The Hyperion Research 2022 Legal Operation Benchmarking study underscores the continued growth in the prevalence of dedicated legal ops professionals in corporate legal departments, with 59% of respondents indicating they have dedicated legal ops staff and 13% indicating they will soon – combining to 72%. Moreover, we see the continued shift away from asking senior corporate counsel to supervise legal ops as an extra area of responsibility - 64% of respondents indicated that the head of legal ops is dedicated to that function.
More significant is the reporting structure, with the majority (51%) of legal ops heads reporting to the general counsel and another 43% sitting on the GC’s leadership team. It’s heartening that only 7% of respondents indicated that the head of operations is 2 or more layers removed from the GC, because the highest use of a resource devoted to legal operations is to drive change, and professional status matters (for more on this topic, read 4 Steps To Set Up A Legal Ops Function For Success).
Legal is Making Headway in Its Perceived Value
The pandemic exacted a huge toll, but at the same time offered corporate legal departments a rare opportunity to demonstrate its value. As workforces dispersed and contracts were contested, Legal was able to carry on and met the new challenges head-on.
The Hyperion benchmarking survey showed big increases in assessments of the perceived value Legal from 2020 to 2022. 44% percent strongly agreed that “the business values the Law Department’s contributions,” up from 24% at the beginning of the pandemic. And nearly a third strongly agreed that “business partners view the Law Department as more than a ‘services’ department,” up from 20% previously.
Advancing maturity of Legal Operations has a role in this. 26% percent of respondents strongly agreed that “the Legal Operations team has a well-developed strategy and vision” – up slightly from 24% in the last benchmarking report.
The Plot Thickens; Reporting Structure Affects Perceived Value
We investigated connections between sentiments about the legal department and saw stark links between legal ops reporting structure and value delivered. Notably, in legal departments where the head of Legal Ops reports to the GC, over half (51%) agree/strongly agree that “the business values the Law Department’s contributions” compared to only 5% strongly agreeing with that assertion in departments where the head of legal ops is not part of the GC’s leadership team. Similarly, where the head of legal ops has a seat at the GC’s leadership table, 44% agree/strongly agree that the business views Legal as more than a “services” department compared to 7% in departments in which the head of legal ops does not.
We acknowledge the self-reinforcement (or aggrandizement!) inherent in asking legal ops leaders to assess sentiments about the legal department, but the stark differences help make an important point.
To maximize the impact of the investment in dedicated headcount for legal operations, role and structure are key. The role should be strategically (not administratively) focused, and the structure should support insight and convey importance.
The head of legal operations is most effective as a change agent when included as part of the GC’s leadership team. From that vantage point, the legal COO will have visibility into the workings of the legal department; observing where there is slack and where there are constraints, and the most significant issues and challenges. Being part of the leadership team also confers professional status, especially when the initiatives they lead receive the conspicuous backing of the general counsel and the rest of the leadership team.
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For a guide to strategic legal operations leadership, download the Hyperion PracticeView™ Guide: A Methodology for Legal Transformation summarized here.
