The Essential Skills of an LDO Leader: Successful operations executives fuse talent, tact, and technical ability

Friday, November 4, 2016 - 13:14

Deciding to hire a legal department operations executive seems like a no-brainer for general counsel who want to transform the way their teams deliver services to clients. Unfortunately for those GCs, that’s where the easy part ends. There’s rarely anything simple about finding the right person for the legal department operations (LDO) role.

The operations leader must be a diplomat, technologist, project manager, budget guru, skilled herder of vendors, and explainer-in-chief to employees inside and outside the department. Oh, and they should know a thing or two about the law and lawyers, too. The best operations executives are a general counsel’s eyes and ears, keeping confidences, sharing information, and anticipating the department’s needs.

“Each year, this role becomes more elevated, complex, essential, and broader in scope,” says Connie Brenton, Senior Director of Legal Operations and Chief of Staff at NetApp Inc. “It has become a harder and harder role to fill. That’s in part because it’s a new role, with essentially no hiring pipeline.”

In my last two columns, I explored how Brenton’s company has reimagined its legal department, using best-in-class technology and metrics to drive efficiency and internal and external client satisfaction. Those efforts have been led by General Counsel Matthew Fawcett and Brenton, who was the first hire Fawcett made when he joined NetApp in 2010. Brenton has worked closely with Fawcett to craft and successfully implement the company’s transformation strategy.

In this, the third installment about legal department transformation, I wanted to take a much closer look at the LDO role. As Brenton points out, the legal department operations position is still relatively new in most legal departments. And hiring for it raises several fundamental questions for GCs. What is the right experience profile for the job? Which competencies are most important? How does the role fit into the department’s organizational structure? How much authority should it have, and how should the role be compensated?

I spoke again with Brenton, along with two other highly respected legal operations trailblazers: Jeffrey Franke, Chief of Staff to the General Counsel and Senior Director of Global Legal Operations at Yahoo, and Mary O’Carroll, Head of Legal Operations, Technology and Strategy at Google. Brenton, Franke and O’Carroll are also part of the leadership team of the Corporate Legal Operations Consortium (CLOC), the recently formed organization for legal department operations professionals.

Brenton, Franke and O’Carroll say that having a deep understanding of lawyers and how they work is just one piece of the legal operations puzzle. To succeed, LDO executives also require strong financial and technology backgrounds. “To do this job well, you must have financial acumen, as well as an interest and passion for implementing and assessing technology,” O’Carroll says. “Project management is another important skill – you may have 10 ongoing projects on which you have to execute. And, of course, you also need a strong understanding of the legal industry.”

Franke adds: “When it comes to the ideal educational background for this role, I think there are three knowledge bases that are most common and helpful. We regularly see leaders with J.D.s, M.B.A.s, or Finance and IT professionals. The J.D. helps with negotiating and optimizing legal support models; the M.B.A. helps with strategic planning and financial management; and the IT background helps you define needed systems solutions. Those three form the triumvirate of an ideal background.”

That said, being an attorney isn’t a prerequisite for the job – provided one has operational expertise and a deep understanding of the way lawyers work. O’Carroll, for instance, spent five years leading profitability analysis efforts for Orrick, Herrington & Sutcliffe before joining Google. But, she says, “I’m not a lawyer. I have more of a business, finance and consulting background.”

While having a law degree isn’t a necessity, strong communication and diplomatic skills are. In fact, the success of a legal department transformation effort may hinge on an LDO's ability to influence the way people think about technology and process improvement. Says Franke: “It’s important to have really strong EQ (emotional quotient or emotional intelligence) to be able to read people and to interact differently with different people. This role requires leadership skills and a great deal of intestinal fortitude. You have to have a great deal of equanimity.”

Brenton says that operational changes are “almost always the most difficult for people in the legal department who not reporting to you, and some of the people affected aren’t in your department at all.” A business or sales team will push back over new processes or technologies in a very different way than the legal team. “You need to understand and anticipate the different reactions. Change is disruptive, and it can feel threatening. So your influencing skills need to be wide and deep.”

Not surprisingly, the ability to effectively communicate is one of the competencies that CLOC says is crucial for a legal operations manager. CLOC has developed a 12-point list of core competencies that they recommend for LDO professionals. They include: strategic planning; financial management; vendor management; data analytics; technology support; alternative support models (such as legal process outsourcing); knowledge management; professional development and team building; communications; global data governance and records management; litigation support; and cross-functional alignment (building effective relationships across a company). (For fuller descriptions of each core competency, visit www.cloc.org.)

CLOC’s list is designed to help an operations chief approach running the legal department like a business. As more major companies bring more work in-house and the size of legal operations increase, “you’re running a law firm within a corporation,” Franke says. “In [O’Carroll’s] case, there are 600-plus people [on Google’s legal team]. Some departments have 1,500. That’s a major business within a business. You need to recognize that and run it accordingly.”

Managing a department in a more business-savvy fashion means making choices about which matters require hands-on effort from highly trained in-house lawyers. The lower the risk to the company, the more likely the matter can be handled by technology or by outsourcing to a vendor. “The allocation of risk is critical,” Brenton says. “High-risk matters are about 20 percent of the work we do. The rest is medium-to-low risk. But the model for most departments is high-risk, high-touch for almost everything.”

An operations executive can help change that costly and inefficient model – provided the person has the mandate to do so. But in hiring for the role, general counsel sometimes make a critical error: “They can scope the role too narrowly, placing it below other direct reports and crippling the ability of the individual to do the work,” Franke says. “This position needs to be the alter ego of GC, and it has to be seen that way by the team. It’s not equal to the GC, but it is first among equals on the GC’s staff.”

Companies can also fail to pay properly, making the position more junior than it should be given the scope of responsibilities and the stakes involved. “You get what you pay for,” O’Carroll says. “This is a position that pays for itself. It’s not a role to skimp on. It’s worth every penny.”

A properly compensated and empowered LDO leader should be the general counsel’s right hand and trusted advisor on everything from financial to personnel matters. The two should be able to work closely together and confide in each other. “The GC and the person in this role really need to click,” Brenton says. “This role has to have chemistry with the GC more than any other role.” And as any scientist can attest, transformation is only possible with the right chemistry.