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Feature

Legal ops: The future of the profession?

As an increasing area of interest across the entire legal profession, legal operations is changing the way legal services are delivered – and those who have yet to embrace it have some catching up to do.
   BY LAUREN CROFT

As efficiency and technology prevail over traditional legal practices and the nature of client service delivery evolves into a more hybrid legal offering, legal operations departments have become more in-demand than ever post-pandemic.


In the 2020 LDO Index survey, 81 per cent of legal departments reported having dedicated legal operations functions, marking a 24 per cent increase since 2019. The CLOC State of the Industry survey for 2021 noted a similar trend, with the number of legal operations professionals within medium-sized companies increasing from two to seven in just one year.

With these numbers only predicted to rise in the coming years, Lawyers Weekly spoke to three legal operations and NewLaw professionals to examine the value legal operations brings to the table – and exactly how this space has impacted the legal industry so far.

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A key reason for the growing interest in legal operations across the legal industry is COVID-19, which founder and managing director of Immediation Laura Keily said was a “turning point for the legal sector”.

“Law firms and businesses moved from relying on brick-and-mortar to adapting flexible and cloud-based ways of working seemingly overnight,” she said.

“This has had a profound impact on the legal landscape, with the profession increasingly looking to legal operations experts and platforms to reassess long-held functions, processes and capabilities such as hearings, arbitrations, mediations, negotiations and witness conferences. It’s been great to see and help drive the boom in legal technology, and an honour to work with national bodies, law firms and courts to bring greater equity, capability and capacity to the profession.”

This sentiment was echoed by Lawpath head of operations Natasha Hannah, who explained that whilst the pressures of the pandemic are slowly easing, what’s been left behind is an increased demand for streamlined services.

“Rudimentary legal tasks are becoming more process-driven which is paving the way for automation. Now, this allows for quicker turn-around for certain services while keeping the client at the forefront of legal operations, but it also expands the potential for data-driven processes and analytics,” she said.

“Legal operations can now highlight opportunities previously unseen and predict what legal services clients require both now and in the future. However, this does not mean legal operations will be cutting staff. We’ll require more junior lawyers to understand and work with the new technology to ensure client goals are met. While technology will enable more people to access a wider range of legal services, there will still be a strong reliance on expert lawyers for tailored advice.”

According to the 2020 Legal Operations Maturity Benchmarking Report, legal departments that employ “at least one legal ops professional are more advanced” across a number of functional areas compared to those without.


“For law firms, effective legal operations give you the competitive advantage you need to stay ahead of the competition. For corporate legal departments, if the organisation isn’t transforming around you yet, it will be soon – and you won’t be exempt”

NewLaw manager at PwC Alex Rosenrauch said that whilst the interest has always been there for legal operations within the industry, the past few years have seen an increasing number of legal departments and law firms start up their own NewLaw divisions or dedicated legal operations teams.

“Corporate legal departments and law firms have always felt the increasing pressure from internal and external factors, albeit to varying degrees, to improve the way they work to maximise outputs, reduce costs and hopefully improve the customer’s experience. Legal operations is becoming (and so it should be) a new ‘practice area’ and competency that all in-house corporate legal departments and law firms should have or they risk being left behind,” he said.

“With the introduction of cognitive diversity and a dedicated function or ‘practice area’ that legal operations brings to the value proposition of a corporate legal department or law firm, we’ll see the acceleration of new and innovative ways of performing work, maximizing outputs, reducing operating costs and above all else, improving the customer’s experience.”

In turn, this “practice area” is – and will continue to – changing the very nature of client service delivery, improving customer experiences and driving more value for clients.

“Whether it’s being able to deliver more value by leveraging technology or alternative delivery models at the same or reduced cost to the client or removing client pain points by improving processes, the outcome should be the same – improved client service delivery, importantly, as measured by the client,” Mr Rosenrauch added.

“The changing nature of client service delivery will now have a hyperfocus on client experience, it will almost certainly be technology-enabled, and be much more collaborative and cognitively diverse. Complex legal and business problems will be solved by more than just lawyers within the legal function. They will be solved by a highly skilled team with diverse skill sets that will unlock new value and deliver material and measurable benefits to clients.”

Because of this changing client service delivery, the legal profession has an opportunity to use new technologies to give clients a more “hybrid legal service”, according to Ms Keily.

“While it can feel daunting adapting new tech, I truly believe we have an opportunity, now more than ever, to rethink what a lawyer is and use technology to enhance our practice of the law, not replace it,” she said.

“Alongside the integration of virtual legal tools and environments in dai

ly practice, I believe alternative dispute resolution systems will also become increasingly important as more disputes and claims are raised and resolved outside of the court system.”

New legal tech is also a driving factor in increased client expectations, added Ms Hannah.

“With the increased availability and sophistication of legal technology, there has been a matching rise in client expectations. Clients expect that low-level services will be convenient and relatively low priced. Given the nature of legal work, the expectation of sound and clear results remains. Everything offered must be executed flawlessly,” she said.

And especially as client expectations increase and change, firms need to start “making the most” of available legal tech, Ms Hannah added.

“In order to better serve clients and meet changing expectations, it’s imperative to adopt technology that will allow a team to keep pace without compromising on service quality. Teams must also ask themselves: What are the expectations of my clients, especially in relation to new technology? It seems a simple question, perhaps too obvious, but it needs to be addressed from the ground up so that nothing is overlooked or taken for granted,” she said.

Mr Rosenrauch agreed that client needs should remain the most important thing – and asking clients what they want in a law firm should therefore be a priority.

“The answer is never simple and is always multifaceted – but it’s the best place to start. Whether it’s wanting to reduce cost, increase cycle times or get more bang for the buck, the proceeding question business owners and team leaders should be asking themselves is: do we have the ability to respond quickly and effectively? And this is where legal operations comes in. Do you want to wait until it’s almost too late to be able to respond effectively – or do you want to get ahead of the curve?” he said.

“For law firms, effective legal operations give you the competitive advantage you need to stay ahead of the competition. For corporate legal departments, if the organisation isn’t transforming around you yet, it will be soon – and you won’t be exempt.”

Podcast

Legal ops: A ‘meaningful and valuable’ vocational path

Having been frustrated by what she saw as “deep inefficiencies and archaic practices” across the profession, Naomi Hickey-Humble found a home in legal operations, describing it as “like Goldilocks finding the comfiest bed”

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Lawyers Weekly Live: How will legal ops impact your work moving forward?


We are fortunate to be hosting Mary O’Carroll, the director of legal operations, technology and strategy at Google, as well as Jenny Rees from Lawyers On Demand and Thomas Kaldor from LegalVision, for an in-depth and engaging conversation about the emergence of legal ops, its applicability in the Australian market and specifically for different legal institutions, how such a professional can optimise legal service delivery for legal institutions, the incorporation of such a professional into a legal workplace, how service providers deal with legal operations professionals as stakeholders, and the challenges and opportunities moving forward.

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#Whatstrending in legal ops

In terms of trends to look out for in this space, Mr Rosenrauch explained that the way data is leveraged will become paramount post-pandemic.

“Today we have more data than ever before, and as legal departments and law firms continue to invest in legal technology to streamline service delivery, the tools available to capture more sophisticated and structured data are increasing exponentially. But not all data captured is important, nor should all data be measured,” he said.

“So, the question becomes, how do you distinguish between the noise and what is important to measure? I believe that the conversation will (and needs to) shift from talking about data being important for the legal industry, to how we’ll actually create and implement a deliberate data strategy to collect the right data, from the right systems and at the right time to make the right decisions and tell the right stories about our value.

“[PwC] call this Legal Business Intelligence, or LBI – and it’s exactly that, being more intelligent about how we leverage data and metrics to measure what matters most to make meaningful and material change that produces better business outcomes.”

Additionally, managed legal services (MLS) and alternative delivery models (ADM) will also begin to gain popularity as “internal and external pressures continue to push corporate legal departments and law firms to look at ways to reduce operating costs and output more value,” according to Mr Rosenrauch.

“While this upward trajectory isn’t new for MLS or ADM, I predict that the expectation will move from (and to some extent it already has) just obtaining cost savings through labour arbitrage to new value creation and even new lines of service,” he added.

This trajectory has also been observed within Thomson Reuters’ 2021 State of the Legal Market report, which revealed that post-pandemic, legal departments are under more pressure than ever to do more with less – in fact, controlling outside counsel costs was identified as a high priority by 89 per cent of legal departments.

“One of the most effective strategies for managing the costs of external services may, however, be tied to a significant change in the organization and management of corporate legal departments themselves. In recent years, an increasing number of legal departments (particularly large ones) have created legal operations staffs with the specific mission of managing the overall operations of the department – including the oversight of outside counsel,” according to the report.

The creation of more legal operations teams within legal departments and firms will also pave the way for enhanced legal technology to further optimise and automate elements of the profession. Mr Rosenrauch added that whilst implementing new legal technology is always “worth it”, corporate legal departments, in particular, can often turn to technology their organisation already has.

“Whether it’s using Microsoft Power Platform to build a simple intake and matter management tool, or using SharePoint to create simple document and knowledge management tools, I predict these tools becoming very popular to build out proof of concepts (POCs) and minimum viable products (MVPs) that will pave the way to quantify the need, ROI and business case for purpose built legal technology,” he explained.

“It is also likely that those who are a little more mature on the tech front, particularly in workflow and document automation, and are looking to expand beyond what their enterprise offers in this space, will be looking to more advanced purpose-built citizen developer tools. Tools like no/low code applications will allow teams to drastically expand their automation capabilities to not only reduce lower value, lower risk work, but to also automate up the value chain and optimise the higher value and higher risk work.”

Ms Hannah reiterated this and predicted that automation – particularly, increased adoption of online document creation and management – would be demanded by clients and lawyers alike.

“We’ve seen a dramatic increase in clients collaborating on our platform documents with their team members and managing all of their legals [sic] within their business account,” she said.

“With people continuing to work remotely and clients continuing to appreciate the flexibility and usability of this technology, the desire and need for online documentation tools will continue to trend upwards – for, within the same suite of tools, lawyers should be able to collaborate with one another on various documents and then share them directly to their clients, cutting out format and postal headaches for all parties and expediting the delivery of services. Anything less will send clients elsewhere.”

Likewise, integrated legal solutions will become a core part of the profession moving forward, according to Ms Keily.

“We’ll see computers assisting decision-makers and advocates in ways that haven’t yet been established, with technological assistance in the courtroom expanding beyond simple screens and mouse clicks,” she said.

“Digital will become the predominant solution with in-person as the exception, and the readiness of the legal profession to adopt these ways of working as they arise will be crucial to ensure they can service clients effectively – and competitively – in an expanding legal market.”


“The conversation will (and needs to) shift from talking about data being important for the legal industry, to how we’ll actually create and implement a deliberate data strategy to collect the right data, from the right systems and at the right time to make the right decisions and tell the right stories about our value”

Feature 2

Legal operations in 2022

“It’s an exciting time to be a part of the legal industry. The digital disruption experienced by the profession over the last 18 months is leading to a sustained period of continued transition, with law firms increasingly taking up purpose-built technologies to streamline their practice,” Ms Keily added.

The pandemic also demonstrated that the Australian court system needs to become more flexible in order to improve access to justice – and Ms Keily noted that an “air of change” can currently be seen across the country as courts seek to “invest in technologies that remove barriers of distance and cost for communities across the country”.

“As this continues, we will see opportunities arise with practitioners being able to take advantage of a rapidly expanding geographical remit. I’ve talked to law firm partners who have seen their practices suddenly become national in litigation and they are briefing barristers interstate in a frequency that has never happened before,” she said.

“Access to justice is now access to technology, and as we see the industry become far more evolved regardless of local, national and international borders, the affordability and accessibility of justice will increase.”

And particularly as Australia moves into a post-pandemic era, legal services will increasingly be delivered remotely – regardless of government restrictions, Ms Hannah said.

“Lockdown or not, clients now understand that in-person delivery is not a requirement and so they expect to be able to access what they need from their laptop or their phone. Things like online contract management systems and e-signatures for documentation will continue to trend upwards as these remote services successfully achieve the result for the client while also making their lives easier,” she explained.

“We’ll also see a more competitive landscape for legal professionals’ country-wide. Clients realise that they are no longer restricted to the services available in their town or city, and with more legals being delivered online they are able to tap into resources they did not have access to pre-pandemic.”

These positive changes are a result of innovation becoming a requirement over the last 18 months – instead of merely an option. And whilst the legal profession has historically been slower to adopt new technology and ways of working, Mr Rosenrauch said that COVID-19 forced firms to become more resilient and step out of their comfort zones.

“For those who had legal operations teams or partners by their side during the pandemic, they’ve seen the value the investment can bring. And for those who did not, it shined a light on the capability gap they now know they need to fill,” he said.

“So, in the next year for legal operations post-pandemic, we are likely to see a focus on both maintaining the significant momentum that the pandemic has created for innovation, or – for those who are yet to invest in legal operations – playing catch-up to the rest of industry.”

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