NEW YORK — In an effort to define the increasingly visible role of the legal operations professional and discuss the explosive growth of their organization, two founders of the Corporate Legal Operations Consortium (CLOC) led a panel, entitled CLOC: The Potential Game Changer in the Evolution of the Legal Service at the recent 22nd Annual Law Firm Leaders Forum.
Jeff Franke, Chief of Staff to the General Counsel & Senior Director of Global Legal Operations for Yahoo, started by invoking an earlier comment: “The legal profession is no longer a guild, it is now a business,” he asserted, which in essence has transformed in-house legal department operations professionals into the new general contractors. “Part of the way that we’re telling law firms what we want is through our spend — our money is talking and it’s talking loudly, and it’s up to the law firms to listen.”
Franke recited the three main “asks” of these empowered buyers: i) lower prices in general, but not necessarily across the board; ii) better access to options regarding pricing; and iii) efficient firms that keep pace with their clients and increasingly efficient in-house operations.
Connie Brenton, Chief of Staff & Director of Legal Operations at NetApp Inc., underscored that the legal operations role is a relatively new one, and noted that a decade of experience is practically a veteran status. Defined as a multi-disciplinary function, legal operations entails 12 core competencies, including strategic alignment, knowledge management, data analytics, vendor management and more.
As further insight into the role, Franke and Brenton crafted a hypothetical profile of a Legal Chief Operations Officer as an individual comprised of one-third JDs; one-third JD/MBAs; with the remaining one-third as hailing from a finance or IT background. Regardless of one’s specific title, everyone in legal ops is tasked with continuous change management, driving innovation and technology, and finding ways to connect to the larger legal ecosystem.
The Rise of Legal Operations
Legal operations have arisen in tandem with the increasing prominence of the general counsel role, the panel said. In contrast to the GC office of 40 years ago, which existed primarily to manage risk, general counsel are now rapidly evolving into trusted advisors to the CEO and the board of directors. And all really important decisions within an organization now require some form of legal input, Franke pointed out.
Just as the role of in-house counsel has gained visibility within the organization as a whole, and law firm prices have continued to rise, it’s perhaps no surprise that CEOs and CFOs have looked to impose greater financial management. As GCs continue to assume bigger functions within an organization, Franke posited that legal operations will take more ownership of legal service delivery, especially the work that is considered commodity services.
Legal operations, he said, will be about figuring out who will deliver the services: whether lawyers in-house, outside counsel, legal service outsourcers (LSOs), staffing agencies or technologies.
“Legal operations is about running a legal organization like a business,” Brenton said. “We’ve taken that function away from the general counsel.” However, that may not be too much of an issue — GCs didn’t really love that aspect of their jobs, and simply didn’t have the time to do it any longer, she added.
She also commented that an unintended consequence of the legal operations role is a greater ability to “speak the language” of one’s business counterparts. “Innovation and legal used to be an oxymoron,” she wryly observed, adding that the legal function is now being approached for what it can teach other business units and corporate functions. Both Brenton and Franke provided examples of improved processes that were developed in-house by own their legal ops teams and ultimately adopted by the larger organization.
“Our job at the end of the day is to help our corporations deliver the services to our internal clients as efficiently as possible,” Franke said.
CLOC and Its Community
All of this transition in legal departments around operations and the growing emphasis on legal operation professionals has placed CLOC squarely in the spotlight, despite its relatively new status.
CLOC is a trade association that was founded about 20 months ago, but is rooted in an informal gathering of about 40 people that have met regularly for the past seven years in the Bay area. Its membership has since spiked to 1,000 individuals across 500 member companies in 20 countries and 40 states. It’s estimated that CLOC members represent about $35 billion in external legal spend.
Brenton said CLOC members are encouraged to try new things, and because the field is so new, no one is yet in a position of having fallen behind.
And because change management is a key driver of the role, she said legal ops professionals “have to just be tough, and every day you have to slog forward.” Of course, that’s a mindset and behavior that Brenton says defines the fervor of the CLOC community. “It has a different look and feel than the associations we are accustomed to participating in, especially in the legal environment.”
Click here to access Franke & Brenton’s slide presentation on CLOC at Law Firm Leaders Forum.