What Is Legal Operations & Does Your Law Firm Need It?

Legal operations or “legal ops” is changing the way in-house legal departments run things. But what is it, and why does it matter? And more importantly, can it make a difference for law firms?

This guide has the answers you need to understand legal operations and determine how it can benefit your law firm.

What Is Legal Operations?

Legal operations management is a multifaceted discipline designed to optimize the various aspects of a company's in-house legal department. It is a strategic approach that combines technology, streamlined workflows, financial management, and more to enhance the overall efficiency of a company's legal team.

At its core, legal operations is about managing in-house legal like a business. It is not the same thing as legal administration, nor is it practicing law.

Unlike legal administration, which focuses on administrative tasks like drafting documents or responding to client inquiries, legal operations management is a more comprehensive process that oversees all elements of the legal department (besides practicing law).

Why Is Legal Operations Important?

According to the 2022 ACC Chief Legal Operations Survey, 60% of legal departments have at least one legal operations professional. Furthermore, 69% of respondents said their most critical strategic initiatives lie within legal ops.

1. Legal operations isn't limited to corporate legal departments; it also offers benefits for law firm management. Below are five advantages that demonstrate its importance for legal teams of all sizes.

2. Cost Efficiency: Legal operations aim to optimize processes and minimize unnecessary expenses.

3. Enhanced Productivity: Legal operations can also identify areas to reduce time-consuming tasks, freeing lawyers to devote more of their day to their core responsibilities.

4. Strategic Decision-Making: With valuable data and insights, legal ops teams know how to make informed decisions that align with short and long-term goals.

5. Scalability: Scalable processes and technology solutions help businesses to adapt to changing demands without sacrificing quality.

6. Compliance and Risk Management: Legal operations can help law firms adhere to legal and regulatory requirements, ensuring compliance across the organization.

What Are the Components of Legal Operations?

Legal operations often organize their broad spectrum of functions around a framework known as the CLOC Core 12. These core components are put forth by the Corporate Legal Operations Consortium (CLOC) to provide structure and guidance for legal operations teams.

Here’s an overview of each competency:

1. Business Intelligence

Legal operations aim to turn data into actionable insights. They excel at deciphering complex datasets, recognizing patterns, and presenting findings to drive informed decision-making. With their expertise, legal departments gain the ability to fine-tune strategies and improve processes.

2. Financial Management

In this competency, legal ops professionals carefully assess the use of the department's financial resources. Some of their responsibilities include budgeting, cost control, and financial reporting. The goal is for the team to operate within the defined budget and adapt as necessary to contribute to the organization's financial objectives.

3. Firm and Vendor Management

Creating and maintaining strong relationships with partners is vital to a successful business. In this role, legal ops ensure legal departments have access to high-quality services at cost-effective rates. This fosters productive partnerships that align with the organization's resources.

4. Information Governance

This component consists of the management and storage of sensitive data. Legal ops teams develop and enforce policies to ensure all confidential records are compliant with the organization's regulations and safe from data breaches. This applies to both digital and physical documents.

5. Knowledge Management

In this realm, legal operations professionals excel at tapping into the knowledge of an organization's members. Legal ops teams should uncover best practices and share these insights across the organization. Some examples include templates, access to time-saving tools, or a resource guide that allows team members to quickly find the answers they need.

6. Organization Optimization and Health

This element places a high value on the hiring process and continued support throughout one's lifetime with the company. Legal ops recognize the importance of selecting the right people for the right job and look to hire with long-term goals in mind. They also stress the value of keeping strong employees with promotions and incentives that reinforce their commitment to succeeding in their roles.

7. Practice Operations

Legal operations teams are entrusted with optimizing lawyers' time for the practice of law. Their primary objective is to minimize the burden of non-essential tasks, crafting a streamlined workflow. This allows lawyers to dedicate their days to more high-value, substantive work. Through these efforts, legal ops professionals boost law firm productivity and elevate the quality of legal services provided.

8. Project/Program Management

As we discussed previously, legal ops professionals are skilled at putting the right people in the right jobs. Project and program management follows this same concept.

Legal ops teams staff initiatives with the best people to complete them. Additionally, they monitor the effect of one-off initiatives on the organization's overall workflow to ensure everything continues to run smoothly despite adding new projects.

9. Service Delivery Models

Service delivery models aim to establish a network of closely aligned vendors with your business and each other. This approach optimizes your service providers, enabling you to efficiently match each specific need with the most suitable vendor. It's about strategic collaboration and smart resource allocation.

10. Strategic Planning

Strategic planning is at the core of legal operations management, guiding the organization's decision-making process and future. It involves defining short, mid, and long-term goals and charting the strategies to achieve them. These strategies should be carefully aligned with the organization's overall objectives to ensure a clear path for growth and success.

11. Technology

Technology is a catalyst for streamlined processes and greater efficiency. Legal ops know how to leverage technology solutions to automate repetitive tasks, manage data effectively, and facilitate seamless communication. This technology-driven approach empowers legal departments to adapt to evolving industry trends and stay connected.

12. Employee Training and Development

Employee training and development are integral to legal operations, ensuring that teams possess the skills and knowledge necessary to excel. Legal ops professionals prioritize ongoing training initiatives, fostering a culture of continuous improvement. By investing in their team's growth and expertise, organizations can enhance their overall efficiency and competitiveness in their market.

Tools That Legal Ops Teams Use

Legal operations teams use various tools to streamline workflows and enhance overall efficiency, from legal billing software to case management solutions.

One such tool is LawPay Pro, an all-inclusive billing and payments software designed specially for law firms. This platform adheres to the same core concept as legal operations: to optimize law firms' efficiency and help lawyers get paid for their most valuable service, practicing law.

LawPay Pro makes it easy to track billable hours, send invoices, and receive payments, all from one user-friendly program. There's no learning curve to overcome, and it can be used by lawyers just as easily as legal ops managers.

With LawPay Pro you can:

• Accept secure online payments
• Send one-click payment links
• Set and track billable hours goals
• Create invoices from time and expense entries
• Make informed decisions with invoicing insights
• Reclaim 12 hours per month from tedious tasks

Should Your Law Firm Hire a Legal Operations Manager?

Many law firms contemplate whether to bring a legal operations manager on board. The answer often depends on the size and complexity of the firm.

Legal operations can prove invaluable for larger firms with intricate operations, as they help optimize processes, manage resources, and align strategies with organizational goals.

Small to midsize firms may find that legal operations responsibilities can be efficiently managed by existing staff or with the right technology solutions. For instance, software tools like LawPay and MyCase offer a comprehensive approach to legal billing and case management. These platforms help law firms streamline administrative tasks to maximize billable hours and prevent lawyer burnout without the need for dedicated legal operations staff.

Optimize Efficiency and Boost Profitability

Legal operations optimize the efficiency and effectiveness of law firms and in-house legal departments. However, it's important to recognize that there are multiple ways to achieve its benefits.

While some firms may opt for hiring a dedicated legal operations manager, others may discover that the right technology can produce similar results without additional personnel.

Whichever path you choose, the goal remains the same: to grow in the ever-evolving legal landscape and deliver the best possible service to your clients.

To learn more about how LawPay can streamline your law firm’s workflows, schedule a demo today.