Legal departments are evolving from being perceived as cost centers to indispensable business partners. By rethinking productivity, streamlining billing practices, and using data strategically, forward-thinking legal ops teams can drive measurable value for their organizations. Wolter Kluwer’s Jennifer McIver and Jim Michalowicz of TE Connectivity spoke on the most recent episode of the Legal Leaders Exchange podcast about how legal teams can optimize their operations, reduce inefficiencies, and deliver financial impact. Here’s how you can apply these strategies to transform your legal department.
Defining the legal department value proposition
Every successful transformation starts with understanding your value proposition. What is the core of your legal department? Mission? What does it want to be known for? Jim emphasizes that identifying this core purpose allows teams to align their work with broader business goals. Conducting an internal audit to assess how your department adds value—whether through mitigating risk, recovering financial resources, or driving operational efficiency—is a critical step in shaping this vision.
One of the most compelling points from the discussion was the need to define what productivity means for your specific legal department, depending on what its goals are. For Jim’s team, productivity isn’t just about doing more with less; it’s about delivering measurable outcomes. By focusing on financial impact, efficiency, and alignment with organizational priorities, the legal team becomes a key driver of business success. This might include areas that are typically overlooked as legal department objectives.
One overlooked opportunity in many legal departments is identifying areas where money can flow back into the company. Examples include untapped claims the company may have or government incentives that reward certain business activities. By addressing these, legal teams can make significant contributions to the organization’s financial health, helping it move from a cost center to a profit center.
Simplifying and enhancing billing models
Billing practices are sometimes a source of inefficiency, but they can also serve as a gateway to greater productivity. For Jim’s team, simplifying the vast array of task codes in their IP portfolio proved to be a game-changer. Reducing the codes to a manageable number made it easier to track costs and identify outliers.
In addition to reducing the number of billing codes in use, the team also analyzed their historical legal spend data, pinpointing cost variations—such as patent filings ranging from $2,000 to $20,000—and established predictable pricing targets that apply to the majority of work they send to outside counsel. When bills are within a target range for a particular type of work in a given jurisdiction, invoice reviewers can spend less time scrutinizing line items.
Building momentum: Start where it hurts
Implementing change often requires overcoming resistance within the legal team. To help the team recognize that a change is indeed an improvement, target areas where inefficiencies cause the most frustration. For example, Jim found a champion for transformation in the company’s chief IP counsel. She supported changes to the billing model because they reduced her team’s time spent reviewing low-priority invoices.
Updates to processes and technology, even when they increase efficiency, are frequently seen as disruptive. If you introduce the change first to the person or team currently feeling the most pain from inefficiencies, you may find some cheerleaders who can show others how helpful the new approach is. Others will see the results, such as improved cost management or capacity increase, and will be more eager to bring those benefits to their own work. Over time, a culture of innovation and continuous improvement takes root.
Aligning legal ops with business goals
The conversation around rates often focuses on negotiations, but Jim advises looking beyond rates to consider effort, staffing, and outcomes. By developing task-based budgets and asking firms to forecast their resource allocation, legal teams can take a more strategic approach to managing costs while ensuring that the work aligns with organizational priorities.
Legal departments that focus on measurable productivity, data-driven insights, and streamlined practices can position themselves as strategic partners who deliver real value to their organizations. As Jim concludes, it all starts with defining, measuring, and marketing your value proposition.
For more insights and guidance, listen to the full conversation with Jennifer McIver and Jim Michalowicz on the Legal Leaders Exchange podcast: From cost center to profit center: Innovative legal strategies.
