This is the first of two blog posts on how the legal operations function is driving department performance by heeding the calls for efficiency, value, and insight. This post focuses on improving efficiency and increasing value.
As a legal department leader, you need a keen focus on cost control and the company’s bottom line to drive a competitive advantage. Legal operations professionals play a critical role in shaping in-house practice and are increasingly charged with introducing efficiencies, controlling costs, and scoping out the best way to perform legal services in alignment with company priorities. To manage effectively, many are responding to a call for improvement focused on three areas to drive change: efficiency, value and insight.
The Call for Efficiency
Efficiency is cited by law departments as a top focus area for cost control because of the financial benefits inherent in streamlining workflows and saving time. Here are a few common examples of how you can improve your legal department’s efficiency:
- Enforce best practices via business process management tools, such as automated workflows and tracking of legal service requests
- Optimize in-house staff use by outsourcing certain legal work, such as bill review and e-discovery
- Leverage detailed metrics that highlight opportunities for improvement
The industry-wide call for efficiency has prompted legal departments to minimize wasted time and money while increasing productivity. For many legal departments, the logical first step is the lowest-cost one: analyzing department processes and workflows that are ripe for automation or streamlining. For example, fully utilizing e-billing means automating the review and approval process, ensuring that rules-based components are in place to check and validate invoices, catch billing errors, and identify and reject noncompliant rates and fees.
For some organizations, it may be even more efficient to engage an external bill review service, especially if the provider utilizes advanced technology, such as a machine learning, along with human expert review in its process to identify all potential noncompliant activities.
The Call for Value
In response to the increased expectations of senior management, legal departments around the world are transitioning from a traditional cost center model to driving value, a change that requires a new way of looking at legal operations. Instead of sending matters to outside counsel by default, many legal departments now give more thought to the best approach for each matter. Work is now more likely to be done in-house, sent to fewer trusted law firms, or assigned to alternative service providers. Metrics and scorecards that track internal and outside counsel performance can support decisions about assignment, staffing levels, and attorney selection. And if you decide to use outside counsel, benchmarking data can help you negotiate the most appropriate rates.
In addition, firms should know that you expect high-value work and should take actions such as:
- Financial management. The most proactive law firms initiate discussions about pricing, develop realistic matter budgets, and manage them well.
- Project management. Legal project management can improve service delivery and facilitate good planning, communication, and collaboration between teams.
- Staffing models. Law firms should proactively suggest alternative service providers who can meet client demand in a cost-effective way.
- Business alignment. Firms need to demonstrate knowledge and understanding of a client’s business and align with the organization’s core values.
In my next post, I will describe how legal operations experts are responding to the call for insight and I’ll cover how to get started on these efforts. Our whitepaper, The Call for Innovation in the Law Department, provides an in-depth look at how you can improve efficiency, value, and insight to drive better legal operations performance.