During Logikcull's last annual conference, InHouse 21, we heard again and again that 2020 and 2021 were blockbuster years of growth for legal departments. In the case of legal operations roles across various industry sectors and company sizes have been steadily growing since 2020. A 2021 study from CLOC reported that the average number of full-time legal operations professionals in medium-sized companies is seven, each of them supporting approximately 23 legal team members.
As legal operations becomes a more established function within corporate legal departments, Bloomberg Law 2022 reports the main priorities for ops teams these days are the need to control costs, improve workflows, and adopt technology.
Here are six of the most relevant legal ops trends to follow in 2022, all of which can help your department run leaner and prepare for periods of faster growth.
The expansion of legal operations signals the growing influence and value of this function on the whole.
The roles that are growing the fastest within legal ops are those related to project management, data analytics, technical support, process management, vendor management, and financial management. By taking care of these areas, legal ops teams are responsible for adopting technology, controlling costs, and improving workflows. These responsibilities will become even more critical as legal operations mature.
In-house counsel can focus on legal work more effectively by having individuals who handle project management, vendor management, and eBilling in the most optimal way. Additionally, having skilled individuals in general legal administration and operations allows the team to track their progress and meet their goals.
As legal ops teams grow, there is an increasing need to develop an efficient team structure. Legal ops departments are taking a big-picture look to better define roles, workload, technology, and establish processes.
Having a clearer demarcation of the legal ops team’s roles and responsibilities allows the entire team to operate more smoothly. When every team member knows exactly what’s expected of them, they are more productive. Additionally, by having standardized procedures and a knowledge management system, team members can collaborate more effectively and know which tools and workflows to use for each different task.
Finally, tracking incoming and current workloads prompts more rigor around planning and adjusting resources effectively. Teams will also continue to focus on metrics to show ROI and progress on how they're doing towards initiatives.
Because legal operations departments are proactively building efficient workflows, teams will keep prioritizing legal technology that frees up time and resources in 2022. In Gartner's 2021 Legal Planning and Budgeting Report, legal operations professionals listed "technology solutions and level of adoption" as their most significant weaknesses.
Legal ops departments are finding that automating manual work with technology increases the bandwidth to handle more work in-house and save external costs. Instead of waiting on vendors to dictate timelines, legal operation teams have a lot more control over the speed at which they can resolve matters. The most adopted legal software to increase legal ops bandwidth are eSignature, eBilling, matter management, contract management, eDiscovery, and document management.
For example, eDiscovery is an area that can bog down teams due growing data volumes to analyze, long waiting times, and raising vendor and external legal costs. Adopting a tool like Logikcull allows teams to easily conduct eDiscovery, investigations, and subpoenas in-house at a fraction of the cost of what they would pay vendors or outside counsel to handle it.
While it’s obvious that automating tasks can help improve workflows and free up time, another significant benefit to using tech solutions is that they help track and report metrics, showing where the department needs to invest in additional resources or training.
In addition to adopting technology that helps teams focus on deeper work, there is also a tendency to adopt collaborative and efficient solutions as remote work becomes the norm. There are many simple solutions on the market that can help legal operations teams perform higher-level work, and drive efficiencies without going through a steep learning curve or increasing legal spend.
In-house legal departments are facing increased pressure to manage, measure, and optimize financial performance. For the first time in a long while, Apperio's Legal Spend Landscape for 2022 reports that legal departments are focused on improving management and transparency of legal spend rather than just focusing on reducing expenses.
Many in-house legal departments are transitioning from the billable hour to alternative fee arrangements (AFAs). According to Bloomberg Law's 2021 Legal Operations Survey, cost/revenue certainty, cost savings, and overall efficiency are the main drivers in switching to an AFA model.
77% of the respondents for Apperio's Legal Spend Landscape for 2022 reported that structuring more legal work under AFAs is the most effective way to control costs.
Most in-house lawyers surveyed in Bloomberg Law's 2021 Legal Operations Survey said they had implemented a roadmap to track metrics that measure vendor and outside expenditures. The primary metrics used to measure financial performance are overall spend, average billing rate for vendors and attorneys, and project or matter spend.
When it comes to measuring the value of the legal ops department, teams are zeroing in on metrics like the outcome of legal cases, hourly cost per lawyer, and the spend forecast vs. actual spend.
The first obstacle is determining what data you need to measure the department's KPIs. Financial data can be hard to come by if there is no central point of data, a lack of standardized data, delayed invoices, or a lack of information around current projects. This can lead to inaccurate insights and prevent the legal department from accurately measuring its performance. Measuring expenditures will require improved clarity and data in the legal operations department.
Overall, the strategy for controlling overall spend points to bringing more work in-house or using Alternative Legal Service Providers (ALSPs). The 2021 CLOC report found that internal and external expenditures are equally split for those small to mid-sized companies, while large companies favor external spending.
Previously, ALSPs were conscripted to routine tasks that were easily outsourced, such as document review services. Presently, ALSPs are maturing and used for more complex matters and even consulting in-house teams.
ALSPs can improve operational efficiency and lower costs. Still, some of the biggest concerns around adopting workflows that include ALSPs are the quality of services and confidentiality of client information.
In-house departments are retaining more specialized counsel to expand legal expertise. According to the Gartner 2021 Legal Planning & Budgeting report, companies are bringing more specialist legal roles in-house as full-time employees to reduce costly outside counsel and proactively staff in anticipation of regulatory or legal changes. The specific roles Gartner states are moving in-house are in IP and Litigation, which has the highest outside-counsel costs, and Regulatory Compliance and Government Affairs and Relations which focus on protecting the company from regulatory changes.
Outsourcing work to Alternative Legal Service Providers (ALSP) and employing specialized legal positions will become more common practices as growing trends as in-house legal departments tighten their financial belts and look for lower costs. Legal operations teams will continue to bring expertise that complements and supports the changing workflows.
2021 saw an increased galvanization across industries to invest in and implement Diversity, Equity, and Inclusion programs. According to CLOC, implementing a DEI program is a top-ranked priority for legal departments and companies.
Diversity, Equity, and Inclusion (DEI) programs are essential for legal ops departments to help create a more supportive environment for employees, attracting new talent and reducing staff turnover. This is another way legal ops departments can invest in their team and resources.
Measuring DEI begins with tracking the size and demographics of the legal team itself. Then, companies need to audit their hiring practices, retention practices, wages, and pay equity to benchmark against the overall business objective.
Legal ops can also look to their vendors to cast a more comprehensive DEI network to support employees. While looking to partner with outside companies, using RFPs that ask for information about inclusivity is a great way to start finding and working with vendors that prioritize DEI.
The six legal operations trends covered in this article will help you to increase efficiency and optimize costs. Outsourcing to ALSPs, bringing specialized legal positions in-house, and investing in department infrastructure are all ways to save money in the legal department.
Finally, with the adoption of the right technology stack and more efficient workflows, legal ops teams can create the internal bandwidth that allows to bring more relevant work in-house, and greatly optimize external legal spend.