The realities of legal operations - in-house and in private practice

Legal operations is a relatively new field in the in-house legal game, yet as McKinsey notes, it has undergone a significant transformation in the last decade. Corporate legal departments are increasingly pooling resources into the field, universities are beginning to teach legal ops, and management courses and law firms are always looking for ways to cut costs and improve operations.  

Something not often focused on when discussing legal ops is the opportunity it presents for individuals. Essentially a whole new legal career has been born - one that integrates technology, data, and optimization - opening the playing field to non-traditional legal minds.

In essence, legal ops is a set of business processes and activities enabled by professionals and technology to enhance the performance of legal teams. Corporate Legal Operations Consortium (CLOC) states that "legal ops provides the strategic planning, financial management, project management, and technology expertise that enables legal professionals to focus on providing legal advice".

Jason Xu, Legal Operations consultant at MinterEllison, has worked in the in-house and private practice legal operations worlds, and shares with us the similarities and differences he has noted with how things are done in both camps.

A major similarity between the two is the client. Legal ops professionals, both in-house and in private practice, work for the same end client - the business or the firm. What's different is how they can serve their needs.

"In-house, the legal ops function and legal optimization are concentrated within a small team of people, whereas in private practice there are multiple teams within the legal ops function," says Xu. For example, specific teams focus on matter workflow optimization, document creation, process maps and workflows, legal tech, and consulting with stakeholders.

Multiple teams working on specific aspects of legal operations can make for a more comprehensive approach. It comes down to numbers - having more dedicated legal ops resources allows for delving deep. At MinterEllison there are more than 20 people working in the field of legal ops in an array of roles, including legal ops consultants, tech specialists, and analysts. Xu notes that with scale comes bureaucracy, and legal ops professionals do not have the same autonomy they have in-house.

Xu says there is a flip side. "In-house, there's not a lot of bureaucracy and red tape so you can just go ahead and do things." He believes there is more control and direct lines of communication with business stakeholders which allows for more frequent refining of processes and optimization. "It is easier to see the tangible value you add to the business."

Private practice often employs legal-tech specialists who commonly don't have legal training but excel at tech and optimization. Xu acts as a conduit between these professionals and the lawyers. He finds the balance between lawyers' needs and tech's potential and what can feasibly be implemented.

"There are many risks involved with tech in the private practice world. The risk that the tech goes wrong, the risk that the paralegals using it don't get sufficient training. Or it doesn't fit the purpose of the legal project at hand. The ultimate risk is delaying a project, losing a client, or wasting money."

It's of no surprise that communicating risk, realistic timelines, and the consequences of legal tech with Partners takes up a significant portion of Xu's time. The root of private practice's inherent 'risk' problem with legal tech comes down to the tech itself.

"There is no integrated legal ops workspace like in-house products for private practice," says Xu. As such, firms are using an array of legacy and new tech products for niche areas of their legal work.

Xu believes integrated workspaces are an area where in-house is ahead of the game. Legal tech is more mature and developed with one central client in mind - the business. Not having to deal with multiple-point solutions saves time and allows for a more holistic use of data and insights across the company.

When asked if private practice would welcome a suitable centralized product for its needs, Xu laughs. "It's already hard trying to convince an in-house team to adopt one platform. Imagine trying to convince 30 in-house teams under one firm to adopt one platform. That will be a lot of stakeholder management."

He makes a pertinent point. Across private practice it is common to see Partners running their team as their own practice, with unique workflow arrangements.

Across the private practice industry, there is a tendency for firms to jump at any opportunity to enhance efficiency and cut costs. In Xu's opinion, there are instances when doing things manually is still the best way as the maturity of legal tech for private practice is still developing.

Xu believes that whether you are in-house or in private practice, legal operations professionals can add significant value.