Legal Operations for Small Legal Departments

Much of the conversation about legal operations centers on mega-corporations. Members of the Corporate Legal Operations Consortium, for instance, have a median company revenue of US$7 billion, an average external legal spend of US$60 million and law department headcounts as large as 296 people. CLOC members in the biotech industry have an average of 27 full-time employees dedicated to legal operations.

That’s great for them, you might think, but we have six people total and a fraction of that budget. What about us? How do we leverage the principles of legal operations to perform with the power of a large legal department?

First, you’re not alone. According to the most recent Altman Weil Chief Legal Officer Survey, more than 60 percent of in-house legal departments do not have an administrator or business manager dedicated to operations. The numbers become clearer when in-house law departments are broken down by size. About 84 percent of law departments of two to 10 lawyers do not have operations staff, while about 75 percent of departments of 51 or more lawyers do.

And that may not be likely to change soon. Only about 4 percent of small legal departments said they plan to hire an administrator in the next 12 months.

Regardless of size, all in-house legal teams want to provide the best legal services to their organizations in the most efficient and effective manner. That’s the basic objective behind legal operations, and you don’t have to be in a monolithic corporation to get there.

Here we offer the first of a series of Xakia blogs to focus on small legal departments, and what you can do to implement legal operations decisions and processes to help make your team more efficient, manage risk and control costs.

It starts with data

The power of legal data analytics – for even the smallest legal department – cannot be understated. However, the concept of collecting, analyzing and acting upon legal team data can be daunting for a department that’s accustomed to manual reporting or myriad spreadsheets. But you can introduce the discipline of legal operations through legal data with four simple questions, whether your department has one lawyer or 100.

1. What’s the point?

Before you start collecting data, understand how it can help you and your in-house legal team. There’s an old adage, “What gets measured gets done.” What needs doing, and how can you measure it?

By understanding the nitty gritty of your legal department through data, even in a small legal department, it becomes possible to identify more effective and efficient ways to deliver legal work.

Some ways data collection can help:

• Prioritize work
• Allocate resources
• Identify work that should be automated, eliminated or managed elsewhere
• Demonstrate the value of a legal function to the business
• Manage the budget and allocate costs to business units
• Handle external firms (including fees, deadlines and quality)

2. How can we measure it?

It’s not always feasible to implement a comprehensive data collection program in a department that’s already running hard to keep up with day-to-day deadlines. Focus on achieving immediate and impactful results with small, consistent measurements.

These should include:

• Who needs the work (eg. select from a list of divisions or departments)
• Who is doing the work (eg. select from a list of internal team members, and your outside legal counsel)
• What is being done (eg. work types, legal categories)
• When it is required (eg. date or broad time frames)
• Why it is important (eg. rating on an appropriate scale for company strategy)

Two secrets to successful data collection:

• Keep it very simple: trying to collect too much information leads to inconsistency and rebellion.
• Make it quick: this should take less than one minute. Whether in an excel spreadsheet, or in specifically tailored in-house legal matter management software (like ours), this data collection must be painless.

3. What does the legal data show?

Remember your mission, and look to the data for insight. Once your data is collected, you can set up automated graphs, dashboards and reports to illustrate the metrics relevant to your communication goals. Manually arranging charts over and over again is not necessary and not where you should devote your time.

Once visualization is automated it’s time to dig in. You will see:

• lumps and bumps and bottlenecks over time or at specific periods
• types of work that ebb and flow
• the relative importance of types of work, particularly as it pertains to the company’s strategic goals
• utilization of resources, how, when and why they are used
• delivery of work relative to deadlines

Your numbers are likely to confirm what you already know instinctively or anecdotally…but now you have proof, a data set that will form the basis for both your discussions and your decisions.

And there may even be a few surprises in the mix, data that alerts you ahead of time to risks or resourcing mismatch which may be more difficult to discern in a small department.

4. What do we do about it?

With data in hand, you can have productive, evidence-based discussions:

• with your company about budgets, cost allocation and resourcing needs
• with your outside law firms about their delivery and rates just as a large, better resourced in-house legal department would be able to do
• with your team about workloads and areas for improvement

These discussions will flow naturally with data in hand and automated reports that provide visual representation of the challenges and opportunities within your legal function.

“Happily Ever After” results – No FTEs required

By capturing small data in a fast and painless matter, and by automating data analysis, you can observe patterns in your department’s legal work and changes in outcomes over time. You will be empowered to pursue continuous improvement, and you will be valued and respected by company leadership for your strategic alignment and innovation.

That’s legal operations. It doesn’t take a colossal department or a multimillion-dollar budget. It just takes curiosity, commitment, and data.

Want to find out how to shop smart for LegalTech and legal data?

To build a more efficient and effective in-house legal team, you need two things: legal data and LegalTech. While legal data will empower your team to make smarter decisions, legal technology enables you to execute faster and more reliably. The two are inextricably linked. Download our white paper to find out how to shop for both. You can also check out our blog to learn our top 5 tips when evaluating legal tools for your in-house legal team.