The corporate legal department has historically been perceived as a cost center, a necessary expenditure, and a domain resistant to innovation. However, the contemporary, technologically advanced business environment necessitates a paradigm shift. Modernizing the legal department’s structure transcends mere efficiency improvements; it is a strategic imperative to transform the department into a proactive partner, a key contributor to organizational value, and a critical guardian of the company’s future. And legal operations, a relatively new role, has emerged as central to modern corporate legal department structure.
Enter legal ops: the operational backbone of corporate legal department structure
The operational backbone of a modern legal department is increasingly defined by the strategic integration of legal operations, a function designed to manage the “business of law” and liberate legal professionals from administrative burdens. This vital function allows lawyers to dedicate their expertise to core legal matters, enhancing both efficiency and strategic impact.
At the heart of legal operations lies a number of areas. Technology management, for example, entails the selection, implementation, and maintenance of legal tech solutions that streamline workflows and enhance productivity.
Equally critical is budgeting and financial forecasting, where legal ops professionals develop and manage departmental budgets, ensuring fiscal responsibility and strategic resource allocation.
Vendor and outside counsel management falls under their purview, involving the negotiation of contracts, performance monitoring, and spend analysis (including legal invoice review and management), and relationship management with external legal service providers, thereby optimizing costs and ensuring quality.
Data analytics and reporting are essential components, enabling the department to track key performance indicators, identify trends, and demonstrate value through data-driven insights.
Finally, process improvement initiatives, driven by legal ops, focus on identifying bottlenecks, streamlining workflows, and implementing best practices, leading to increased efficiency and reduced operational drag. By managing these critical functions, legal operations transforms the corporate legal department structure from a reactive cost center to a proactive, strategically aligned business partner.
Strategic enabler and efficiency driver
Legal operations functions as a pivotal strategic enabler, transforming raw data into actionable insights that empower informed decision-making within the legal department—as just one example, by leveraging contract analysis tools for informed business intelligence. By meticulously gathering and analyzing key performance indicators, market trends, and internal operational metrics, legal ops professionals provide a comprehensive understanding of the department’s performance and its impact on the broader organization.
This data-driven approach facilitates the alignment of legal department objectives with overarching business goals, ensuring strategic alignment with the company’s vision. Consequently, legal ops helps bridge the gap between legal expertise and business acumen, enabling the legal department to become a proactive partner in driving corporate strategy rather than a reactive support function.
The implementation of robust legal operations practices also acts as a significant efficiency driver, leading to substantial cost reductions and improved operational effectiveness. By meticulously streamlining processes and strategically implementing legal technology directly or through their legal service providers, thereby optimizing the legal service delivery model, legal ops professionals optimize workflows, eliminate redundancies, and automate routine tasks.
This optimization extends to the management of external legal vendors how internal and external resources are strategically and practically allocated based on role and function, ensuring that every dollar spent contributes to the department’s strategic objectives. For example, by outsourcing “run the business” IP operations activities to service provider partners, legal departments can elevate their IP practices while reducing overhead and freeing up internal resources to focus on higher value work.
By focusing on process improvement, optimized resource allocation, and technology integration, legal ops transforms the corporate legal department structure into a lean, agile, and cost-effective unit, capable of delivering exceptional value to the organization.
Finally, in the modern corporate legal department structure, legal operations plays a crucial role as a cross-functional coordinator, fostering seamless collaboration and communication between the legal department and other business units. By acting as a central liaison, legal ops professionals facilitate the exchange of information, align departmental goals, and ensure that legal considerations are integrated into strategic business initiatives. This coordination is essential for breaking down silos and promoting a holistic approach to risk management and compliance. By proactively engaging with departments such as finance, human resources, and IT, legal ops ensures that legal perspectives are represented in key decision-making processes.
Why legal ops is not a traditional part of corporate legal department structure
While the influence of legal operations is undeniably growing, it’s essential to recognize that its role diverges from that of a traditional, hierarchical corporate legal department structure. At its core, legal operations functions as a supporting mechanism, albeit a highly strategic one. The fundamental responsibility for providing legal advice and representation remains firmly within the purview of the General Counsel and the legal teams. Legal operations facilitates the efficiency and effectiveness of these core legal functions, but it does not replace them. It provides the infrastructure, the data, and the process improvements that empower legal professionals to excel.
Furthermore, the structure and scope of legal operations are inherently variable, adapting to the unique needs and scale of each organization. variability reflects the dynamic nature of legal operations, its ability to scale and adapt, and its focus on providing tailored solutions that meet the specific requirements of the legal department.
Building a legal department for the future
In essence, legal operations has ascended to a critical position, enabling legal departments to operate with unprecedented effectiveness and strategic alignment. It serves as a central coordinating force, optimizing resources, streamlining processes, and fostering cross-functional collaboration. However, it is crucial to understand that this centrality does not necessarily equate to a position at the apex of a traditional organizational chart. Instead, legal operations functions as a vital, interconnected hub, facilitating the seamless operation of the legal department and empowering it to become a strategic partner within the broader organization.
To learn more:
Read the Litigation Survey report on legal department modernization.
Watch the recorded webinar, Meeting the Mandate: Legal Operations Built for 2024 and Beyond.
