By
Legal operations have become a fundamental pillar to ensure efficiency and compliance within legal departments and companies. But everything that is essential is sometimes complex and, as with any critical function, legal operations are not exempt from several issues and risks. In this article, we explore the source of these challenges and, more importantly, how to effectively address them to ensure optimal performance in the legal department.
This article is also available in Spanish.
In this article you will find:
- What are legal operations?
- Problems and risks in legal operations: how do they arise?
- Risks of ineffective or unsafe legal operations
- Practical solutions for dealing with legal operations problems and risks
- Keep your legal department on top: strong legal operations are the key to success
1. What are legal operations?
Legal operations focus on processes, technology and resources to improve operational efficiency and align with business objectives.
Legal operations refers to a function within the legal department, focused on managing and optimising processes, technology and resources to improve operational efficiency and align with the company's strategic objectives. This concept encompasses a wide range of activities, including contract management, data governance, legal technology implementation, compliance oversight and legal budget management. In essence, legal operations seek to transform the legal department into a strategic value driver, facilitating its internal functioning and enhancing its ability to manage risk and support corporate goals.
2. Problems and risks in legal operations: how do they arise?
Legal operations cover a wide range of inherently complex functions and processes, with problems and risks that can arise at any time. Some of the most common causes include:
- Lack of strategic alignment: When the legal department is not aligned with the company's strategic objectives, problems in task prioritisation and resource allocation are more common.
- Ineffective implementation of technology: Technology is a key component of legal operations, but a lack of its implementation by the team can lead to inefficiencies and risks.
- Ineffective contract management: Contracts are the backbone of any business. Poor contract management leads to defaults, litigation and financial losses.
- Lack of interdepartmental connection: Lack of effective communication between the legal department and other areas can lead to misunderstandings, delays and errors.
- Work overload and limited resources: Legal teams often face a large amount of work with limited resources, which can lead to errors and non-compliance.
3. Risks of ineffective or unsafe legal operations
But what are these dreaded problems? Let's take a look at the most common ones, which often stem from ineffective or insecure legal operations.
- Contract management errors: Poor contract management can lead to errors in the drafting, execution and renewal of agreements. This can result in contractual breaches, litigation or, in more critical cases, the loss of key business opportunities. Contractual errors can also result in unfavourable terms undetected in time, leading to financial losses later on.
- Security breaches and loss of sensitive data: Lack of adequate measures in legal operations can lead to security breaches, exposing the company to the risk of cyber-attacks and loss of confidential information. This not only compromises the integrity of legal data but may also violate privacy and data protection regulations. Sanctions, a loss of trust from stakeholders such as customers and partners - the consequences are severe.
- Regulatory sanctions: if your company has ineffective and insecure legal operations, it may be in non-compliance with regulations. This can lead to significant fines, operational restrictions and even the loss of allies, business licences, etc. Legal operations that do not take into account compliance with local and international regulations put business continuity at risk.
You might be interested in: Best practices in legal operations
- Delays in decision-making: Inefficient legal operations can lead to delays in making critical decisions, especially in high-pressure or crises, which affects the company's ability to respond quickly to challenges and can lead to loss of competitive advantage in the marketplace.
- Damage to corporate reputation: Problems arising from ineffective or insecure legal operations can seriously damage a company's reputation. Loss of trust from customers, partners and regulators can have a lasting impact on the company's ability to operate and grow.
4. Practical solutions for dealing with legal operations problems and risks
OK, we have analysed the causes, the problems and the consequences. Now it is time to move on to the solutions, to the keys that legal departments must follow in order to have solid and efficient legal operations that not only avoid these risks but are also a real pillar on which to support business development.
Strategic alignment of the legal department with the company
To ensure that the legal department is aligned with the company's objectives, it is crucial to establish clear and continuous communication with business leaders. This includes participating in strategic meetings and ensuring that the legal department's priorities reflect those of the organisation as a whole. In addition, it is important to establish clear metrics that measure the impact of legal operations on business objectives, allowing strategies to be adjusted as necessary.
Practical solution: Implement a system of metrics and KPIs that allows you to continuously assess and adjust the legal department's contribution to the business as well as its strategic alignment with the business.
Effective implementation of legal technology
Technology is a key enabler in legal operations, but only when it is implemented effectively. It is critical to select the right tools, tailored to the specific needs of the legal department, and to ensure that the entire team is trained to use them. In addition, it is important to continuously monitor the use of technology to identify and resolve any adoption issues.
Practical solution: Involve the legal team in the technology selection process to ensure that the chosen tools are appropriate. Be sure to provide ongoing training and technical support to maximise adoption and effective use of the tools.
Improving contract management
Effective contract management is essential to minimise risks in legal operations. Forget about bottlenecks and focus all hands on the value effort and the more strategic work of contracts. Implementing a Contract Lifecycle Management (CLM) solution that automates and optimises all stages of the contract lifecycle is a key measure to boost your department's work on contracts. CLM not only reduces human error and centralises information, but also ensures that contracts are managed proactively, avoiding non-compliance and litigation.
Practical solution: assess the market and choose a CLM to start boosting your contract work. You don't need to start a pharaonic project, going step by step is a useful method when it comes to improving and automating the work of the department.
Promoting effective communication
Effective communication is key to the success of legal operations. It is important to establish clear and open channels of communication from the legal department to the other areas of the company and vice versa. This includes implementing collaboration tools and holding regular meetings to discuss ongoing projects and resolve any issues that arise.
Practical solution: establish clear communication channels, with technologies that foster collaboration and regular meetings, to ensure that everyone is aligned and aware of tasks and priorities. Foster a culture of transparency and collaboration within the team.
Manage workload and resources
Workload overload is a common challenge in legal operations, but it can be mitigated through effective workload and resource management, which involves prioritising tasks, delegating appropriately and relying on technology to automate repetitive tasks. It is important to continuously monitor workload with KPIs to avoid burnout and ensure that the team can fulfil its responsibilities effectively.
Practical solution: use project management tools such as Asana or Monday.com to assign tasks and monitor workload. Implement a delegation system to ensure that tasks are distributed evenly and that critical tasks are prioritised.
Ultimate guide. Key features of CLM and its benefits for business
5. Keep your legal department on top: strong legal operations are the key to success
We have seen how legal operations are fundamental to the success of any legal department, but they are not without problems and risks. Minimising risks and ensuring that the legal department operates efficiently and in line with the company's objectives is not only possible but advisable for every legal department. By implementing the right technology, improving contract management, fostering communication and effectively managing workloads, you will be taking key steps to overcome the main risks and problems of mismanaged legal operations. We encourage you to maintain a proactive and flexible approach to legal operations' challenges, enabling you to lead your legal team to thrive in an increasingly complex business environment.
