Small law departments need legal ops practices just as much as large departments, but information about legal ops typically centers around big businesses that can afford to bring on legal ops specialists or are ready to invest in big, expensive products. That often leaves small law departments in the dark, missing out on incredible resources to support their team and help their departments mature.
This information is for small law departments assessing their maturity or looking to take advantage of the benefits of legal ops strategies wherever they are in their growth process.
Contract tracking is the low hanging fruit for legal ops in small departments. If you’re just getting started, a central digital folder for executed contracts and Excel spreadsheets are a great first step. They are a low-cost way to make sure there is a record of all contracts and give you a basic understanding of active contracts, important dates, and basic compliance.
As the number of agreements grows, however, spreadsheet-based tracking can get overwhelming and can leave holes in the data, like which contracts are in negotiation, historical abandoned negotiations, and the average time to close.
Organizations that have outgrown the spreadsheet phase might notice that they are:
- Struggling to keep track of important contract dates
- Missing renewal windows or cancelation dates
- Not properly tracking contracts with special terms
- Needing more metrics for leadership
- Losing track of incoming requests
Small law departments at this stage have often graduated to the next phase of contract tracking: contract management software. These tools manage intake, contract templating, metrics and reporting, contract workflows, and more robust tools also include matter management, document storage, e-signature integrations, and the like.
Contract playbooks are another great tool for small law departments to ease their negotiation process and track special terms. These playbooks provide standardized negotiation parameters for all team members negotiating contracts.
They help these negotiators know what they are permitted to give without causing an escalation at every step and standardize language across contracts when accommodations are allowed.
When building a contract playbook, consider high risk issues, where approvals are needed, and tipping points for getting other stakeholders involved. Not only do contract playbooks enable easy growth as the team expands, but they can also empower non-legal team members to do simple negotiations without making wild concessions (if their negotiation is permitted in your company policy).
As your department continues to mature, you can also use these contract playbooks to automate steps in a contract management workflow tool, like sending approvals or setting different signatories at particular contract amounts.
Proving legal department value: Metrics and reporting
No matter the size of the legal department, it’s critical for legal teams to prove value to the company and show that they are not simply a cost center. Legal teams enable sales, avoid risk, and support all other departments.
For smaller departments, a few key metrics to consider are contract volume and variety over time, average turn-around time by contract type, average contract value closed, savings negotiated on vendor agreements, recovered amounts in litigation, and operational improvements/savings.
Departments should prioritize which metrics are most important to their business and start tracking those as they go, adding in additional metrics over time.
Departments starting at the ground floor with legal ops may be able to accomplish the first steps without needing to gain buy-in from leadership. The information gained from simple contract and metric tracking can help a department lead look great to leadership and manage day-to-day ops with much greater efficiency.
Once leadership has been provided data and strategic vision, they are much more likely to buy-in to spend on a legal ops tool when the department is ready.
When making requests for legal ops spend, determine all your requirements, list the pros and cons, and understand how each will impact key stakeholders and the company. Find a champion, for example, by partnering with the sales manager to help show how improved contract request intake and workflow automations can reduce the turnaround time for sales closures, giving the sales team more time to pursue new leads.
Use previous legal ops practices to show what has been done within the current budget, then show all the additional value that can be brought by investing in the next step. Describe the value as what is most important to your stakeholders — efficiency, ease of use, cost recovery, and so on.
Highlight how your department adds value to the organization and how improved support of other departments brings value to the company as a whole.
Legal ops strategies are for every law department. Small legal teams, even a team of one, can improve their department’s day-to-day activities by implementing strategic processes.
The level of effort put into legal ops should be based on the department’s maturity level. Start with basic contract tracking and a few key metrics. When the department matures, upgrade legal ops strategies to include technology solutions.
These are the natural next steps in department maturity and aren’t only built for medium and large companies with expendable income. They are built to serve small, developing teams to increase efficiency, save time, and add value to the bottom line.