Legal operations is quickly becoming an essential tool for organizational success in today's business world.
Legal operations is quickly becoming an essential tool to success in today’s business world. From contracts to financial records and beyond, having the right kind of legal structures in place is key — and poor contract management can take your company from top performer to bottom feeder very quickly.
In this blog, we explore what legal operations is and how good contract management boosts its impact on the entire organization. Read on to find out more about why investing in rigorous document control processes is becoming increasingly popular among successful companies looking to boost operational efficiency.
Legal operations is a critical function within organizations, encompassing a wide range of responsibilities that impact business operations. It involves the management and optimization of legal processes, resources, and technology to support the overall efficiency and effectiveness of the legal department. An industry standard of how legal operations works can be found in CLOC’s 12 Competencies.
Legal operations professionals focus on strategic planning, financial management, technology implementation, vendor management, and project management. By streamlining workflows, leveraging technology, and optimizing resources, legal operations professionals enhance business operations by promoting compliance, reducing risk, increasing productivity, and driving cost savings.
The business history of legal operations is recent, taking off since the few companies in the pre-1990s that had dedicated legal teams like General Electric and Bank of America. However, the practice soon expanded post-2000s when a mindset shift within more companies saw a goal of building value within the business and hence a greater focus on legal operations as an internal function.
The function’s impact extends beyond the legal department, contributing to better decision-making, improved cross-functional collaboration, and overall organizational success.
A legal operations team can streamline processes, automate repetitive tasks, and improve efficiency in legal operations. This can lead to significant cost savings by reducing the need for external legal support and optimizing resource allocation.
By having a dedicated legal operations team, organizations can proactively identify and manage legal risks. These teams can develop and implement compliance programs, monitor regulatory changes, and ensure that the organization is operating within legal boundaries.
Legal operations teams provide critical data and insights to support informed decision-making across the organization. They can help identify trends, analyze legal metrics, and provide strategic guidance to stakeholders, enabling them to make more effective decisions.
Legal operations teams act as a bridge between legal departments and other business units. They facilitate effective communication, collaboration, and alignment between legal professionals and stakeholders, fostering a culture of teamwork and cooperation.
Legal operations teams excel at managing complex legal projects, such as mergers and acquisitions, litigation, or regulatory compliance initiatives. Their expertise in project management ensures that these endeavors are executed smoothly, on time, and within budget.
Contract Lifecycle Management (CLM) plays a foundational role in legal operations. It encompasses the comprehensive management of contracts, starting from their creation and progressing through negotiation, signing, and ultimately reaching their expiration or renewal. This process is frequently assisted by technological solutions like intake systems, document automation, matter management, or knowledge management tools.
Having a centralized repository for all contracts allows for easy access, tracking, and management of important documents.
Create a system for setting reminders and notifications for important contract milestones such as renewal dates, termination dates, or renegotiation periods. This ensures that contracts are not overlooked or forgotten.
Transitioning from physical paper documents to digital formats improves efficiency, accessibility, and reduces the risk of losing or misplacing important contracts.
Ensure that all parties involved in the contract understand their roles, responsibilities, and obligations. This helps prevent misunderstandings and disputes down the line.
Contracts should be periodically reviewed to ensure they are still relevant, accurate, and aligned with business objectives. This helps identify any necessary revisions or amendments.
Maintaining open lines of communication between all parties involved in the contract is crucial. This enables prompt resolution of issues, clarification of terms, and proactive management of potential risks.
Running legal operations efficiently is a game-changer for the entire business. By implementing CLM solutions such as document standardization templates, contract review and approval workflows, digital signatures, and analysis and reporting, businesses have the opportunity to streamline and optimize their contract management processes, resulting in improved overall performance.
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