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3 Things Disrupting Corporate Legal Departments Today

Content graciously sponsored by SimpleLegal.


For decades, corporate legal departments went about their business without as much scrutiny as other departments had on their financials. “Legal is different” was the status quo and the C-suite accepted it.

That largely changed when the 2008 recession hit the global economy. The downturn was so severe that finding efficiencies and cutting costs became a critical component of business survival. The global recession sparked the need and expectation that corporate legal departments behave more like other business units, with a greater focus on efficiency and financial discipline.

To help corporate legal departments meet these new expectations, they turned to a new function — legal operations — that would use process, technology, and data to disrupt the traditional way legal departments had operated.

Process

Because most of a legal department’s spend is on outside counsel, legal operations professionals often focus their energy on gaining visibility into outside counsel spend. In fact, according to the Blickstein Group’s Law Department Operations Survey, the number of legal ops professionals who direct or manage the selection of outside counsel has grown from eight percent to 36 percent over the past 10 years.

Since the 1990s, companies that have in-house teams would select and manage their own outside counsel for a particular matter. The problem with this traditional approach was that:

  • The selection process had little rhyme or reason;
  • There was little clarity as to whether the legal department was using the best law firm for the job;
  • Budgets were rarely required; and
  • Corporate legal departments had limited visibility or control over costs.

Legal ops professionals recognized that who you hire is important, but how you hire is just as important. This idea created an opportunity to bring more rationale and order to how legal departments source and manage outside counsel. By establishing set playbooks and decision-making parameters, legal departments have better control over their relationships with outside counsel and, in many cases, can lower legal costs through more operational rigor.

Technology

Historically, corporate legal departments have been slow adopters of technology. But new processes often require new technologies to support the change. For example, it’s great to have billing guidelines to manage and control outside counsel spend, but if you don’t have a way to automatically enforce them, billing guidelines are not always followed by your firms.

Being the champions of change, legal ops professionals are leading the charge to bring more technology into the legal department to achieve successful outcomes for the department’s initiatives. Modern legal technology provides the tools necessary to enable corporate legal departments to run more like other business units and allow all stakeholders — your firms, internal teams, and other business units — to remain in sync. This reduces errors, minimizes inefficiencies, and provides other teams with visibility into what legal is doing to ensure everyone is on the same page.

Data

With the adoption of new technologies, legal departments are now able to collect, analyze, and use actionable data to make better business decisions. For instance, legal operations technology can provide:

  • Insight into hourly rates, actual spend vs. budget, and matter cycle time to verify your department is selecting the right law firm for a particular matter at the right price; and
  • Vendor performance data to negotiate more beneficial alternative fee arrangements and to identify work that could be better handled by an alternative legal service provider at a lower cost.

By ensuring that data from every facet of the department is collected and properly managed through modern legal technology, legal teams have a huge opportunity to bring efficiency and savings to the department at scale.

Driving disruption in the legal department

It’s an exciting time to experience and influence the amount of positive change occurring within corporate legal departments. Legal departments are turning to legal operations professionals to help achieve the best outcomes at the best price. The leaders in this key role are helping disrupt the status quo by modernizing processes, adopting modern legal technologies, and taking advantage of data now available to make better business decisions.

For a deeper analysis of the disruptive changes taking place within modern legal departments, as well as seven predictions for the future of legal operations, download SimpleLegal and Onit’s latest whitepaper, Driving Disruption in the Law Department.

About the Author

Nathan WenzelNathan Wenzel is the CEO and co-founder of SimpleLegal, and has over 20 years of experience in business intelligence and analytic applications. As CEO, Wenzel leads company strategy, product direction, and adoption of the SimpleLegal platform, which offers solutions for e-billing and spend management, matter management, vendor management, knowledge management, and legal analytics and reporting. Prior to SimpleLegal, Wenzel was a founding partner of Edge Solutions Inc., a business intelligence and analytics consulting firm. He oversaw the development of the CLVR suite of analytic applications for litigation management, corporate legal departments, and insurance companies.



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