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Elevating Legal Operations to the Status of Legal Advice

July 01, 2022

By Lourdes M. Fuentes, L’92, Founder of Karta Legal LLC

“A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”

~Andrew Grove, Former CEO, Intel

Introduction

One of the biggest challenges facing the legal industry today is how to embrace change management to adapt in the era of digital transformation. This challenge must be met with a clear strategy. At the core of that strategy is a thoughtfully planned and executed legal operations (“legal ops”) program. This holds true for both legal departments and law firms. In fact, a symbiotic relationship should exist between the law firm and its legal department clients around legal operations. Moreover, excellence in legal operations today should have equal status to excellence in legal advice.

What is Legal Ops?

Legal ops is the combination of all the business activities, processes, and people that empower a legal team to serve the legal needs of its clients using a strategic business approach. Legal ops should not be equated with buying and deploying legal technology. Rather, the concept behind legal operations is about having a team with expertise in law, technology, and business. The collective job of this team is to assist practitioners in the efficient delivery of legal services. The words “team” and “expertise” should be taken literally. Legal ops cannot be left to the untrained or inexperienced and cannot be handled by any single individual without the right combination of legal, business, and technology backgrounds. The deeper the skill set of the team the better it will serve the needs of the practitioners and their clients.

FPI Legal Ops Blog

The role of legal ops involves upskilling legal professionals, creating or redesigning processes with a continuous process improvement mindset, and effectively deploying technology where applicable. All of these steps and tasks should be tailored to the needs and budget of the legal team it is assisting and, consequently, the clients. A client-centric approach is of the utmost importance.

The legal ops team should have the ability – meaning a grasp of necessary concepts and vocabulary as well as the institutional authority - to work with practitioners, all support staff, and IT to enhance data management and information governance, avoiding risk and streamlining compliance. Similarly, legal ops should work with the practitioners on a wide range of strategic roadmaps, planning and prioritizing legal services delivery such as improving the contract lifecycle management, data mining and analytics for reporting purposes and for better budgeting and creating Alternative Fee Arrangements, improving billing and collection practices, responding to, or creating, RFPs, outsourcing work better done elsewhere, vendor management, reviewing innovative technology, project management, budgeting, client pitches, and more.

In sum, the purpose of legal ops is to handle the business of law apart from the practice of law itself. Recognizing, of course, that the two also must have a symbiotic relationship.

Raison d’etre

“If a company isn’t continuously improving then it is slowly dying.”

~Dave Waters, Artificial Intelligence Pioneer

The idea of elevating legal ops to the status of legal advice may sound controversial, but it is simply common sense in today’s world. Indeed, we could author an entire thesis about why having the best legal operations team acting as the right hand to the best practitioners is the goal. Here we will briefly mention four main and interrelated reasons.

First, digital transformation and the exponential growth of data, processes, and technology surrounding the Fourth Industrial Revolution, cannot be fully harnessed (or monetized) by members of the legal industry without a strong legal operations arm.

Second, to provide excellent legal advice, lawyers must be able to handle such data and corresponding technology properly, effectively, and efficiently.

Third, lawyers cannot comply with their fiduciary, professional, and ethical duties and responsibilities, or even the current civil procedure rules, without bringing to bear a solid legal operations team.

Fourth, it is good for business. Practicing lawyers at the top of their game have either not been trained in legal operations or are too busy doing what they do best, providing legal advice, to focus on this important and ever-evolving need. Incorporating legal ops increases efficiencies, thereby increasing billing conversion rates and reducing non-productive expenses, which can be seen as a net increase in financials. In addition, having a strong legal operations team reduces risk, which may prevent a catastrophic loss. Besides the internal financial incentives, the ability to bring the right tools and/or expertise to bear on problems will increase satisfaction among the team members focused on legal work and among the clients for the services they are buying.

Where are we today?

“Without strategy, execution is aimless. Without execution, strategy is useless.”

― Morris Chang, Founder, Taiwan Semiconductor Manufacturing Company

Not where we should be, yet.

To be fair, most, if not all, major organizations and firms today already incorporate legal ops roles or principles within their structure, even if not explicitly considering them as such. You may be lucky enough to have a team member who is exceptionally adept at technology or one who excels at organization and project management – both could be considered as fulfilling legal operations roles when applying those skills to projects. You may even assume or hope that they will continue to volunteer their talents when they see a need in the future. But hoping is not a strategy. Therefore, intentionally and conscientiously creating a legal operations team requires vision and strategy. Once you have the strategy, you need a properly prioritized and staffed execution plan.

Legal departments have been the most proactive in embracing legal ops when compared to their law firm counterparts. Yet, there is still much to be done. The 2021 ACC CLO survey2 results reflect the rapid growth of legal operations. More than six out of 10 legal departments (61%) reported that they employed at least one “legal operations” professional in 2021—and that figure has nearly tripled since 2015. But one (1) is not a “team.” The survey further reported that 21% of legal departments employed at least four legal operations employees, and 13% of CLOs said they plan to hire legal operations staff in the year ahead.

Law firms have been slower to adopt legal operations as a standalone department. There is no clear data on how many firms have something akin to a legal operations team or department. Of course, most law firms already have components of legal operations in place – litigation support, administrative assistants, paralegals, and IT – but those groups are often relegated to their roles and only called upon to provide a specific requested deliverable or piece of information when an attorney or a practice group wants it. We have also seen an increase on C-Suite hires at firms, which shows an understanding of the importance of conducting law as a business. According to Colliers International’s 2017 white paper The Impact of C-Suite Growth in the AmLaw 200,3 almost 90% of AmLaw 100 firms employed a CIO or CTO. Approximately 30% of AmLaw 100 firms employed a Chief Knowledge Officer, but only 10% of firms in the second hundred of the AmLaw 200 do so. The paper also highlighted that having a CIO/CTO was strongly correlated with greater profits per equity partner. Indeed, the complexity of modern legal practice has disrupted the old model and successful firms now must view “support staff” contingents as valuable knowledge bases which are to be consulted on matters to determine what the right question or desired deliverable should be. Similarly, the support staff contingents are more willing to collaborate with or seek assistance from each other and to voice concerns or offer opinions to attorneys. A case can be made that having a standalone legal ops department in a law firm can provide an umbrella where these otherwise disjointed components can exist and collaborate to the benefit of the clients.

While, as discussed above, the mandate is bigger than remaining competitive, law firms with a particular niche, need, or seeking a competitive advantage are more willing to embrace legal ops than the larger more traditional firms. They are also nimbler because their structure is less complex. At my firm, Grais & Ellsworth, we have been able to successfully litigate tens of Residential Mortgage-Backed Securities cases against most major investment banks and the largest law firms in the nation with a lean team of outstanding lawyers working with my legal operations team, which was built using Lean Six Sigma and legal project management as our foundational blocks. Our lawyers handle high value work, while we outsource low value work, and use best practices in training, project management, processes, and technology.

Another example is BallardSpahr LLP, which has done an excellent job on the legal ops front. The legal ops department is led by Chief Client Value and Innovation OfficerMelissa Prince, a former litigator who manages a 27-person team of multidisciplinary business professionals with backgrounds in law, finance, technology, data science and business intelligence. Her team works in partnership with the attorneys to streamline processes and deliver low code technology solutions designed to deliver value and efficiency to the firm’s clients. With the right process framework in place, technology is indeed the great equalizer between Big Law and all other firms. Indeed, the law firms that have embraced change management and legal innovation through a value centered approach have the evidence to prove it.

Similarly, another innovative approach is being deployed by McGuireWoods. The firm named it MWAccel, a legal operations and data analytics consulting service developed by the firm and McGuireWoods Consulting. MWAccel is helmed by Tom Trujillo, SVP & Director, who is deploying his expertise to help not only the firm identify and execute strategic efforts internally but is also providing that service to GCs and other legal leaders of the firm’s clients. Using their experience and focusing on only a few clients at a time, MWAccel is able to help its clients’ legal teams tackle their highest organizational and operational priorities efficiently and effectively, while still being effective legal advisors to their businesses. As noted by Trujillo: “The ability of law firms and legal departments to identify and execute new ways of doing things – effectively and efficiently – is becoming more and more critical each day. Legal departments are expected to run themselves like a business and to be able to deliver cost savings and enhanced risk management by doing so. At the same time, law firms are expected to find more efficient ways to deliver their services at the same level of high quality. Both of these are simply becoming ‘table stakes’ in today’s legal market.”

It is, however, a fact that additional, faster paced, changes are needed in terms of embracing and expanding legal ops. The challenge resides in great part in overcoming the lawyers’ resistance to change and resistance to embracing new innovative processes and technologies.4 Also, traditionally, no budget has ever been allocated to those functions. There are many ways to trigger change management. One way would be to demonstrate and convey to the stakeholders/partners the value of the innovation being proposed with metrics (e.g., data analytics, financial data, human resource data) to obtain buy-in from key stakeholders. By creating relationships with key stakeholders and demonstrating the benefits of the change you can facilitate improvements while enhancing workflows to balance the cost and the value to the organization.  Additionally, staying current on evolving technologies and understanding which technologies will provide the most value to your organization can be a daunting task. Engaging third party consultants, whose primary role is to review the current state of your organization as it relates to legal ops, recommend process improvements, and advise on the right technologies is an easy place to start. However, the organization itself needs to recognize the importance for legal ops and it needs to build a strategic plan around it. Moreover, the goal should be to create an internal team capable of executing from within.

Conclusion

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

- Darwin

The legal industry is ripe for innovation because of the new normal after the pandemic. Legal technology investments have soared. Big data, regulatory reform, competition from the Big Four, and client demand will continue to push law firms and legal departments to do better on the legal operations front. Some law schools, too, are training the new generation of lawyers.5

While change is always hard, it is incumbent on our industry to modernize legal services delivery to meet the challenges of the new digital era. This mandate comes not only from our professional duties, responsibilities, and current rules of procedure, but also from a pragmatic standpoint in the practice of our craft. Simply put, we need to modernize our legal services delivery to be able to provide top notch legal advice to our clients. Acceptance and recognition of the importance of legal ops are crucial steps to this change management mandate.

Resources

  1. For specific references to the relevant Model Rules of Professional Conduct and the fiduciary duties of attorneys see The Rise of the Technologically Competent Lawyer at https://assets.website-files.com/5cb0b06571c2a70d6460e2bc/5ffd0f57465d783c305ba1e1_The%20rise%20of%20the%20technically%20competent%20lawyer.pdf
  2. See https://www.acc.com/clo2021
  3. https://www.alanet.org/docs/default-source/whitepapers/c-suite-white-paper-5-16-17.pdf?sfvrsn=30104dab_4.
  4. See https://www.kartalegal.com/education/why-lawyers-struggle-to-innovate.
  5. See https://www.thelegaltechlab.com/index.php/resources/ltl-curriculum#sort=modified_date&sortdir=desc.

About the Author

Lourdes M. Fuentes, L’92

Lourdes M. Fuentes, L?92,

Lourdes has decades of experience litigating in federal and state courts, and in international arbitrations. Her detour from courtroom to tech-room, from litigator to technologist, happened seamlessly. Known as the “Fixer,” Lourdes was up to the challenge. She thrived in finding solutions and creating workflows for her clients. She was at the forefront of that critical path that merged IT, litigation support, technology and the law. For the last ten years, Lourdes has led the data, discovery and vendor management in dozens of RMBS cases. Prior to that, she managed discovery efforts for the Madoff Trustee. Lourdes has a passion for education and training, and has imparted these values to be at the core of Karta Legal’s mission. She remains committed to teach others about process improvement, legal technology, privacy, artificial intelligence, diversity & inclusion, and e-discovery issues.

 

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