What is CLOC?
One of the main players bringing law firms’ operations in line with other 21st century industries is an organization called CLOC, the Corporate Legal Operations Consortium, founded in 2016 in a conference organized by industry thought leaders bringing together lawyers and process experts.
CLOC has had a huge influence on the legal industry workflow and on the evolution of legal operations. CLOC envisions the "legal operations professional" as the administrator whose role is to help lawyers obtain the information and services they need to provide the best legal services to their clients. By providing a better legal service experience, legal ops deliver value to the business. The organization now prides itself on having ". . . united 50,000+ legal professionals across the globe who are committed to driving innovation, maximizing efficiency and establishing operational best practices within legal service delivery." CLOC and other legal operations organizations have published dozens of resource papers on key topics related to legal operations ranging from Law Firm Management, to Corporate Legal Operations, Procurement, Law Department Technology, Risk & Compliance, and much more .
CLOC’s Core Mission states that its Community: "Consists of "high-performance individuals who work to maximize the value of investments in people, processes and technology so that legal services delivery and legal operations drive maximum value for business and its customers – society." Their aim is the "support of members in every facet of their role" which means, "creating opportunities for collaboration, providing forums to hear from industry leaders, creating a network of peers, providing best practices and offering opportunities for personal and professional development." Currently there are over 900 in-house lawyers as members, from Fortune 1000 companies, among thousands of other industry members. CLOC defines legal operations as, "legal operations is the strategic planning and management of service delivery to increase quality, enhance efficiency and reduce costs." The legal operations professional is responsible for all business functions within the legal department – financial management, vendor and matter management, knowledge management, strategic planning, project management, and so on. And that’s the essence – take the noise out of legal work and create a streamlined procedure that delivers phenomenal value to the business.
Components of Legal Operations
The main components of legal operations, as identified by the Corporate Legal Operations Consortium (CLOC), include strategic planning, technology management and financial management. Strategic planning focuses on aligning legal operations with business objectives to deliver preferred outcomes. A strategic operations plan carefully considers company goals and resources before attempting to increase overall efficiency. Technology management refers to identifying, implementing and managing technology solutions for the in-house legal team. Effective technology management can help legal teams automate processes and lower administrative costs. Legal operations managers must evaluate available technology tools to determine which ones can alleviate resources, increase productivity and simplify consumer experiences. Strategic financial planning assists legal operations in meeting objectives by controlling costs and maximizing outcomes. Financial planning involves long-term planning that considers factors such as cost allocation, fee arrangements and performance management. Legal teams should also consider ways to enhance forecasting, organization and budgeting for long-term strategy implementation.
The Advantages of Implementing CLOC
The implementation of CLOC principles brings with it a multitude of benefits to organizations that are adopting these standards to advance the legal operations function. From lower operating costs to enhanced governance processes and improved quality of legal services, there is a distinct advantage that comes from incorporating best practices into legal departments: The cost efficiency benefits of applying CLOC designed principles are clear: their implementation leads to the reduction of unnecessary steps in the legal operations function. Eliminating redundant elements of the process, while covering all necessary bases, reduces costs and optimizes productivity. Streamlining operations also offers the systematization of project planning and decision-making throughout an organization. Governance practices that are fully implemented also offer organizations improved oversight and accountability across outside vendor pricing and performance management. Procedural control enables legal departments to ensure compliance with goals and objectives across all verticals, with confidence that all stakeholders understand their responsibilities and limitations. Additionally, CLOC principles serve to standardize best practices across the board through the implementation of modernized practices, such as the use of e-billing systems and matter management systems and corresponding data analytics to optimize the management of budgeting and forecasting. The data sets drive important decision-making opportunities that will bolster results in the short- and long-term across all specialties. By integrating CLOC principles, organizations are able to not only transform the legal operations department, but they can enhance product and service quality, as well. In-house corporate counsel will be able to monitor performance from start to finish and improve their response to problems, while performance metrics will offer insight into efficiencies and obstacles and help identify areas for continuous improvement.
Legal Operations and Technology Tools
Technology plays a central role in most areas of business. Human Resources leverages online payroll and benefits management tools, and Marketing relies on this or that customer engagement platform to optimize its campaigns. Lawyers themselves are clients of technology. They rely on a multitude of technology solutions to deliver their services, meet their professional obligations and serve the interests of clients.
So it probably won’t come as a surprise that technology is an important component of legal operations. Among other things, CLOC’s Core Competency model identifies Technology and Process as two of its high-level categories, comprised of a total of 11 sub-categories, each dedicated to specific aspects of ‘tools and technologies’ to be utilized by legal operations managers in the field. Together, they form the focus of what CLOC designates as the ‘practice stream’ in the ‘legal service delivery model’, which breaks down legal operations into four practice streams, the other three being Finance, Governance/Risk/Compliance and IT.
At a high level, CLOC describes the Technology and Process practice stream as follows: ‘The role of the legal ops professional is to identify, procure, implement & maintain . . . the tools, technology, and processes that increase the efficiency and effectiveness with which the legal department provides legal services.’ When taken with the description of the Finance practice stream, Technology and Process can be seen as a ‘scientific’ contra-balance to the ‘artistic’ qualities of the Governance/Risk/Compliance and IT practice streams. In other words, a law department’s ability to manage risk and compliance, and its IT, in-house and outsourced, can just as likely be enhanced by a detailed assessment of legal operations, measuring and tracking specific indicators aimed at optimizing its processes and procedures, as a carefully considered implementation and management of the latest and greatest technology hardware and software solutions.
As per CLOC’s Legal Operations Maturity Model, there is no discrete category of ‘tools and technologies’ as such. Still, there is no denying that a law department’s use of technology has always been, and will continue to be, an important element of legal operations. Products of different types and from different vendors have been deployed for many years to help legal departments provide better, faster and cheaper legal services. The products mentioned in the previous paragraph are but a few of those that appear on a longer list that could include, among other solutions, e-billing and matter management tools, document automation tools and websites focused on the review and processing of e-documents, data collection, processing, review, analysis, and e-discovery tools, cloud-based solutions and enterprise content management systems, and collaborative platforms and systems designed to facilitate communication and coordination between engineers, scientists, doctors, lawyers, and other professionals.
Challenges and Best Practices for CLOC Application
Implementing CLOC guidelines and best practices can be daunting for many legal departments. One of the most significant hurdles comes in the form of the dreaded culture shift. Legal departments that have operated ineffectively and inefficiently for decades are suddenly faced with new expectations. Their charters no longer include the comfort and familiarities of its past. This culture shift doesn’t seem a natural fit. Whichever way it happens, this is a reality that legal departments are going to have to endure. The simple fact that a company has incorporated CLOC’s principles signifies the beginning of significant changes.
Resistance to change isn’t the only challenge legal departments face in adopting CLOC guidelines. Despite the fact that it is a full year into implementment, some companies might still be skeptical about giving personal information to a software company. There are also some who find the idea of lawyers becoming technology experts daunting. While concerns of privacy and the quality of legal services are valid, they are manageable. That said, there are plenty of practical solutions to both of these problems.
Resistance to change. Change isn’t easy. Most of us are set in our ways. To a certain extent we don’t want to change our routines. Some of us fear the unknown. The problem with "business as usual" is that it creates mediocrity. To stifle change is to stifle growth. The first thing to remember is that change doesn’t happen over night. It takes time. The extent to which it happens depends on the amount of effort poured into the process. The second thing to remember is that when you embrace change and work ambitiously towards it, it becomes a shared goal. When this happens, it stops being an individual battle. Instead it becomes something you and your colleagues can fight together.
Flexible Law requires two things: a willingness to try something new and the patience to see how things unfold. Technology provides a radical change. But this change is a means of achieving time management. It allows for a department to become productive again. While lawyers may be reluctant to become tech-savvy , they will have to adapt. Undeniably, emotions must be set aside. Those who can embrace flexibility will succeed.
Privacy Concerns. As professionals, lawyers handle a great deal of personal and confidential information. The idea of complying with CLOC principles and implementing new software initially raises concerns about security. This comes as no surprise seeing as the legal industry quickly abandoned some of their "old methods." In keeping up with the modernised world, though, CLOC members understood that some of their colleagues were skeptical of this new embrace of technology. That is why they have ensured that security and privacy provisions would be put in place. Data privacy and security is addressed by several cloud software systems. A secure environment, reliability and data governance are the forefront of this process. The reality is that these cloud software systems signed off on some of the leading security assurance standards available. They also have the support of GDPR, CCPA and WBCSB standards. So while there may be concerns about what happens to a company’s data, the truth is that CLOC members are more than likely to be handling data of other CLOC members. Therefore, the systems that are put in place between them guarantee that privacy and security are taken seriously.
CLOC was designed to invigorate the legal profession. They are well aware of the skepticism and reluctance to adapt to new technologies. They did not ignore this, and focused on security and legislative compliance in implementing the new changes. Members of the legal profession might very well be overstimulated in a modern tech world. Shifting from an old routine to a new one may seem overwhelming at times. However, integrating the CLOC principles have been made easy by the cloud software systems. Tools such as document management systems, e-billing and matter management support make the transition smoother.
Future Directions for CLOC and Legal Operations
"From my perspective, the increasing use of artificial intelligence and analytics will not replace the human element, but it will reduce the number of hours teams spend on lower-level work," says Tanya Epstein, former Managing Director of Legal Operations at Citi. "Legal Operations was first about efficiency and processes, clearing out the low-hanging fruit of the last generation. That work is still ongoing and will continue for years. But now the next wave of legal operations will be about the analytical aspects of practice. It will be about moving our teams to higher-value work that requires more critical thinking, more analysis and more added value to the business."
Many of the traditional hierarchies in both law firms and corporations are upside down with a more team-oriented legal department. This team approach is challenging the traditional pecking order of "who knows best." In-house lawyers are no longer saying, "I am the expert," and partners are no longer saying, "I have been practicing law for thirty years." The new experts are able to produce value-added research that has uncovered issues that other teams have missed. Teams are made up of lawyers, legal project managers, Wikipedia of law, legal engineers, paralegals, artificial intelligence trainers, data scientists, cyber security experts, pricing specialists, outside counsel spend managers and many other highly specialized team members. As legal operations professionals move up in the hierarchy of the corporate and law firm structure they will be managing these teams and leading these increasingly more complex projects and assignments.
Robust metrics and satisfaction goals still rule the day. However, there is a greater emphasis on continuous improvement and innovation through the use of predictive analytics, benchmarking and value metrics. There is also a trend toward the use of competitive incentives that have been shown to contribute to more rapid improvement in both cost savings and effectiveness.
Along with the goal of building a more collaborative and cohesive relationship with clients, CLOC’s emphasis on expanding its worldwide network allows its members greater flexibility and agility to react to changing marketplace demands and competition. A sustainable advantage for the long haul.
The demographic divide continues to decrease although it is still a challenge for CLOC and CLO’s around the world, according to Tonita Palmer, Senior Vice President & Chief Legal Officer for Bright Horizons. "There are not enough women, minorities and diverse backgrounds," says Palmer. "We need to continue to focus on diversity because it is good for the economics and good for society in general. Looking at how we can advance diversity in-house and at law firms is critical. We can make a case for building in diversity because it has been proven to make for better decision making. And the younger people, the millennial’s, expect this from their employers. They have a voice and they expect that voice to be heard."
Corporate law departments are focusing on newer specialty practice areas, in-house diversity, knowledge management, tech-savvy lawyers, and robust training programs for all legal support professionals.
The legal industry is shifting away from the traditional top-down model and will seek to embrace alternative dispute resolution (ADR) strategies as a substitution for litigation. "It is important that we look for different approaches other than lawsuits: mediation and arbitration are a couple of examples," Palmer explains. "Lawyers have a role to play because we need to see this as an opportunity for the legal profession and put forth ideas that help our clients save costs."
Conclusion: The Impact of CLOC on Legal Operations
The Corporate Legal Operations Consortium, or CLOC as it is commonly referred to, plays an instrumental role in driving innovation and best practices in the field of legal operations. Through its focus on asking the tough questions and testing existing paradigms, CLOC spurs its membership to constantly reexamine how they can improve the legal operations function . It is this honest, open approach to problem solving that helps CLOC lead the way in helping legal departments to lower their operating costs while increasing the quality of service. For any modern legal department seeking operational and technological excellence, consistent alignment with CLOC’s strategies is a requirement for success.