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May 30, 2018

How CLOC is helping law firms to improve efficiency (Part 1 of 3)

By Tim Batdorf, Jim Hassett, and Ed Burke

How much do you know about CLOC, the Corporate Legal Operations Consortium?  If the answer is very little, and if you work at a law firm that cares about legal project management (LPM), you may be falling behind your competitors. 

As suggested by its name, the Corporate Legal Operations Consortium is primarily intended for in-house staff at corporate legal departments.  But a growing number of law firms are becoming involved with CLOC for both substantive reasons (to better understand what clients are looking for) and for marketing purposes (to improve communication with current clients and with potential new ones).

CLOC’s mission is to help legal operations professionals and other core corporate legal industry players (e.g. tech providers, law firms, LPOs, law schools, etc.) optimize the legal service delivery models needed by small, medium and large legal departments to support their clients.  As summarized on CLOC’s web page:

In a technology and data driven world, when business moves faster than ever, legal is totally out of step. Our industry has been frozen in time, slow to change.  We organize all players in the legal ecosystem to help reform and shape our industry.

CLOC’s influence has exploded in the last few years.  According to a recent Bloomberg Law interview with its founder Connie Brenton (chief of staff and senior director of legal operations at NetApp Inc.), CLOC started in 2010 as a small discussion group which, at that time, might have best been described as “an information book club” or perhaps as “therapy.”  In 2016 CLOC became a non-profit, and according to Brenton:

In two years we went from an informal group of 40 to nearly 1,400 legal operations professionals.  

That was in February.  More have joined since, and at the time of this writing, CLOC had approximately 1,500 members and over 750 member companies, including roughly 30% of the Fortune 500. CLOC membership represents 43 states in the US and 39 countries around the world, and member companies have an estimated combined external legal spend of over $40 billion.

CLOC’s growing influence on the legal profession can also be seen in the fact that attendance doubled at each of its first three US meetings: from about 500 participants in 2016, to 1,000 in 2017, and nearly 2,000 in 2018. 

Given those numbers, it is clear why law firms are increasingly involved with CLOC.  According to Melissa Prince, Ballard Spahr’s Chief Client Value Officer, the most important benefit of CLOC involvement is proactive communication. 

For years, clients and law firms have had the common goal of transforming the way legal work is done, but until CLOC they were not really talking to each other about it in any meaningful way.  The reality is there will never be any long-term change in the legal industry until clients and law firms really start talking to each other.  CLOC encourages us to tackle tough issues and to be brutally honest with each other about what isand more importantly what is not working.  This is exactly what we need in the legal industry.  

After attending CLOC’s meeting in Las Vegas last month, David Clark, LPM Partner at Lathrop Gage, noted that:

CLOC emphasizes how clients and their in-house legal departments want law firms to collaborate with them.   This runs counter to a common misconception in law firms that clients are just using things like LPM and alternative fee arrangements to drive down legal fees, without regard for the law firms which represent them.  Instead, most clients want to increase collaboration with their law firms through LPM and similar tools.  While it is true that these tools allow law firms to more efficiently and cost-effectively handle legal work, at the same time, clients are rewarding collaborating law firms by increasing the volume of their work and paying success fees.  CLOC helps law firms understand that implementing LPM can foster increased collaboration with clients, resulting in more value for clients and deeper engagement for the law firm.

CLOC conferences are designed primarily for in-house departments, and the first session at each conference  provides an overview of the 12 core competencies identified by CLOC and summarized in this graphic:

  CLOC_12_Competencies_Pic1 Pic1_Copyright

All remaining sessions at each conference describe how best to execute against those competencies.  According to Jeffrey Franke, Assistant General Counsel at Yahoo Inc. and a member of CLOC’s Leadership Team:

The core competencies are the reference model for achieving operational excellence by in-house legal teams.  Legal operations professionals, working with their GCs and legal leadership teams develop strategic and tactical plans to create service delivery models (in-house, law firm, LSO, and tech solutions) to deliver the right quality of legal support at the right cost by executing against those competencies.  Each core competency is comprised of several sub-core competencies.  Until CLOC created the 12 core competencies, there was no comprehensive definition of legal operations.

Typically, legal teams focus on the 12 core competencies in a clockwise fashion – representing CLOC's operational maturity model.  Franke estimates that 60% of legal departments operate primarily at the foundational level, 35% at the advanced level, and about 5% at the mature level.  Franke says there are similar, observable patterns in the way in which legal departments evolve over time:

The parallel to operational maturity and the core competencies is functional maturity: we've found that legal ops teams mature (grow in size, scope, talent, and reporting structure) in a similar way over time as legal departments understand what it takes to execute at the highest levels.

CLOC’s web page also lists a number of crowd-sourced initiatives based on the idea that:

When experts from across the legal ecosystem work together to take on the biggest challenges of our industry, almost anything is possible… The CLOC initiatives… each led by a CLOC member, draw on contributions from law firms, alternative legal providers, technology companies, and law schools.  The result – best in class solutions that shape the present and the future of our industry.

While some initiatives are of primary interest to in-house law departments (such as the “Legal Ops Career Skills Toolkit”), others are of substantial interest to law firms, starting with CLOC’s LPM initiative, which will be described in Part 2 of this series.

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