Legal Department Operations: The Key to Better Partnerships Between In-House Legal Departments and Outside Counsel

The prevalence and role of legal department operations have both expanded exponentially in recent years. While in-house legal departments once operated almost exclusively as silos within corporations, today these departments are undergoing a significant transformation in the face of expectations that they help drive their organizations’ value.

Legal operations is at the center of this transition, helping in-house departments implement the right processes, activities and staffing expansion to help grow their companies through effectively providing legal services.

“Organizations like the Corporate Legal Operations Consortium or the Association of Corporate Counsel had only had a few hundred legal operations members five years ago. Today, they count thousands of members among their ranks,” said Christine Juhasz (C.J.), head of legal operations for Massachusetts Mutual Life Insurance. “There’s no question that legal operations professionals are connecting more as a community and, as a result, growing their skills and driving the legal operations conversation in new directions.”

That sophistication is paying off. More and more these days, law firms are actively aligning with law department legal operations to become better partners with the companies they serve. This offers many opportunities to deepen relationships between legal and business professionals, including law firm marketing and business development professionals.

In an effort to explore and foster deeper relationships with corporate legal clients, the Legal Marketing Association invited a panel of legal operations leaders to speak at its annual conference on October 22 which included C.J., Catherine Alman MacDonagh, J.D., CEO and founder of Legal Lean Sigma Institute LLC; Kate Villanueva, partner at Faegre Drinker Biddle & Reath LLP; and Rhonda Oliver, account manager for Onit. The session, titled “How to Think Like a Legal Ops Professional,” shed light on how legal operations leaders think about engaging outside counsel.

“Legal marketers are challenged,” commented MacDonagh. “They’re the first to go through an RFP or tender papers carefully. They’re painfully aware that clients want factual information and data.”

An Innovative Approach for Stronger Legal Department Operations Partnerships

Legal department operations plays a large role in helping corporate legal departments understand processes, metrics and more. Though the struggle for law firms has historically been that they serve many clients at once, each has its own processes and ways of looking at things. By collaborating with legal operations, these firms can now map out processes for a given client much more quickly and efficiently than they could in the past, making it easier to manage several clients at the same time.

C.J. collaborated with the Legal Lean Sigma Institute to introduce Lean and Six Sigma process efficiencies into outside counsel relationships. The learning and practice of Lean principles evolved into a pilot project and then a mutually successful long-term relationship with Faegre Drinker Biddle & Reath. Part of the approach included a hybrid alternative fee arrangement that combined fixed fees and hourly components.

“Most law firms don’t even know that Lean Sigma is so valuable,” explained C.J. “We got in a room and memorialized processes. It was a long-term bet on Faegre Drinker Biddle & Reath’s part, and it paid dividends for them. When the firm wants to discuss rates, there’s no debate. MassMutual saves more than 12% per matter each year under the arrangement, and the firm is locking in the business.”

As MacDonagh pointed out, “There’s increased pressure on corporate legal departments. They’re being measured and looking at net promoter scores internally. They need to be ever more efficient, and that trend will only continue. A collaborative approach to improving processes like this gives a law firm competitive advantages. If you’re a legal marketer or in business development, you’re uniquely positioned to help your firm emerge from this pandemic in an even better position. You should be approaching your clients with ideas like these and not waiting to be asked.”

The result of the Legal Lean Sigma approach was a powerful partnership between MassMutual and Faegre Drinker Biddle & Reath that never would even have been attempted five years ago. It also earned MassMutual a 2019 ACC Value Champion award and serves as a model for firms looking to better partner with the in-house departments they serve.

Technology and Transformation

Technology has also been at the forefront of transformations like these. Systems such as platforms and enterprise legal management enable legal department operations to capture, manage and report on valuable data.

“In the overall scheme of legal operations in achieving its objectives with less, technology has increasingly played a prominent role. Driving efficiencies and controlling costs in the legal department are being borne, to a significant degree, by well-chosen technology,” said Oliver.

Legal Department Operations Resources

Legal operations is critical to building solid partnerships with law firms in today’s legal market. Here are additional resources from the presenters for those who wish to learn more about legal operations management:

• White paper: What is Legal Operations?
• White Paper: Doing More with Less: How Technology is Optimizing Legal Operations
• Legal Workout® and case studies from the Legal Lean Sigma Institute
• Legal Marketing Association