A new breed of legal operations professional – GenO - take their rightful place at the Business Strategy Table
Just a few decades ago, a private practice lawyer in a law firm who decided to go “in-house” endured constant questioning about why they were taking a step back in their career. Was it because they were tired of the breakneck pace of a law firm? Were they OK making less money? Essentially, these lawyers were viewed as “stepping off the treadmill,” and getting “out of the game.” Not a complimentary description.
Today, the in-house lawyer as manifest in the General Counsel (GC) and their leadership team is undoubtedly one of the highest-impact executives in a company. It doesn’t matter if the company is highly regulated or not, the GC has a seat at the business strategy table. In addition, General Counsel are more frequently taking the helm of companies as CEO. As such, the trend of the GC becoming a “Generalist Counsel” (a businessperson who happens to be a lawyer) and continuing to be viewed as more than just the “top lawyer” continues.
What is propelling General Counsel to this stature? It’s partly their sound judgement and the ability to apply it to non-legal matters. It is also their ability to act as the voice of reason in the face of chaos, serving as an objective leader on an executive team and gaining the confidence of the board by demonstrating that good governance is not just words on a paper. Increasingly, it’s is also that the corporate legal department is not just a cost center but a critical enabler that reduces overall company risk, accelerates cycle times to get to revenue faster, and drives operational efficiency throughout the company. What on earth does this have to do with lawyering and how did the General Counsel get involved in this manner? The answer lies in Legal Operations.
Born out of Necessity
Legal Operations was initially a function in a legal department that was born from the need for three things:
- Knowledge Management (how to capture knowledge for re- purposing so the lawyers can go home to their families at night)
- Incorporating technology into the legal department
- Managing outside counsel spend
In its earliest days, Legal Operations as a function was called Legal Information Technology (IT). The role was something of a technocrat serving as a liaison between the Information Technology (IT) department and Legal. Sometimes this position was held by a lawyer, tired of practicing law and pursuing their passions for computers and technology.
In the early years of the new millennium, electronic discovery (eDiscovery) became a major expense line item. Law firms were having a field day billing their clients for something hardly anyone understood, and all the while legal struggled to both manage lawsuits and also to absorb the multi-million dollar invoices that discovery tasks racked up. Legal Operations was one of the few groups that understood enough about technology to help the General Counsel manage the chaos.
Maturation into a Profession
Legal Operations has evolved from a function into a profession in the past decade. The talented professionals performing these roles often manage the entire legal budget, sit on the legal leadership team, hold the purse-strings of all outside counsel, legal technology and legal services spend (@ $100 Billion per annum in the United States alone), and are frequently a trusted consigliore of the General Counsel. Furthermore, Legal Operations professionals initiate and lead programs that impact the entire corporation, not just the Legal Department.
These initiatives include contract management, information governance, data analytics, spend management, knowledge management, and eDiscovery. These programs and initiatives touch every part of the corporation and influence revenue, interact with sales and marketing processes, procurement, information technology, compliance, data privacy, and financial reporting. As such, legal operations are becoming a vehicle for the GC to become more than a legal leader.
Contract Management as an Example
One key area where the remit of legal operations and the legal department extends beyond the boundaries of legal business processes is in contract management. Contract management is an enterprise business process that historically has not had a well-defined administrative owner. Because of the heavy involvement of lawyers in the contracting process, legal departments tend to be key drivers of these enterprise-transforming initiatives.
Many of the business decisions behind the rationale for companies to invest in contract management have little to do with legal business process. Yes, it’s important to enable lawyers to practice more law. And yes, it’s also important to automate legal business processes so non-bespoke, routine work can be automated and outsourced rather than performed by over-qualified lawyers.
More often, however, the business drivers tend to be such things as accelerating the cycle time for revenue contracts so revenue can be recognized sooner or ensuring that indirect procurement purchases are expedited to enable the supply chain to function more fluidly. These are non-legal business drivers that contribute to revenue maximization, enhancing shareholder value, and lowering enterprise risk along with creating cost efficiency. If the legal operations’ function, and therefore the general counsel, is associated with these business drivers, by definition, legal ops is taking its rightful place at the business strategy table.
I call this GenO: Generation Operations, and I believe 2023 will the year when GenO takes hold across corporations.
Prashant Dubey, Agiloft’s Chief Strategy Officer and Research Chair, recently launched a new Podinar Series, Contract Insights, which features thought leaders from the front lines of Legal, Sales, and Procurement. If you would like to take part in the upcoming GenO Series of Contract Insights, which will dive into the most relevant challenges, opportunities, and success stories happening across the legal operations space, drop us a line at GenO@agiloft.com.