By Nick Phillips

Through our work with a number of organisations across the region — via our People, Process and Technology, and Managed Legal Services offerings — we’ve been exposed to different permutations and combinations of the legal operating model. We have picked out five key insights to share and which we think will be of interest. 

But first, what is an “operating model”? It is a term well known in the wider business realm and often a key strategy drive. A business’ operating model is essentially the combination of roles, skills, structures, processes, assets and technologies that allow an organisation to deliver on its strategy. It’s the way the business is set up to achieve its goals, and meet future challenges.  As technology continues to drive innovation, businesses are adapting to this to ensure their operating model reflects the technological future.

In its most basic form, this means determining what capabilities need to be put in place, primarily from a people, process, technology and organisation perspective; supported with appropriate structure, responsibilities / accountabilities, governance and culture/values frameworks, to give the strategy every chance of succeeding. Holistically, the legal operating model may look something like diagram 1 below:

Picture1-3

Diagram 1: Google / generalcounsel.nl

But while ‘theory’ and frameworks are all well and good, the success of any strategy ultimately comes down to the ability to execute against the plan. This is where we are finding that similarities in models and frameworks end, as there is no ‘one-size-fits-all’ approach.

So, here are five interesting insights that we are seeing and hearing ‘on our travels’:

First, there’s no single ‘right’ model or approach for the legal operations set-up. What is clear is that the Corporate Centre structure, or desired corporate structure in the case of new tech or new business model players, of the organisation will significantly dictate the extent of in-house oversight and control.

Picture2-2

Diagram 2: Google / Nolan Norton Institute; Korum Insights

A number of key questions are rhetorically answered, as the Corporate Centre’s level of interference / operational integration will usually dictate this. As can be seen in diagram 2 above, as you move from ‘bottom left’ to ‘top right’, the basis of how things interrelate and/or integrate changes:

  • how to operate out of the Corporate Centre vs operate in the local jurisdiction;
  • what services / activities are best done locally vs regionally;
  • how to best manage a diverse team etc,

all greatly depend on the degree of operational integration and strategic diversity of the Corporate Centre’s portfolio.

Second, legal departments are increasingly expected to become more of a strategic partner to the business, and to participate more pro-actively in the revenue generating and commercial areas of the operation. Whereas, traditionally, an in-house legal operation might be viewed as more of a ‘back-office’ function, and one that behaves in a predominantly reactive manner. This form of ‘red-flag’ governance approach is changing into one that is far more responsive, involved ‘up-front’ and relevant. GCs and their teams are being asked to become practical ‘commercial enablers’.

Key questions we see GCs facing here usually relate to the required changing ‘dynamic’ of the function. It comes down to:

  • what ‘we’ should or should not be involved in and therefore responsible for;
  • how do we best work at the ‘coal face’ with the business;
  • how to get timely visibility over what is going on;
  • how to best staff-up for this;
  • what is the most appropriate management hierarchy and/or legal span of control to deploy.

Third, there is the reality that the legal department is not immune to budget and cost/expense control. GCs are increasingly being asked to look at ways to do things more effectively and efficiently. But, not surprisingly, this outlook and expectation is in stark contrast to point 2 above! 

Key questions GCs are grappling with include:

  • how to best deploy my budget to meet business requirements;
  • where (and how) to pare back operations without impacting service expectation;
  • which operations should be kept in-house vs outsourced;
  • how to get good quality labour on an ‘on-demand’ basis;
  • what process improvements and/or technology solutions may assist in improving productivity and efficiency and/or help to reduce lower value-add work;
  • how to best oversee / manage the operation which has become leaner in structure.

Fourth, these changing business expectations and market dis-aggregation / fragmentation mean that GCs are struggling with who to turn to and trust for advice and guidance. Given these changing market dynamics, this is not a space that lawyers have historically played in and it’s not necessarily a skillset that sits comfortably in a GC’s toolbox. The rapid pace and ‘noise’ of new technologies, apps, AI, competition can be bamboozling and confusing, yet GC’s are expected to be ‘in the know’, to have a view, and ultimately to be able to come up with practical solutions.

In this scenario, it’s less about key questions and more about the feedback we hear, such as the importance of understanding upfront what the business expectation is of the legal operation. Think ‘relevance’ and ‘Return on Investment’ (ROI), not billable hours; the value of peer education / discussion and beware the generalists and self-appointed experts who can only ‘talk the talk’ as success only comes with ‘walking the walk’…and lawyers are known not to suffer fools gladly.

Our fifth observation is that the legal operating model is no longer just the domain for the multi-nationals and/or traditional regional operators. The rapid growth of businesses which know no-boundaries, underpinned by technological advancements have witnessed the necessity of interim operating models, on more of a variable cost-base structure. This allows GCs to better manage for ‘hockey-stick’ growth, cater to differentiated market requirements and expectations and to focus on doing one’s job rather than constantly be interviewing for full-time resources.

Key questions other than who to use as a trusted partner include where to focus one’s effort; what work it is critical to keep in-house; how to ensure / oversee the quality of output; what is the maturity of each market we are / will be operating in and how to best structure for this, etc.

Please reach out to us if you would like to find out more about the legal operating model or if you wish to discuss your legal operating model with us.

KorumLegal offers a range of solutions in the legal operating model and legal operations space. We are strictly technology agnostic, and combine technology with smart process and legal consultants who are well-versed on legal operations and process to undertake advisory projects on process blueprint and or re-design or transformation.

Nick Phillips is a KorumLegal Consultant and an experienced strategy advisor having worked with a number of clients globally.

https://www.korumlegal.com

Related Articles by Firm
Use the "crisis cycle" of coronavirus to pivot your legal practice for the better
We can take this opportunity to embrace and drive change.
Contracts – Why can't we make this process more efficient?
Contracts have been around for centuries. So, why is it that it remains a long, protracted, tedious and inefficient process?
Three “must have” legal solutions to reduce costs and increase value
External forces are requiring business leaders to consider political, social and environmental impacts.
Adding value – A consultant's perspective
Adapting to the client's changing needs is at the core of the role.
Navigating a looming recession: Five strategies to prepare you for the storm clouds
The most common risk-mitigation strategies that legal teams take when facing a downturn in the market.
Investing in uncertain times is not a paradox, it is a solution
Redesigning legal processes can deliver efficiency gains of between 15% and 50%.
Three key skills I wish I'd been taught in my law degree
Legal educators must arm graduates with the tools needed to embark on their legal journey.
Are you optimising project management skills in your legal department?
Because you should! We all need to upscale our skillset in areas of people, process and technology.
NewLaw takes-off in Southeast Asia
Rob Shakespeare of KorumLegal discusses the market for flexible and innovative legal solutions in one of the world’s fastest-growing regions ...
Don’t suffer FOMO* for Southeast Asia LegalTech!
Avoid the 'fear of missing out' by embracing the incredible opportunities technology offers.
Accessing new markets in APAC – Essential questions you must ask!
New market opportunities in this region are immense, but there are challenges.
How technology drives managed legal services
Managed legal services are an increasing area of focus for consumers and are starting to make significant inroads into Asia and APAC.
Creating value in law. Is it time to Stop, Collaborate and Listen?
To ensure that we’re creating excellence, we need to think, without distraction, of the bigger picture.
Payments regulatory landscape in APAC: Six things to be aware of
Important considerations for payment service providers operating in Asia Pacific.
A journey from traditional working practices to a flexible workplace
Policies that let employees work remotely can improve productivity and reduce staff turnover.
Innovation in legal services: What it is and how we do it
To begin the innovation journey, we should first understand what we are talking about.
Managed legal services: part of a new paradigm for the legal solutions market
The emergence of alternative legal solutions is giving clients a lot more choice.
Your first 10 days as a legal consultant
The challenges facing legal consultants are unique and require a different set of skills to other employees.
Nobody's got time for that! General counsel and legaltech
How to overcome the lack of time, resources and knowhow needed to implement technology solutions.
Law as a process
How process design defines value, delivers efficiency and drives business strategy.
Lifting the veil on payments
Payments companies need to understand and comply with many complex laws and regulations.
Do you have what it takes? Successful, flexible careers for lawyers
KorumLegal takes a look at the type of lawyers and consultants it works with and the appeal of NewLaw.
Related Articles
Compliance with official measures to combat Covid-19 made mandatory
Significant responsibility for ensuring compliance with directives to stop the spread of Covid-19 has been delegated to the law enforcement authorities of the UAE.
Recent measures implemented by the UAE authorities in response to Covid-19
Noteworthy measures that have been implemented by various UAE authorities to date.
Use the "crisis cycle" of coronavirus to pivot your legal practice for the better
We can take this opportunity to embrace and drive change.
Related Articles by Jurisdiction
Latest Articles
Compliance with official measures to combat Covid-19 made mandatory
Significant responsibility for ensuring compliance with directives to stop the spread of Covid-19 has been delegated to the law enforcement authorities of the UAE.
The need to look at Intellectual Property in a new light
Cross border data flows will become one of if not the most important consideration for corporate counsel in the future given the implications for intellectual property (IP), privacy, competition, trade, compliance and innovation ...
Maxwell Chambers offers cutting edge virtual arbitration
The Singapore ADR centre is now offering advanced virtual arbitration solutions in collaboration with Law In Order.