Bloomberg Law
March 8, 2023, 9:00 AM

Law Departments Can Still Beef Up Legal Operations in a Downturn

Jessica Smith
Jessica Smith
Deloitte Tax
Steven Walker
Steven Walker
Deloitte Tax

Amid tech layoffs and speculation of a looming recession, the general consensus from industry surveys and social media wisdom is that law department budgets are constricting, travel has dried up, hiring has frozen, and legal operations roles may be under threat.

Legal ops can seem an appealing target when evaluating where to save in law department budgets. If in-house law departments are considered overhead, because they don’t directly generate revenue for core business, legal ops risks the perception of being another overhead layer on top of that—typically an unsafe place to be in any company.

Unlike attorneys and legal professionals—who are visible to business clients while working on contracts, disputes, and generally supporting business needs—legal ops professionals work behind the scenes on the critical, but frequently unnoticed, operational scaffolding that enables the work of legal professionals.

This analysis overlooks two important functions that legal operations plays for a law department.

Legal ops is the only group in a law department whose exclusive focus is to work “on” the business of being a law department rather than working “in” it, assisting with strategic direction, maintaining operational health, and helping legal professionals focus on the tasks requiring legal expertise, instead of process and administration.

Second, legal ops falls into the invest-to-save category. One of the core missions of legal ops is to deliver more value for less, and drive efficiency, effectiveness, and productivity of law departments.

By cutting this layer or removing it altogether, there’s a real risk that, legal professionals will return to traditional ways of working—just as we all did before legal ops came along.

Against this backdrop, here are our top reasons why chief legal officers may want to think carefully before wielding the scalpel too deeply around legal operations.

Work Smart

We learned over many years that capacity in law departments doesn’t magically appear. Rather, it requires deliberate investments in process re-engineering, content and governance simplification, use of technology, and systems and data, aided by multi-disciplinary skills such as project management, lean processes, and change management.

Part of the solution to the more-for-less challenge is taking control of inbound work and reallocating support requests—from where they happen to land, to the resources best placed to handle them based on a thoughtful service delivery design.

Core legal ops initiatives such as right-sourcing and progressive workflow automation are increasingly eliminating manual work, empowering internal clients with self-service tools, liberating lawyer capacity, and scaling legal service delivery, while reducing the need for new headcount and streamlining the overall cost of delivering legal services.

Put Data to Work

In times of high demand for fewer resources, it’s even more vital to deploy assets wisely while being prepared to dynamically reallocate them in response to changing priorities.

It’s difficult for chief legal officers to do this effectively and in a timely way without management intelligence systems that capture defined metrics that highlight decision points, such as current workload and matter types, resource hot spots, risks, current external engagements, and myriad other management information.

Responsibility for running these systems, curating data, and generating accurate reporting and insight is the domain of legal ops. Without that function, law departments will be hampered in efforts to generate the insights needed. And over time, prior investments in technology tooling are likely to be compromised as data hygiene problems take hold.

Manage External Spending

Law firm spending remains the largest line item for most law departments. Legal ops brings multi-disciplinary skills and focus needed for proactive spend management that attorneys typically either don’t possess, or which they don’t have adequate time to use.

They include sophisticated spend analytics, procurement models, project management and pricing negotiation, as well as automated cost containment functions in e-billing, legal invoice review, and “should be” cost modeling. These techniques can drive significant spend reductions when used effectively.

During unfavorable economic times, legal ops can be viewed as part of the solution, rather than part of the problem.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jessica McGarity Smith is a senior manager in the legal business services practice at Deloitte Tax, where she focuses on legal operations and technology consulting.

Steven Walker is a managing director in the legal business services practice at Deloitte Tax, focused on legal management consulting and legal operations.

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