Legal Departments Can Come and Go, But Legal Ops Mangers May Be Forever
10 December 2020
Earlier this week Benjamin Moore said it planned to outsource all of its in-house legal work to outside providers. But other businesses mulling a similar arrangement may quickly find that cost savings or not, managing those providers will still require an investment of company time and resources.
In a legal ecosystem stacked with law firms, alternative legal service providers (ALSPs) and members of the Big Four, there are plenty of options on the table for businesses toying with the idea of ditching their legal departments and outsourcing the bulk of that work. But even if there’s technically no legal department on the books anymore, the need for a legal ops manager will likely continue to persist.
Still, it’s too soon to tell for Benjamin Moore. Earlier this week, the paint company laid off the entirety of its four-person legal team. A source familiar with the situation told Legaltech News affiliate Corporate Counsel that all forthcoming legal work will be funneled to the firm of Littler Mendelson and independent contractors.
Brett Burney of Burney Consultants believes that endeavors like the one currently unfolding at Benjamin Moore are inevitable given the attraction of the cost savings outsourcing potentially offers. “But time will tell if completely getting rid of a legal department will make sense from a holistic standpoint. There still is a strong and necessary people-skills component to legal leadership at a company, and so I personally don’t believe this will always work out for the better,” Burney said.
In other words, even if law firms, no longer have the same amount of staff, the chore of monitoring whatever stable of law firms and alternative service providers a company puts together still has to fall to somebody within the organization. Susan Hackett, CEO at Legal Executive Leadership LLC, noted that a corporate legal department ideally brings institutional knowledge and the ability to coordinate the needs of multiple departments to the table.
Outsourcing a company’s legal work doesn’t eliminate those administrative needs. In fact, a company that elects to rely more heavily on law firms and ALSPs may inadvertently enhance its own dependence upon some kind of in-house leadership role that can coordinate and oversee all of those projects.
“And they start bringing people in to manage the [legal] function again,” Hackett said.
One of the forces driving the continued need for a legal operations manager might be the sheer number of providers that an organization without a legal department might have to rely upon in order to meet all of their legal needs. Marc Allen, managing director at HBR Consulting, noted that it can be a difficult challenge to find a single law firm that has deep levels of expertise across multiple domains such as compliance or intellectual property.
While using multiple firms or providers can help to fill in those knowledge gaps, all of the players involved ultimately have to march to a unified corporate strategy. “There still needs to be a primary owner or director of that work within the company,” Allen said.
Relying on outside counsel to make those kinds of big picture corporate strategy decisions can be a dicey proposition. Chis Gallagher, president of Adecco Group Professional Solutions, noted that while law firm attorneys are subject matter experts, they don’t typically have the same insight into how a business operates as a full-time in-house attorney might.
“Think of a general contractor building a house … They have to have some semblance of knowledge otherwise you are not going to get the quality work, whether it’s legal or otherwise, that you are outsourcing,” Gallagher said
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