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If you’re in legal ops, you’re familiar with the directive to “do more with less.” Corporate legal departments are often stretched thin. But in today’s economic environment, it’s important to understand just what that means.
The Thomson Reuters Institute recently surveyed corporate legal professionals to find out. The institute’s 2022 Legal Department Operations Index revealed that 59% of corporate LDOs anticipate a flat or decreasing budget, yet 65% see matter volumes increasing as almost half of these departments bring more work in-house.
Less budget, more contracts. You know the feeling.
With tight budgets and already-limited headcounts in most corporate legal departments, what’s the solution to 1) getting things done 2) on time and on budget 3) driving positive outcomes for the entire organization? Your legal ops team is in a position to create more efficient processes that can positively impact multiple departments—from legal to sales to IT and beyond. Let’s talk about how.
Watch our recent webinar with Jessica Nguyen to dig in even further, “The Art of Legal Ops: Building a Team and Measuring for success”
Take stock of your team and play to your strengths
The average legal ops team consists of only 3.8 FTE staff within the larger legal department. Despite our small size, we play a big role: developing and implementing strategies, activities, and processes that align legal services with business outcomes.
With the right combination of legal expertise, business acumen, and soft skills, legal ops professionals act as the thread connecting disparate departments through project management and shared goals. We view the organization through a wider lens to understand what other departments value and need from legal services, then find solutions that benefit everyone.
Why the newness of legal ops helps its cause
Part of what helps legal ops professionals be innovative is the relative newness of this kind of role. Depending on the size of the legal department, legal ops can become whatever the organization needs it to be—within reason.
Versatility on legal ops teams is key, especially when hiring outside counsel isn’t an option. Hiring contract professionals from a variety of backgrounds strengthens the team’s ability to relate to many departments. A legal degree can help, but it’s not the most important qualifier for the role. Legal expertise as well as knowledge of finances, contracts, business operations, and technology all have value here.
A wider variety of experience on your operations team also improves your ability to expertly handle more types of litigation. Plus, our non-traditional backgrounds (who among us didn’t just “fall into” legal ops?) lead to creative solutions that you can’t always find in a group of JDs.
Consider team structure and strengths
Because of the traditionally smaller headcount, legal ops requires flexibility and agility. Take stock of who comprises your legal team. How many lawyers versus contract managers are there? Who (if anyone) takes on responsibilities outside of their role? Who has potential to add value in more ways?
Identifying and leaning into your areas of strength can help you determine how the team can maximize its contribution on the way to demonstrating tangible value for the company. Which of the 12 core competencies does your team already fulfill? Which can you lean into more? Which competencies are lacking that could change things for the better? And what kind of support do you need to make these changes?
Mike Haven, president of CLOC, told Legal Dive that today’s economic environment is a “sweet spot” for legal ops teams. With in-house teams being asked to provide high-quality service with flat budgets and fewer outside resources, that’s probably true.
Simplify the contracting process through automation
Legal ops asks, “How can we improve the contracting process so people can focus on what they do best?” The contracting process presents plenty of opportunities for automating repetitive and tedious tasks—if you have the right technology for it.
What’s interesting is that organizations aren’t necessarily ignoring legal tech; they’re just not maximizing its potential. Thomson Reuters reports, “[M]ore than 20% of survey respondents say that their existing technology is underutilized in at least 13 different technology categories.”
Among the key categories being ignored? Contract management and legal workflow automation.
Nearly 70% of contract professionals report searching for completed contracts at least once a week so they can use them as templates for new contracts, check for upcoming renewals, and review contractual obligations. The right contract lifecycle management (CLM) software not only makes it easier to locate these necessary documents by storing them in one place, but a CLM like Lexion also allows team members across the organization to set alerts so they’re automatically reminded about important obligations like auto-renewals.
When should a small team automate?
As matter volumes increase and companies move to handle more contracts in-house, automation becomes even more important—especially for small teams. Manually completing repetitive tasks simply won’t allow you to keep pace, and legal professionals recognize this: over 70% list simplifying workflows with technology as a high priority.
It’s usually a good time to automate if your business is focused on growth. Acquiring new clients, closing bigger deals, and closing deals more frequently all require contracts. It’s a good position to be in—but inevitably, there’s more legal work to be done to get everything in order.
The sooner you automate, the sooner you can pursue new business and KNOW that your team can handle the workload.
Hire smaller teams, save on headcount
Small teams can accomplish a lot, but they should be able to do so without giving up their sanity. Saving on headcount without sacrificing productivity and efficiency means empowering your small team with tools and technology. Automated intake and workflows can help keep communications in and out of the legal department running smoothly.
Using a CLM immediately adds value to legal ops without adding to headcount. For example, Lexion’s no-code workflow automation lets users standardize processes across deals and departments to create scalable workflows that ensure the right steps are taken by the right stakeholders, no matter how quickly (or how big) you grow.
Getting stakeholder buy-in to spend on technology
It’s true: many people don’t like change, especially if it seems overly complicated or will completely dismantle whatever system is already in place. Even if the current system is inefficient, some people will cling to what they know to avoid having to learn something new on top of tackling their other obligations.
There might be an uphill battle waiting for legal ops when it comes to getting other departments on board with adopting new technology, but it doesn’t have to be that way. Here’s what can help.
- Consult with other departments to discover their pain points. Ask for specifics: what is the most frustrating part of the contracting process for them? Talk with key stakeholders in each department and note where pain points overlap. If it’s a problem for one party, chances are other people are experiencing issues, too.
- Find out which systems and software other departments rely on for daily tasks. Do they have a preferred project management system? Does sales rely on a specific customer management software that’s non-negotiable? You’re looking for the priority integrations that will matter most in the right technology solution.
- Uncover ways to streamline. If they could get rid of one thing in their job as it relates to contract processing, what would it be? What would they do if they had more time? What goals are they currently working toward, and how would they aim higher if the right tech solution was available?
Review your contract workflow to identify steps
After gathering input, compare that to the legal department’s experience. What do you as a member of legal ops and the legal department see happening repeatedly in the contracting process that could be condensed or simplified?
One of our clients, Deborah Solmor at TCS Education System needed a CLM that helped her create manual tracking. Updating the contract status every time it went through another stage of review was time-consuming and unnecessary, considering that it could easily be automated. The right tool would not only update accordingly, but also provide total transparency to relevant stakeholders.
Using a CLM that lets everyone know EXACTLY who’s in control of the document—including past versions—accelerates contracting and declutters communication by enabling waiting parties to contact each other directly.
Bottom line: Get specific on pain points and look for a tech solution that addresses each challenge. You’re looking for concrete ways that technology adds value because people are persuaded by efficient solutions and actual data. When legal ops teams show that using CLM software increases positive metrics while streamlining the contracting process across the board, the team’s value will be undeniable.
Mind your metrics: Why data is your best friend
You have buy-in from other teams and the system is in place, but your job doesn’t stop there.
To demonstrate the value that legal ops’ brings to the table, you need to share your data. The number and type of contracts reviewed, the dollar value of each agreement, and the time to completion or review are good places to start, and gathering that data is much easier to do with a CLM that automates the process for you.
It’s also easier to measure your impact as it relates to other departments when the CLM easily integrates with other departments’ preferred data systems. The data and the results you turn up won’t mean anything if tracking and reporting isn’t consistent across departments. Develop best practices and meet with department leaders to ensure everyone is on the same page with system integrations and how data is collected and used.
What do you consider to be your top KPIs?
Good, clean data helps teams set benchmarks and plan for the future. When setting Key Performance Indicators (KPIs), consider how they impact the overall business and affect individual departments.
Going back to Deborah’s example at TCS, she found tracking and reporting KPIs to be extremely beneficial. She’s able to share the legal team’s performance with her President and TCS’s partner institutions in a more sophisticated way, reporting on metrics like the number and type of contracts reviewed, the dollar value of each agreement, the time to completion or review, and more.
Here are a few KPIs to measure on your Legal Ops team:
• Total number of contracts touched by the legal team (broken down by contract type, ACV, and segment)
• Total volume of matters managed by the legal team
• Number of deals on third-party paper vs. your own template
• Length of time required to complete a task from start to finish
• Total annual revenue legal team assisted with closing the contract
• Average annual contract value of contracts negotiated by legal
• Average length of time by project review type for “counterparty review”
• Average length of time by project type for “legal review”
• Average length of time by project type for “internal business review” (can break down by function, such as Finance or Security)
• Legal costs relative to your product’s average annual contract value (I call this “customer legal acquisition cost”)
• Total annual legal costs (FTE headcount + legal budget) relative to organization annual revenue
• Average ACV negotiated by legal
Tracking legal ops and department spending—especially when compared to outside counsel spend—can go a long way in justifying legal ops’ role while also demonstrating the value added by developing better processes in lieu of using outside resources.
Better contracting, better business
When contracting is easy, deals move faster—and not just for the legal team. Sales, finance, procurement, HR, IT, and every other team in your organization benefits from transparent communication and bottleneck-free contract management. Your business can close more deals faster by:
- Identifying each step of the contracting process, then determining what can be automated
- Identifying each legal ops team member’s strengths and leaning into related competencies
- Implementing a tech solution that integrates with other key systems, is intuitive to use, and ultimately makes everyone’s lives easier
Clearing up the contracting path gives every department the space to do what they do best. Empower your legal ops team to do more with less by implementing the right tools and processes.
Watch our recent webinar with me, Jessica Nguyen (CLO at Lexion), Marie Widmer (Senior Legal Operations Manager, Technology at HubSpot), and Cindy Kaneshiro (Director of Legal Operations, Chief of Staff at Nutanix) to dig in even further: “The Art of Legal Ops: Building a Team and Measuring for success”
