I was honored to be part of Wolters Kluwer ELM Solutions’ peer forum event for the energy industry. In my previous post, Engage, Enforce and Examine: Insights on Vendor Management, I shared the information that we, as hosts, brought to the table to provide context for our conversations. This follow-up highlights the engaging discussions that took place during the event, showcasing key insights and actionable strategies shared by the seasoned legal professionals in attendance.
Engage: Cultivating strategic counsel partnerships
The evolving relationship between in-house attorneys and legal ops teams took center stage during the session. Participants discussed the balance between attorney autonomy in selecting outside counsel and the strategic oversight provided by legal ops teams. This delicate balance is critical, ensuring that in-house needs are met while maintaining cost efficiency and strategic alignment. The following are a few of the key takeaways.
- Understanding diverse perspectives:
Participants expressed concerns that legal operations teams may sometimes lack a full understanding of the nuanced needs of in-house attorneys. However, they also acknowledged the critical role legal ops play as strategic advisors and relationship builders. Regular, open communication between in-house counsel and legal ops can help close any gaps in understanding, ensuring alignment on key strategic priorities.
- Decision-making in selecting counsel:
The discussions emphasized the importance of determining whether a full-service firm or a niche provider is best suited for a particular matter. One analogy compared this decision to choosing between the amenities of a luxury cruise ship and the specialized services of a smaller boat.
- Streamlining engagements:
Attendees emphasized the critical role of concise, up-to-date engagement letters in establishing clear communication and expectations between all parties involved. These documents, when paired with detailed billing guidelines, help set the foundation for a transparent working relationship, ensuring that both clients and service providers are aligned on responsibilities, deliverables, and financial terms from the very beginning.
Enforce: Driving accountability and collaborative oversight
Participants recognized that enforcing adherence to established agreements—such as billing guidelines, hourly rates, budgets, and alternative fee arrangements—is a perpetual challenge for legal departments. The discussions, which included the points below, stressed the need for systematic, respectful approaches to invoice review and enforcement that maintain outside counsel relationships and in-house morale.
- Invoice review and compliance:
Timely and accurate invoice reviews are crucial for ensuring compliance with billing guidelines. When discrepancies arise, addressing them in a way that emphasizes both parties’ desire to align with agreements is key to maintaining positive relationships with law firms. - The ‘bad cop’ role:
When there is concern that a firm may not react well to adjustments, it was agreed that legal ops teams should serve as the “bad cop” by clearly separating enforcement duties from matter management duties, thereby safeguarding productive engagements. - Streamlined communication and processes:
The creation of a centralized, easily accessible repository for billing guidelines was recommended, along with systematic measures such as applying discounts for late invoices or guideline violations. Regular updates (every two to three years) help keep the guidelines relevant.
Examine: Leveraging data for improved results
Data plays a crucial role in driving efficiency and transparency within legal operations. The conversations underscored how historical performance and benchmarking data can lead to better-informed decision-making. Some examples are below.
- Benchmarking for better decisions:
Participants stressed the importance of using industry-standard benchmarks to assess billing practices. It’s best to identify benchmarks and metrics that reflect your department’s specific needs, incorporating both general and specialty-specific data.
- Transparency and trust through data sharing:
Sharing performance data with law firms was seen as a means to ensure that they understand the criteria by which they are evaluated, thereby building trust and empowering firms to better meet client needs in future engagements. Being transparent with performance data can also be powerful during price negotiations.
- Strategic use of data:
Data not only helps in assessing current practices but also plays a key role in demonstrating the value of legal ops. Differentiating between litigation and transactional work, and focusing on total outcome costs, emerged as important for assessing the overall performance of the legal ops team.
Focusing on engaging outside counsel, enforcing billing guidelines, and harnessing the power of data can enable legal teams to drive strategic improvements and enhanced outcomes. The vibrant exchange of ideas during the peer forum not only deepened participants’ understanding of current challenges but also provided a roadmap for future success in legal operations.
If you are interested in hearing more about how legal ops teams can increase the value they deliver to their organizations, I recommend listening to the From cost center to profit center: Innovative legal strategies episode of our Legal Leaders Exchange podcast.
