The role of the modern legal department has changed dramatically. Corporate law departments are no longer being viewed as a cost center that reacts to legal needs and requests from the organization, but are pro-active in working to support business goals and add value to the organization leading to substantial changes in the role of the modern legal department.

The modern legal department is more corporate in its approach, utilizing formal operations management disciplines. It’s no surprise then, that 70 percent of legal departments say that a focus on legal operations is a priority, according to the 2018 State of Corporate Law Departments report by Thomson Reuters, Acritas and Corporate Legal Operations Consortium (CLOC).

Nearly half of legal departments now have dedicated legal operations roles. Most legal departments surveyed have between one and three people managing legal operations, but 35 percent of legal departments with dedicated legal operations have four or more people in those roles, and those numbers are increasing. In fact, large corporations – those with $10 billion in annual revenues or more – have an average headcount of 21 legal ops professionals.

The increasing emphasis on legal operations is just one example of the new approaches being implemented to better organize legal departments and manage legal work.

Three key themes emerge as central to the modern legal department. First, fostering a culture of ongoing improvement and innovation. Second, embedding data-driven review and decision-making; this means embracing metrics as “the way we do business here.” And third, developing more collaborative business partner relationships with external suppliers to deliver better outcomes.

And there is one additional key component throughout all of this. And that is having the information systems and technology to effectively measure the department’s work. Measurement enables more effective management by providing greater detail of both demand and spend for the department’s legal work. Like every other department in the organization, legal departments are becoming more data-driven, enabling them to gain greater control over their activity.

The key to effective measurement is knowing not only which metrics to track, but how to enhance each metric against three legal function goals: greater efficiency, more effective work, and preventing legal risk. Legal departments that are successful in optimizing measurement become more predictive in anticipating and pro-actively managing situations, rather than being reactive, and at worst, “chaotic” in managing their work and legal spend.

As the cliché goes, knowledge is power. And having the right information enables better decision making, leading to more efficient legal operations and ultimately, a legal department that is best positioned to help meet both the legal and business needs of the organization

Editor’s Note: This post was written by Chris Maguire, managing director of the U.S. Corporate Segment for the Legal business of Thomson Reuters.

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