Four factors drive law departments to hire legal operations professionals and management: resource management and organization including staffing, budgets, facilities and technology; increasing demand for legal and advisory services; more innovative and effective management of external counsel; and the insatiable appetite to demonstrate measurable value of the law department to the company. The article profiles 5 Directors of Legal Operations suggesting that law departments with more than 10 lawyers should have one on board.

The business case to expand a legal department begins with a detailed forecast of the future demand for legal services. It is often a pre-requisite to change operating practices with internal clients and within the department to ensure a measurable improvement in the productivity. That improvement can allow counsel to eliminate backlogs and to take on more strategic, developmental and advisory work. Finally, the financial aspects of the business case to add a lawyer should demonstrate that net savings if insourcing would be at least 50% of law firm fees and would pay for a new position.

The 5 stages of relationships between law departments and law firms, described in Heineman’s “Inside Counsel Revolution”, are summarized in the article. Very few companies have moved beyond panels of preferred law firms to a strategic integration with one or two primary firms. The article concludes that making longer term commitments to a handful of firms is a pre-requisite to non-hourly fees for portfolios of work and to significant innovation in legal service delivery that will change the behaviours of inside counsel and their primary firms.

Planning and teamwork are essential to appropriate task delegation in legal work. Both law firms and law departments under-delegate and fail to rigorously oversee the use of experienced legal counsel.
Law departments face particular challenges moving away from solo practice models when have no entry-level lawyers available on the team. Team-based lawyering and tougher intake protocols are essential.

Legal and corporate priorities are a frequent distraction for General Counsel trying to change the practice management and work allocation patterns of the legal department. Four management skills are essential to meaningful change in how legal resources are managed: a focus on results rather than process; a commitment to innovation with external counsel; a strategic business sense; and the efficient use of time for administrative matters.