Wolters Kluwer recently partnered with the Association of Corporate Counsel to conduct a survey designed to assess the maturity of corporate legal departments (CLDs). The results have been published, and they reveal some fascinating facts about where CLDs stand with respect to their legal operations approach. I’ve highlighted some of the most interesting findings below, along with my take on what these results reveal and how they could be improved.
Large companies benefit from legal ops professionals even more than small ones.
There are substantial benefits to both small and large companies of having dedicated legal ops professionals. However, larger companies have more to gain in terms of legal ops maturity from hiring at least one legal ops staff member – and they have more to lose by not doing so. On average, large corporate law departments rated themselves about 10 points higher in overall legal operations maturity than their smaller peers, which represents a 25% increase. However, that benefit is not reflected unless they have at least one dedicated legal ops worker. In fact, large law departments without such a staff member actually rate themselves 42% less mature than smaller CLDs without dedicated legal ops.
For instance, mid-sized law departments of between 25 and 49 staff gained 13% in maturity points by having legal ops staff, a clear improvement. However, larger organizations saw a very impressive 139% improvement if they added legal ops staff. Given these huge potential gains, the 16% of large companies with no legal ops staff at all should prioritize this addition as soon as possible.
Experience and leadership help legal ops deliver greater benefits.
Adding legal ops helps some areas within the legal function more than others. Those that tend to benefit most are the areas where legal ops teams have enough experience to have established best practices and where legal operations workers tend to play a leadership role. For example, in terms of maturity point improvements, out of a possible 6 points:
- Financial management gains +1
- Technology management adds +1.01
- Strategic planning also increases +1.01
In other areas, legal operations is not associated with as large a benefit. The survey doesn’t tell us why, but my interpretation is these are areas where nobody quite knows what to do—including legal operations—or areas where legal operations tends to play a more tangential role. For instance, contract management, where legal ops adds only +0.3 to maturity, is often led by a separate function outside of the law department or has contract managers who do not consider themselves legal ops professionals. Because contract management often crosses departmental lines into procurement, sales, finance, and other areas of the company, it can be difficult for everyone to agree on processes, even with the help of full-time legal ops managers. Bringing these areas under the legal ops umbrella within the law department could yield improvements.
CLDs are more mature at managing outside counsel than they are at managing themselves.
On average, respondents rate themselves at 2.85 out of 6 on external resources management but only 2.53 on internal resources management. Part of the reason for this is because they struggle with two key disciplines, contract management and change management, which can make things difficult for them internally. However, there are solutions that can help.
When filtered for companies with over $10M in outside counsel spend, 70% of law departments without legal ops rated themselves at only 1 or 2 in change management — a large percentage rating themselves at a very low number. In companies with legal ops, that number drops to 43%, meaning that their situation is better but still less than ideal.
Change management is a significant piece of internal resource management because it is essential to getting high rates of technology adoption and ROI. Law departments can improve their effectiveness in this area by hiring legal ops professionals with the right background. They also have an opportunity to bring in external help. Legal departments should look for technology partners who not only offer best-in-class products but also couple those with heavy-duty expertise in change management.
More to come
The survey findings represent a rich data set to explore. In the coming weeks, I’ll have more to say about what the survey revealed, including thoughts about how we can view what we’ve learned from the survey in light of the COVID-19 pandemic. For more information in the near term, take a look at our summary infographic about the survey findings and download the full report. And if you’d like to explore more about making the business case for contract lifecycle management, download our whitepaper here.