An article came out recently in Corporate Counsel titled “5 Reasons Why Legal Ops Rules.” According to the Association of Corporate Counsel, nearly half of Chief Legal Officers reported having legal operations staff, a figure that is more than double the number the ACC reported last year. What does this mean for you? It depends. Some of you want to work in-house, perhaps sooner rather than later. This will give you a window into how those departments are thinking and what they care about. For those of you going into the law firm world, you simply have to know what your clients are feeling, thinking and doing.
Several items within the article caught my eye in a list of reasons why “legal operations” is leading industry change, and should give you a window into what is happening within these companies:
As funding for internal legal department processes has begun to exceed external legal spend, legal departments will need to be more selective in deciding what work to outsource.
Funding for internal now exceeds external! Meaning companies now spend more on their in-house staff than they do on law firms. This is a dramatic shift from the way things were not that long ago. And it could mean more legal hiring needs within companies than in law firms, relative to where we’ve been.
Also note the admonition to be more selective about how much companies spend on law firms. To you as a new law firm associate, that means companies are looking for ways to spend less on you! Or, if you want to put a more positive spin on it, they would prefer to pay you as a member of their staff rather than as an outside counsel.
Legal operations teams are tasked with using these technologies to maximum effect to support the same volume of legal work while budgets stagnate.
This goes to efficiency, which is at its core the problem with a law firm model dependent on hourly billing. They make money when they bill more hours not less. So how do you think that will look to a bunch of efficiency experts analyzing the data of outside counsel legal spend v. the result?
These applications (analytics) are not widely used, but their effectiveness only ensures that it’s just a matter of time before legal departments will need to adopt them in order to compete.
This is another point of emphasis on efficiency, and as someone who may work in a law firm, you need to familiarize yourself with how companies will make decisions about risk management and case strategy. Whether you can win or lose a case, whether there is a clear moral right or wrong, all will fade away as a computer will provide the company with what it’s decision should be.
A key component of the role of legal operations staff is to evaluate, introduce and monitor new technologies. The right technologies, deployed at the right time, can be major time- and cost-savers.
Law firms generally aren’t known to be early adopters of technology, so here is another place where they must either quickly embrace 2016 resources, or risk losing more business to more tech savvy firms or to the companies’ in-house departments themselves. (*There is an opportunity for you to go into your firm on day one and be the tech guru, making you incredibly valuable and remarkably always the first young associate asked to come along for depos, hearings and trials!)
I don’t typically spend a lot of time on topics like this, but they can no longer be ignored. Whether you work in a firm or the company client, understanding and working with these new tools, motivations and drivers will be a key to you succeeding. So stay on top of these trends!