Photo: Monkey Business Images/Shutterstock.com

The idea that legal departments still operate as cost centers and a lack of education on the benefits of legal operations is partly why just less than half of legal departments do not have a dedicated legal operations professional on staff.

According to the recent Association of Corporate Counsel's 2020 Chief Legal Officers Survey, 46% of top company lawyers indicated they do not have any legal operations professionals with another 24% having one professional.

"The legal department is generally considered a cost center even though, like many overhead functions, it plays a vital role in the business. All companies these days are fixated on keeping a lid on the head count," Catherine Moynihan, executive director of the Association of Corporate Counsel's legal operations arm, said in an interview. "Companies generally prioritize investing in revenue-generating functions."

Many who indicated they do not have a dedicated legal operations professional come from small companies with small legal departments, Moynihan added.

According to additional data sent to Corporate Counsel by the ACC, the smaller the legal department the less likely it is to have a legal operations professional. Roughly 26% of legal departments with two to five employees have only one legal operations professional.

Moynihan said executives outside of the legal department need to be educated on the value of legal operations.

"Once you have someone [legal operations professional] the value is clearer," Moynihan said. "The hard part seems to be getting the first person started."

She said there is a benefit to those who build their legal departments with a legal operations professional in place because the department is "building for scalability."

"Which is much better than where we see legal departments find themselves where they try to keep up with the business by adding lawyers," Moynihan said. "Then they reach an inflection point where they realize that isn't working."

In a recent interview with Corporate Counsel, Ironclad Inc.'s general counsel, Chris Young, said the first two hires in his newly formed legal department were legal operations professionals.

"We wanted to set our policies and our systems up so that when talent came in they could hit the ground running and focus on the impactful legal work that lawyers really enjoy," Young said.

Mike Haven, a member of the board of directors at the Corporate Legal Operations Consortium, said it becomes harder to implement legal operations as the legal department grows. He said overlooking legal operations can result in attorneys doing more work related to operations than the legal work they were hired to do.

"The further you get going down the road in a growing legal department without implementing legal ops, the harder it is to implement it," Haven said. "If you get legal ops in the department early on, you get it right sooner and that requires less change management down the road."