We’re sitting down with legal professionals to learn more about their roles and responsibilities, uncover useful insights and best practices, and discuss their view on the future of legal and legal technology.
This month, we had a wonderful time chatting all things legal operations with Dan Baker, the Chief of Staff, Director of Legal Operations at Ancestry.com – the global leader in family history and consumer genomics. We wanted to learn about the unique path that led Dan to the legal operations world and how he’s tackling some of the industry’s top challenges.
How did you get involved in legal operations?
I spent a good deal of my early career in strategic sourcing; first working in procurement type systems in the finance world, and later joining teams focused on implementing new accounting software. Then there was a shift in legal technology. Tools like e-Billing, eDiscovery, contract management, etc. started emerging. I was a business analyst at the time, but was working very closely with legal teams that were implementing these new technologies – sometimes building them in-house which can be pretty crazy. I became embedded into their operations and processes, and naturally began learning their world.
My involvement in legal operations – my ‘aha moment’ – came a little over five years ago when I heard about an organization called CLOC (Corporate Legal Operations Consortium), a group that’s advocating for the legal operations role and moving the industry as a collective group. I attended the early meetings when it was just a few folks discussing best practices.
It was CLOC that made me realize I am the unicorn. What I mean by that is my experiences in technology, finance, and legal were aligned with CLOC’s ideal profile for a legal operations professional. All of these things led me to the legal operations world.
The responsibilities of the legal operations function tends to be different at every company. How do you define legal operations?
My quick elevator pitch – the legal operations’ role is comprised of CLOC’s twelve core competencies with the ultimate goal of making sure your attorneys are best leveraged to do their jobs, while creating an organization where folks feel valued and want to stay.
To elaborate a bit; the ultimate goal of legal operations is both the addition and retention of headcount. Of course, legal operations includes process, systems, org structure, and billing and accruals. But when all of these things are done correctly, you’re not only effectively managing legal department spend, you’re creating trust with finance. You’re demonstrating control of your budget and cost savings thanks to more efficient and effective processes. This makes it easier for finance to open the budget for initiatives like headcount. You can then add the right talent, at the right time, helping the organization grow strategically.
Once you hire someone, legal operations has to think about how to cultivate an amazing culture and create values that make people want to stay. How can someone in your organization have a meaningful conversation with their manager unless they have a clear plan for career ladders worked out? Legal operations plays a huge part in working with HR to make this happen. Again, it goes back to the idea that we must make sure each person in the organization is best leveraged to do their job, so they can grow, be promoted, and want to stay.
Data is a popular topic among legal operations professionals. How do you and your legal team use data?
Legal data is extremely important, but in order to use it, you need to collect a lot of it. You can’t do this without some sort of legal e-Billing solution. After collecting data for a period of time, the analytics piece is introduced and you can start looking at your data and bucketing it into groups. You can say, “Here are the law firm costs in this practice area for this entity or this region” and you can start identifying trends based on this information.
These trends influence your budgets and allow you to forecast for future litigation, projects, or even strategic initiatives so legal is proactive instead of reactive. You can take it a step further and automate the process, sending data from e-Billing to a solution like Oracle Business Intelligence for a comprehensive view of your legal department and business. It becomes a beautiful lifecycle where you’re looking at data in a much different way. You’re up-leveling your conversations and doing better analysis overall.
Do you ever use data to drive your relationships with outside counsel?
I’ve been at companies where 97% of outside counsel engagement was based on Alternative Fee Arrangements (AFA). This type of situation, as well as having the ability to put in fixed fees or understand how to RFP a litigation based on previous spend – it’s only possible when you have data.
When it comes to AFAs, law firms are always worried that an alternative arrangement will decrease the amount of money we spend with them, but the opposite is true. It actually opens up our budget so we can spend more because we’re creating spend predictability.
If I put an AFA in place with a law firm and get great accrual reporting from them, even if it’s for a fixed fee arrangement, I can be confident in my spend numbers and know what to budget for. When I can take accurate numbers to my accounting team, it doesn’t just make their job easier, it builds trust. When I need to increase budget with a law firm, I have historical data to support my decision and I get less pushback because the law firm has a proven track record for delivering and meeting our requirements.
What are your top recommendations to new or growing legal teams trying to make it in this modern legal operations world?
Focus on your finances. The foundational level of a legal operations function is your finances which means financial and vendor management need to be your top priority.
To achieve this, the very first system that every legal operations team should implement is e-Billing. People get so bored with all the talk about invoices, but invoicing is the best way to learn about your business. Everything you need to know can be found within your invoices. It is extremely powerful.
What are your top recommendations to folks that want to get into a legal operations role?
You have to have a sense of humor! Attorneys can be so serious – do not let it yuck your yum.
It is also important to find your own value in what you do. At this stage of the industry, the legal operations role is strategic, but it’s still a support role. There are always a million little things going on, but a lot of what is legal operations does is behind the curtains. You have to keep your ego out of it and realize it’s the outcome that matters. You can’t get frustrated.
Finally, pulling from CLOC’s core competencies, you have to have a great communications program and solid strategic and organizational structure in place. These are so important in making your legal team feel valued and understood, and will go a long way in cultivating an environment where people want to do their best.
Supporting the Legal Operations Role
We’d like to thank Dan for taking the time to share his experience in legal operations. His insight and perspective was refreshing for legal ops professionals of all levels. Make sure you don’t miss out on our next legal operations interview by subscribing to the SimpleLegal blog!