The New GC Toolkit in association with Reed Smith | Autumn 2018
For general counsel struggling to manage the administrative and regulatory burdens of the role, a head of operations has become the must-have accessory. In the US, the growth of legal ops is demonstrated by statistics. A recent Association of Corporate Counsel survey suggests that nearly half of all GCs in the US have appointed a legal ops professional to drive transformation, while the Corporate Legal Operations Consortium (CLOC) is targeting a membership of 50% of the Fortune 500 by mid-2019. Our global survey shows these numbers are less representative of trends outside the US, but only slightly. Just under a third (30%) of GCs globally currently have a head of legal operations, while a further 13% are looking to recruit one in the near future.
Aine Lyons was one of the first to take on a truly global legal ops role when, in 2010, she became head of worldwide legal operations at cloud infrastructure provider VMware. She continues to act as VMware’s global head of legal ops in addition to serving as chief of staff to GC Amy Fliegelman Olli. In November 2015 she became part of CLOC’s global leadership team and now leads its European chapter.
‘Chief executives are increasingly focusing on operational efficiencies within the legal department and the chief of staff role is becoming far more common, particularly in larger legal teams, but we should not let this growing interest cause us to lose sight of the purpose of legal ops,’ she says. ‘There is a lot of talk about people, process and technology – I clung to that mantra for a long time too – but the most important thing is having a mentality of wanting to change the department. You can license all the best tools and re-engineer your processes, but if people don’t want to go on the journey, the likelihood of transforming your legal department into something more innovative is slim to none.’
Legal ops may be flavour of the month, but there is a danger it will become a substitute for substantive change, says Jack Diggle, head of Elevate’s global legal consulting practice: ‘There have been some great initiatives here, but appointing a head of legal ops should not be mistaken for the end itself. If you don’t empower that person to make real change, they are just an administrator and will only maintain current systems, not change them.’
On this point he has the sympathy of the ops community. ‘To have a true legal ops role, it needs to report in to the global GC,’ says Lyons. ‘We are acutely aware that this may limit its applicability to companies based outside the US, where the global GC role is far less common. Even so, there are a lot of people out there doing hybrid roles, combining their day job with operations.’
Just as important, says Novartis chief legal innovation officer Maurus Schreyvogel, is the willingness of GCs to simply let go. ‘As with any job, you need the best person for the role. Sometimes the GC is not the best person. A GC might know they need to bring in tech but not know anything about that technology. If they don’t step aside and let somebody else in the organisation take the project on, then it is not going to move forward. We all know of cases where people have bought tech and it hasn’t worked because they haven’t had the right person running the project and haven’t invested in training staff to use the technology. They complain afterwards, but it’s kind of their fault.’
Casey Flaherty, founder of legal technology consultancy Procertas, is more pointed: ‘GCs are given licence to spend obscene sums of money on getting legal advice but will often have to jump through hoops to make an investment in technology. Besides which, if they are successful in reducing their legal spend with tech, they will likely see next year’s budget shrink, which is something no GC wants to deal with.’
Securing the investment for legal technology was clearly a challenge for those we surveyed. While many GCs (42%) said the ability to find additional investment for technology would depend on the specific project or piece of software they wanted, an equal number said it would be quite hard or very hard to secure investment (25% and 17% respectively).
When it comes to financing new tech, PGIM Real Estate’s head of legal for Germany, Matthias Meckert, thinks enterprise-wide systems will always serve as a barrier. ‘As a legal department, you cannot just say: “We want to run our own show in respect of IT.” No company will change its systems for the legal team, although a lot of legal technology vendors do not seem to understand this. We can investigate all their offerings, but if you build outside the enterprise framework, you will eventually have to put the bolts on and make sure it is interoperable with the software in place across the organisation.’
DXC Technology’s Bill Deckelman agrees: ‘Real technology-driven transformation takes a lot of hard work. You have to understand your processes and take them apart before you can figure out what kind of tech will help you automate or change the ways you do things. That inherent difficulty is often compounded by the struggle to get approval for new systems or technology. Generally speaking, the legal functions of big companies are way down on the list when it comes to prioritising investment to develop technology.’
But, says Lyons, GCs can push harder: ‘A lot of the time legal wants to stay in the background, but now is the time to come to the fore. In legal we have introduced new tech that the business has taken on and we are not alone. My advice to GCs would be speak to others who have been instrumental in getting the business to use tools and technology across the organisation, and use them as case studies internally to change how people think about new systems. It doesn’t have to be top-down or driven at an enterprise level – most of the really successful applications of technology will be driven out of a specific function.’
More generally, the GCs polled showed a surprising degree of confidence when it came to technology. While only 20% felt their legal team was using technology very effectively to improve the quality of internal legal service delivery, the bulk (70%) felt that technology was being used somewhat effectively. Further, although only 15% of those surveyed had extensive experience in undertaking legal technology projects, 90% of GCs felt either quite or very confident that they would be able to implement a major technology project in addition to managing their general workload.
From legal ops to technology and process redesign, GCs like to describe the evolution of their function as ‘a journey’. But a journey to where?
‘The end state of all of this is a world where GCs manage the board while a head of legal ops or a chief operations officer manages the function,’ says Mo Ajaz, group head of legal operational excellence for National Grid. ‘GCs don’t really need to manage the legal spend, the relationships with firms or the technology that gets used in-house. Some will love delegating that type of stuff because it frees them up to work more closely with the board, others will hate it, but it will be the way most large functions are run.’
Of course, no single approach will work for all teams, and GCs who seek to import processes or technologies that worked for others will likely do more harm than good. However, says Lyons, the journey GCs now find themselves on is the beginning of a lasting transformation. ‘In-house functions have grown significantly but we need to realise trends do not continue forever. If I were a junior GC or even a young lawyer considering a career in-house, I would start to educate myself and open my mind to a new way of looking at legal services. Read case studies, speak to others, and think as much as possible about how the legal function can drive enterprise projects and have an impact beyond addressing legal questions. That is the destination we are almost certainly heading to.’