Optimising legal services delivery – Legal Operations and the business of law

As 2018 began to wind down and at F-LEX we looked ahead to the Corporate Legal Operations Consortium (CLOC) London Institute in January 2019, F-LEX co-founder and CEO, Mary Bonsor, met Sarah Barrett-Vane, Legal Operations specialist and Consultant from SBV Consulting to discuss all things Legal Operations, how the legal market is changing and what lawyers of the future can do to ensure they move with the change.

Sarah is a qualified solicitor, practicing until her mid-thirties, both in private practice, then in-house before moving away from being a lawyer and into legal procurement and contract management.  

Whilst working at the Legal Aid Agency, Sarah received a call from what was then another government owned entity, Royal Mail, to see if she could share her experience on legal procurement with them. “I went for what I thought was just interview experience, but ended up landing a job!” She spent the next 2.5 years introducing several new initiatives, getting to grips with legal spend and managing Royal Mail’s (at that time, combined with the Post Office) first legal panel review in 2010.  Then in 2012, as she thought the time to move on had arrived, a new General Counsel, Neil Harnby, who had been hired to take the company into privatisation, encouraged her to stay and move from Group Procurement to Group Legal.

“He literally gave me a piece of paper and said, ‘what would you do if you could move into the legal team?’  It was great - he was very forward thinking. This was 2012, and in London at that time you didn’t really have legal operations people.  So, I wrote down a list of what I’d do, and called it Group Legal Operations Director.”

What is Legal Operations?

“I think the easiest way to describe it is to say that the legal team now needs to be run as a business,” says Sarah. “The GC is in charge of the legal affairs of the company, which is obviously an enormous task.  But involved in that are all the operational aspects of being in charge of the legal affairs of the company. From running your internal team (and internal budget) to your external team (and external budget) and that’s all what you would call ‘operations’.”

For centuries, manufacturing and technology industries have focused on the operational aspects of their businesses to ensure efficiency, productivity and profitability, but that hasn’t been the case (until recently) in Professional Services. As corporations have changed and in-house legal teams have moved closer to the business, General Counsel increasingly need to run their legal teams as business units, with data to back-up their business cases. “Legal operations is all about, how do you prove that the legal team is being run as a business, efficiently and effectively, with budget in mind.”

CLOC, Sarah explains, has usefully segmented Legal Operations functions into useful specialisms, which offer additional guidance to legal teams.

Once in the Legal Operations role, Sarah explains that the changes she implemented under Neil Harnby were wide-ranging and developed as the function matured.

“We started with the basics and moved on to the more advanced stuff, which is what you should do really - take the easy steps incrementally, until you introduce technology”. 

Some of even the most basic insights weren’t available at the beginning.  “When I joined [Group Legal] in 2012, we realised we didn’t really know what we were spending and why. Even when I was in Procurement, I knew we’d spent roughly £X, but I didn’t really know what on - that’s not a great place to be really.”

The first thing Sarah did was to introduce basic process improvements around spend management. Secondly she looked at everything the team did, both internally and externally.  Both pre and post privatisation, the GC was looking at what team changes were required for the Royal Mail of the future, and this meant re-thinking the external supply base as well as changes to the internal team.  Working under Neil and, by then, Deputy GC Maaike de Bie, Sarah ran a full-scale legal panel review in 2014, increasing the number of firms, from across the spectrum, which would answer the requirements of a privatised Royal Mail. 

“We continued to make process improvements, all the time”, explains Sarah. “Aligned with appointing a new panel, you do everything around panel management, relationship meetings, billing rules, invoice templates; basically, rules around how you want the panel to be, so then it becomes a contractual relationship that needs to be managed effectively.”

Once a legal team’s ‘house is in order’, comes the tech, explains Sarah, though it’s not always easy to make the case for legal tech.  “Legal tech is never seen as the priority, compared to, you know, shop floor tech - stuff that actually keeps the company going.”  But in 2015, Sarah got permission to introduce an e-billing system, which was revolutionary for the team as it gave them all the necessary data on spend. “You can’t do a lot without that data, and unless it’s accurate, then you’re just working off flawed data. Data plus sensible analysis equals better decision-making.”

But she wasn’t quite done yet. In her last six months at Royal Mail, Sarah introduced document automation, designed to redistribute work amongst the team to where it would be done most efficiently. “It’s all about empowerment and saving time”, says Sarah. She also arranged for all the paralegals to be trained so that they could become contract automators, if they wanted to. “I think it’s really important that members of staff inclined towards technology get the opportunity to get into it, if they want to, because in many ways, it is the future.”

Panel reviews are a big task for any in-house team and the outcomes potentially have a bearing on what other legal operations work a function plans to undertake. “How often would you say you should review your panel, or keep an eye on it?”, Mary asks.

“Historically you would say that you should do a three year term”, says Sarah. “Then it changed to 3 + 1, or 3 + 1 + 1, where you could extend the agreement.  I’m now edging towards a 4 + 1 + 1, because I’m more now into creating more strategic and collaborative relationships with law firms.”

Long term strategic relationships, she explains, in which in-house teams and law firms develop products, new ways of working and tech together need to be given enough time to be mutually beneficial. “It’s quite hard for a firm to come on board with a really viable proposition for a three year contract, but if you say this is a 4 year deal (possibly +1, +1), then you have 4 years, potentially 6, to form a really lasting strategic relationship.” 

“I can understand how important time is for encouraging collaboration,” says Mary,  “if it’s too short, once you’ve got going, it’s almost time to review again!”

“Absolutely right”, agrees Sarah, “it takes c. 9 months to embed the panel, get the billing systems up and running, the first relationship meeting, and thinking what work goes where.  By 18 months you’re thinking ‘Oh this is working quite well …  I always advise GCs to leave it as long as possible, and I think that benefits both sides really.”

So, does Sarah see the rise of legal operations coming?

The industry has been talking about the rise of legal operations for a few years. It’s further developed in the US, but that’s likely due to higher levels of legal spend and more litigation, leading to more rapid developments in the market. In the UK, it’s all been about the early adoption curve and the good news stories which have come from the early adopters. Initially, Sarah suggests, people thought about Legal Operations as what tech-forward companies like Google, Cisco and NetApp were doing, “but then you hear the success stories from Vodafone, John Lewis, Royal Mail, National Grid, Smiths, Marks & Spencer - almost anywhere that’s got Legal Ops are coming forward with stories of where it’s worked.”  So the early adopters have gone out and proved it, now everyone else is going to join them. 

But, she caveats, it does depend on the size, spend and complexity of the legal team. “I would always say, you don’t necessarily need to go out and ‘buy’ a Director of Legal Operations with a large salary to get great stuff done.”

People, Process & Tech...and F-LEX?

“From my understanding,” says Mary, “Legal Ops is a combination of people, process and tech. Could F-LEX paralegals be the people part of the solution?”

“Yes, absolutely.” says Sarah.  When talking to GCs, she explains, the starting point is always “Who do you really need to do this work? What problem are you trying to solve?” 

She encourages GCs to think about whether they need a full-time specialist or someone short-term to come in and help for a few days or months. Then what seniority person do they need - senior, medium, junior - and with what skills? “Lawyers are marvellous, of course they are, but so are people with financial skills and project management skills”.

Sarah explains that she’s also working with talented paralegals because they’re enthusiastic and bright and not only have a knowledge of the law but also have other skills to offer. “You can just drop them in, give them an assignment and they can work on a flexible basis. I think this flexible market is brilliant now for GCs who need to get something done but don’t necessarily want to hire or can’t make the case for hiring, but they can probably get some budget for some short-term help. The options are endless.”

What should lawyers of the future learn from all of this?

F-LEX speaks to a lot of law students and often offer advice about what skills they should develop. “What would be your bit of advice for our law students starting out?”, asks Mary.

“Become an all-rounder”, says Sarah “Become fluent in Microsoft Office. Do a Project Management course - learn the difference between Agile and Waterfall.  Develop your people skills, negotiating, drafting, speaking skills.  Work on your social media presence, how to write a LinkedIn Profile, how to write well, how to pitch well.”

Lawyers need to be commercial, business people and can now have a career in all sorts of areas. Sarah references ‘Tomorrow’s  Lawyers’ by Richard Susskind (http://www.susskind.com/), where he sums up all the legal jobs now available: Technologists, Legal Engineers, Legal Operations, Legal Procurement, Bid Managers.  “And on top of that”, she says, “[thinking about] legal work, what sort of work do you do? Do you do Magic Circle work, do you do mid-range, do you do Legal Aid?  Do you develop legal design thinking, do you develop legal tech for legal solutions?”

“There’s so much out there”, agrees Mary, “it’s an exciting time!” But is it talked about enough?

When F-LEX did a survey to all our Paralegals, 35% said they don’t want to be stuck in a single area for their whole career, “I love that”, says Mary, “I really believe that law firms need to adapt to allow that flexibility to move around.”

Sarah believes that it’s not just law firms that need to look at this. In-house teams also need to think about what additional skills their in-house lawyers need in the changing face of the legal team. “They need to be able to speak the language of the business. The ability to have business conversations, using different platforms, which suit the audience, is really key.”

When in-house teams look to hire, whether they are public or private sector, large or small, they will almost always look to hire people with commercial awareness, someone who has either been in-house and come out, or has done one or more secondments - or who has run a business on the side. “I always talk about differentiating yourself - whether you’re a law firm, a consultant or a student looking for work. What makes you stand out?  I think the more business experience you’ve got, the better.”

So be an all-rounder, gain as much commercial experience as possible and play to your strengths. “I think the big thing I’ve learned”, says Mary, “is not to be scared to fail.”

When we hear about the ‘innovative’ firms and the in-house teams with forward-thinking GCs, they all say they are encouraging innovation and innovation culture or a ‘don’t be afraid of failure’ culture. Sarah adds, “You’ve got to encourage people to be brave, encourage them to expand their skill set and never stop learning.”

So, what does 2019 hold?

“I left Royal Mail in December 2017 because I thought there’s going to be so much going on in legal ops in 2018 and onwards, I’d rather be doing more things for more companies than be stuck in one - and it’s paid off. Hopefully 2019 will be even more legal-ops tastic!”

Sarah plans to do more work with in-house teams on legal operations and legal procurement, as well as more tech-implementation projects. “Legal tech naturally comes from panel reviews, process improvements - you begin to get your house in order and then you think of the tech as the icing on the cake, so I want to do more of that.”

She also plans to continue working with legal tech providers to enhance or develop their products to bring to market, “to make sure what they’re doing is really pertinent for the market they’re trying to get into.”

With the rise of legal operations in 2019 and with the ideas and frameworks organisations like CLOC provide, Sarah predicts that law leaders will be emboldened to do more in legal operations. The early adoption phase has passed, with the benefits proven, so the masses should now feel inspired to get involved. 

Links and further information:

To learn more about Sarah, visit www.sbvconsulting.co.uk

Check out Juro's hub for more legal operations resources.

Sarah has also had articles published in Practical Law and The Lawyer on topics discussed in this interview, please click on the links below to read these.

Case study: Royal Mail’s legal operations transformation – from Initial Public Offering to Internal Process Optimisation, originally published on Thomson Reuters’ Practical Law website on 22nd December 2017.

Legal operations comes to London: key messages from the CLOC EMEA Institute’s inaugural London conference, originally published on Thomson Reuters’ Practical Law website on 29th January 2018.

Contract Automation for In-House Functions, originally published in The Lawyer on 19th October 2017.

Click here to find out more about the CLOC EMEA Institute in London, 21st & 22nd January 2019.