Why legal operations matter: How efficient legal management drives business value

“Legal Departments must have the right structure, talent and business partners to achieve their operational excellence objectives”

Legal Departments face constant pressure from top management on several fronts, including delivering more results with limited resources, aligning with corporate strategies and operating under tight budgets. This requires strategic and efficient management of their legal activities, which has been referred to in recent years as “Legal Operations”.

Legal Operations: A Constantly Evolving Field

Legal Operations does not have a single definition, but it is understood as the strategic and efficient management of a company’s legal department operations. This field has experienced significant growth in recent years, driven by the need for companies to reduce costs, improve efficiency and create value.

The Corporate Legal Operations Consortium (CLOC), founded in 2010, promotes excellence in legal operations and has contributed greatly to the consolidation of the term “Legal Operations” and its recognition as a professional field in its own right.

For us at Gericó Associates, after more than a decade strategically advising law firms, “Legal Operations” can be summarized by the following concept: “running the legal management as a business”, since legal management faces challenges similar to those of modern law firm management.

Latest trends in legal operations

From May 5-9, the annual CLOC meeting (CLOC Global Institute 2024 – CGI 2024) was held in Las Vegas, Nevada (USA), bringing together global legal operations professionals to share knowledge, identify recurring trends and generate valuable insights into the world of legal operations.

As a result of this year’s sessions, four key work fronts for legal managements stand out:

1. 1. LegalOps 3.0 – The Future of Legal Operations.
   2. Data is the new gold for legal management.
   3. Generative AI experimentation and adaptation
   4. Structure, talent and business partners

These trends are detailed below:

1. LegalOps 3.0: The Future of Legal Operations

In May 2024, the Corporate Legal Operations Consortium (CLOC) introduced an updated maturity model for Legal Operations, known as LegalOps 3.0.

This model emphasizes five key areas:

• A greater emphasis on digital transformation and automation to improve the efficiency and effectiveness of legal operations.
• A more proactive and strategic approach to legal risk management and regulatory compliance and compliance.
• Greater collaboration between the legal department and other areas of the company.
• Greater use of data analytics for informed decision making in legal management.

A commitment to diversity, equity and inclusion both in support of the firm and within legal management

2. Data: The new gold for legal management

CLOC emphasized the importance of leveraging data for legal management, being the “new gold”, according to its president Jenn McCarron. It allows general counsel to improve control of their operations, monitor performance with metrics and key performance indicators (KPIs) and increase the efficiency and effectiveness of the department, taking advantage of this information in the areas of litigation, disputes, legal research and contract review.

3. Experimentation and Adaptation of Generative AI

This edition of the conference highlighted the evolving discourse around early implementation of generative AI, particularly in Contract Lifecycle Management (CLM). Legal departments should experiment with generative AI cautiously and systematically, evaluating its potential on specific tasks before initiating large-scale transformations. By adopting this approach, legal departments can capitalize on the long-term benefits of generative AI without taking unnecessary risks.

4. Structure, talent and business partners

Legal departments must have the right structure, talent and business partners to achieve their operational excellence objectives. In addition to reviewing their processes, this involves developing internal talent, incorporating professionals from various disciplines and establishing strategic alliances with external providers.

Conclusion

Efficient Legal Operations are critical to the success of organizations in today’s environment. By introducing some of the best practices in legal management, corporate legal departments can optimize their operations, reduce costs, improve efficiency and create value for the business.

Juan Paulo Rodríguez

Partner at Gericó Associates