necessary to tackle these challenges effectively do not need to be part of the standard training repertoire a lawyer receives. This has led to the need for and rapid diffusion of certain technology, processes and people in legal proceedings.
As a new profession in the legal industry, legal operations is one of the fastest growing professions in firms as well as in-house legal departments, and includes everything that helps create a more efficient department to contribute to competitive strategy. Technical capacity is no longer sufficient, which requires adapting the training from universities to lawyers.
Legal offices are getting more and more complex and need to align with the company’s strategy, be more efficient, find indicators, train employees, manage and select suppliers, and publish reports based on data and risk levels as other departments of the company. This way of working necessarily reverts to companies and alternative models that have to adapt to these new needs, alternative models where hourly billing serves only as an internal management model, not for invoicing.
The benefits of this new way of working help focus efforts on value-added work and use technology to standardize and automate repetitive processes. It also maximizes the value delivered by helping to build closer and more efficient relationships between legal departments and legal service providers in “partnership” models.
To provide innovative legal solutions that help organizations succeed and improve their perception of value, it is necessary to create diverse, multi-disciplinary and fluid teams that offer different capacities and disciplines. More traditional legal professionals may focus more on legal work, and operational work shifts to professionals focused on scaling, accelerating and optimizing these processes.
They undoubtedly help create measurable data analytics that provide metrics and metrics for continuous improvement. To this end, the application of technology is crucial and helps empower the legal services consumer by creating greater polarization between standardizable services and those with high added value.
In short, legal operations represent the future of an ever-evolving profession that requires lawyers who are more educated in new disciplines and more knowledgeable about technology and teamwork skills. The environment, which ceased to be VUCA (Volatile, Uncertain, Changing and Uncertain) after the pandemic, became BANI (Fragile, Anxious, Non-Linear and Incomprehensible). The legal industry is taking firm steps forward in its revolution.
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