Legal Operations Departments set to embrace innovation says Wolters Kluwer research paper

CEOs now expect their law departments to be managed like other business units with a focus on cost control and desire to drive innovation and competitive advantage. To effectively manage this, the new function of legal operations has emerged to drive innovation and efficiency in corporate law departments. With this in mind Wolters Kluwer’s ELM Solutions has released a white paper exploring innovation trends in corporate law departments.
“Legal operations professionals now play a critical role in shaping in-house practice and are increasingly charged with driving significant efficiencies, controlling costs and scoping out the best way to perform legal services in alignment with the priorities and goals of the company and the business units they serve,” the white paper notes. “This mission is never truly complete. Corporate law departments are building new strategies to move from the long-standing concept of ‘legal as a cost driver’ to a new reality of ‘legal as a value driver’ for their businesses. Fortunately, many legal departments have access to an array of tools, technologies, data and other resources to help them operate more strategically.”
Efficiency is cited by law departments as a top focus area for cost control and an obvious starting point because of the financial benefits inherent in streamlining workflows and saving time, ELM Solutions notes. “As legal departments continue to push for more cost-effective solutions, standardized processes and right-sourcing of work to achieve their goals, they are also rethinking legal service delivery with a more holistic strategy,” the white paper adds. “Most promising is the opportunity to work strategically to provide better service for internal clients and better demonstrate value to the organization; fewer operational activities for attorneys allow more time to focus on legal work.”
Among the areas identified by ELM Solutions contributing to legal department efficiencies are efforts to enforce best practices via business process management tools, such as automated workflows and submission and tracking of service requests. Departments are also optimizing in-house staff use by outsourcing certain legal work, such as bill review and e-discovery and leveraging detailed metrics that aid in decision-making and highlight opportunities for improvement. Savvy company are also comparing outside counsel rates and performance against industry benchmarks for efficient counsel selection.
Many legal departments are also rethinking legal service delivery to determine better ways to manage costs, achieve their goals and, most importantly, demonstrate value. “Rather than simply relying on outside counsel, they are deciding whether to do the work in-house, use outside counsel or try alternative service providers (ASPs) based on the kinds of work that need to be performed, expertise needed, level of resources required and staffing,” the white paper suggests. “Put simply, these legal departments are matching the right resources with the right work at the right time and for the right price – all with an eye to maximizing value.”
Despite an insourcing trend, significant work is still being performed by outside counsel – especially in litigation – so attention must remain on effectively managing the relationship and not just in terms of cost, but in terms of value, ELM Solutions experts warn. The firm suggests there is often a gap between the value that law firms believe they are delivering and the legal department’s perception.
Data, analytics and business intelligence are also essential to effective law department management. “Turning rich, available data into insights to inform data-driven decisions has increasingly been a focus for many law departments. The opportunities to use data and information in a transformative and strategic way have never been so tangible,” ELM Solutions says. “Technology advances in artificial intelligence and machine learning, advanced reporting and data visualizations, benchmarking data and other metrics are proving to be a key part of the corporate legal department’s agenda for advancing their analytics initiatives. With some of these advances, in combination with enterprise legal management technology, the insight and analysis on legal billing and invoices alone can help law departments deliver significant cost savings.”
Certainly the transition from legal advisor to strategic business partner offers significant opportunities and rewards. And, as ELM Solutions suggests, “with the continued focus on cost control along with a number of other key priorities that align with company objectives, legal operations professionals are in a unique position to deliver programs, technology and initiatives that can drive transformative change in how their departments operate and create strategic value for their organizations.”
The white paper, titled “The Call for Innovation in the Law Department”, is currently available for download on the Wolters Kluwer’s ELM Solutions website.