Last month, the Association of Corporate Counsel launched a new membership section called ACC Legal Operations. The purpose is to “support the growing number of legal operations professionals advancing law department management in sophisticated (emphasis added) legal departments.” (Hint: If you don’t yet have a shiny new legal ops director, better pick one up.)
Clearly, as ACC’s 2015 Chief Legal Officers Survey shows, size matters when it comes to the use of legal operations professionals. Some 35 percent-40 percent of bigger law departments (>50 lawyers) delegate operational management responsibilities to ops pros. In smaller departments, the number, not surprisingly, plummets.
According to Rees Morrison, a longtime consultant to general counsel on management issues and the founder of GC Metrics, which provides benchmark data on staffing and spending across hundreds of corporate law departments, the ACC’s section is hardly the first effort to bring together in-house operations professionals. The Association of Legal Administrators has long had forums for corporate and government legal ops professionals. The corporate group will hold an idea exchange at the ALA’s Annual Conference and Expo in Nashville, and the group’s listserv counts about 70 members, an ALA spokesperson says. The government group appears to be moribund, but ALA is planning to revitalize it at some point in the not-too-distant future.
Then there is the Institute for Law Department Excellence, a two-year-old group based in Chicago. (Morrison mentioned that he plans to hand his LinkedIn group over to ILDE.) ILDE’s president is Jeffrey D. Paquin, who has embarked on a vigorous effort to raise the group’s game.
Paquin, former chief litigation counsel at UPS and chief operations counsel at Abbott Laboratories, recently announced a star-studded regional board of governors that will lead ILDE’s pursuit of an ambitious array of goals, including creation of an online collaboration forum, working with a university to create a training program for attaining a legal ops certificate, planning an annual conference focused on law department innovation, and developing performance standards for law departments. Among the members of his board are David Cambria of Archer Daniels Midland, Lisa Brown of Starbucks and Charlotte Riser of Hess Corp.
Paquin, who will serve as chair (in his spare time after teaching law department management at Pepperdine University School of Law, serving as a vice president at Bridgeway Software, and directing the Chief Litigation Counsel Association and the Legal Futurists Society), says his goal was to have a strong and geographically diverse board.
“[T]here are generalists who have a broad array of responsibility. They know about everything when it comes to running a legal department,” he recently told the Chicago Law Bulletin. “Then there are specialists. These are people who might work in one area, like IP operations, e-discovery or spend management.” Paquin has included both types on the ILDE board.
The ACC group will feature member-led regional groups working with existing ACC groups, along with interest groups addressing areas such as process management, technology and tools, litigation support and e-discovery and strategic planning. Like ILDE, ACC will host an annual conference, the ACC Legal Operations Conference, which will launch on June 3-4 in Chicago.
According to Veta T. Richardson, president and CEO of ACC, legal operations can play a key role in assuring the success of corporate law departments. “In today’s corporate environment, driving value is a top priority, and legal operations professionals are at the forefront of leading these initiatives to run the law department more efficiently and effectively,” Richardson says.
The recent action surrounding these two groups is a strong indicator that legal operations professionals are moving to the fore. According to Morrison, when he surveyed ops administrators some years back, he found that most of their time was spent on budgeting and financial reporting, with the balance devoted to personnel matters and technology. According to the 7th Annual Law Department Operations Survey, released earlier this year by Inside Counsel and the Blickstein Group, in cooperation with Huron Legal, in-house operations roles definitely are evolving – though maybe not as rapidly as some might hope.
“As the 2014 survey clearly shows, managing data and cybersecurity – particularly once companies send their highly sensitive, confidential data to law firms – remains a growing concern,” says David Cambria, the Archer Daniels director of global operations recently named to the LCDE board. Cambria, who notes that LDO directors also are still grappling with more mundane matters such as hourly billing rates and AFAs, is quick to point out the progress in the role since the days when LDO directors worried over budgets, e-discovery and earning the respect of their organizations. “While these items remain a key component and focus for the LDO function,” he says, “this shift in focus and priorities represents yet another pivot point in the ever-evolving role of law department operations.”
Brad Blickstein, principal with the Blickstein Group and publisher of the survey, worries that LDO professionals may, to some extent, be victims of their own success and the success of the economy. “In a lot of companies, the role seems to have moved ‘downstream,’” he says. “As we get further from the recession, LDO managers seem to again be having trouble getting their concerns heard.”
It seems clear, however, that these roles will only grow in importance, given the seismic shifts taking place in the market. As the most recent edition of Altman Weil’s annual Chief Legal Officer Survey shows, CLOs remain skeptical of outside firms’ ability to drive change. For six years running, when asked how much pressure corporations are putting on their outside firms to change the value proposition in legal service delivery (and not by simply cutting costs), the median response hovers between five and six on a zero-to-10 scale (low to high). Yet when asked how serious firms are about changing their delivery model to provide greater value, the result for six years running has been a median of three.
Talk about ships passing in the night.
Indeed, many CLOs, with the support of their operations professionals, have more or less thrown up their hands. When asked who will lead change over the next 10 years, more than 40 percent say it will be their departments, almost 20 percent think technology will move things forward, and 18 percent see non-law-firm service providers taking the lead.
What about law firms? A mere 6 percent of CLOs believe they will be driving the change bus in the years ahead.
It’s not surprising, therefore, that corporate law departments continue to pull more and more work inside. And that may account for the important role legal project management is playing in their operations. ”Next to a cost-effective e-discovery program, legal project management has the greatest return on investment of time and resources,” says Aaron Van Nice, director, operations, law department at Baxter International.
Which brings us back to ACC and LCDE. It seems clear that ACC’s decision to open up a new member section for legal ops professionals and the moves by Jeffrey Paquin at LCDE to ratchet up his organization are hardly coincidental. When it comes to legal operations, it’s game on!
Published April 16, 2015.