Legal Operations: The Key To Unlocking Business Success With Mike Haven

Made with speech-to-text software, so a few words may be off.

0:00You're listening to the Contract Heroes podcast, your one-stop shop for all things contract management. And now here are your hosts, Marc and Pepe. Hello, everyone, and welcome to another episode of Contract Heroes. Today, joining us is Mike Haven. He's the head of legal operations at Intel and also the president of CLOC. Before we flip things over to Pepe, Mike, first off, thanks for being here, and, uh, was hoping you could just give us a bit more information on your background and how you fell into this world of legal operations. Thanks, Marc. Uh, very nice to be here. I appreciate the invitation, and Pepe, really great to, to be here with you as well. I had an interesting start to my career in legal operations. I was a partner at a big law firm and met somebody who was a pioneer in the legal operations space sort of fortuitously, and we talked for a while and, and eventually I went to work with her at NetApp where she was pioneering a lot of the legal operations processes and initiatives that have become very commonplace today.

1:12So I got to learn from the best in the field of legal operations and then went out and did my own thing, starting up a legal operations function at the Gap and then got that off the ground and then moved over to Intel about three years ago. Oh, that's amazing. So well, this... We've been talking a lot, you know, like technology, legal operations, and then we want to go a little bit more into the business part, right, Mike? So there's, I mean, of course in the US and, uh, maybe some parts of, of Europe, legal ops have become, like, more known, but maybe in some other regions like, you know, Latin America, still something that is very new. There's a lot of associations like CLOC that is doing an amazing job, you know, like promoting all the legal operations and, and how it can help businesses and how to help guide to better business de-decisions. But for somebody that is just, like, starting to learn more, uh, about legal operations, like, can you give us some of your ideas on how legal ops help other departments to become more efficient in their operations with regards to legal?

2:22Other departments in the company other than legal? Yeah. Yeah. Correct. One of the coolest things about legal operations is its breadth of scope, not only relative to what we do in the various functional areas we cover, but also in terms of who we work with, the cross-functional nature of the role. Legal operations touches all of legal, and legal touches the entire company, and so logic would suggest that legal operations has the potential to positively impact the entire company. And in my experience, that logic has been confirmed. So at a high level, legal ops teams do several things to deliver that impact. We take routine, lower risk, lower complexity work off lawyers' plates through automation or right sourcing, which gives them more time to focus on the high value work for the business. And we create processes and implement technology that allows legal to be less of an obstacle and more of a business enabler. And based on the trust developed in part from that, we're able to help foster a culture where legal is perceived as a true business partner. So to drill down just a little bit on that, let's use contracts as an example. Contracts are legal in nature.

3:44They're legally enforceable agreements, and it stands to reason that legal should be involved. But how involved? You know, that depends on the risk tolerance, the policies, the processes, and the technology at play. Legal ops teams can use these tools to unclog the corporate pipes, to make it easier for the business to self-serve for some agreements, to reduce legal touch of lower risk, lower complexity agreements, and those doing that helps business move faster. So historically, legal departments have erred on the side of caution, probably spending more time on contract processes and review than is really needed, and with modern technology, that's becoming more and more true. So I think legal departments are trying to evolve with the times, but that evolution is moving slower than the development of the technology, so most legal departments are having a hard time catching up.

4:45And that's especially true and going to become increasingly true for the departments who do not have a legal operations function. So this is why now more than ever, legal operations is one of the most critical functions on the legal team. I've heard recently about a couple misguided companies reducing or eliminating legal ops staff due to hard economic times, which in my view is crazy. I feel they should be doing the exact opposite and doubling down on the things that will help the team continue to continuously improve client service across the enterprise with the same or fewer resources. So innovation is no longer something that will be required at some point in the future. It's no longer optional. We have to get more out of the resources allocated to us by the company to keep the business running and to absorb incremental business demand and to deliver results that directly impact the bottom line in a positive way, and CLM helps us do that.

5:47It enables scale by saving resource time and money while increasing deal velocity and margins and making shareholders happy. So that's why everyone loves contracting technology, even departments outside of legal. Yeah Sorry, that was a very long-winded answer. No, no, no, that was great. I, I think that was a, a great kind of segue into, you know, what my next question was going to be around just user adoption and, and gaining user adoption with these other departments. Like, how do you see, when you're rolling out a new CLM system, h- what is the role of, of legal ops from that capacity in, in trying to get those, those other departments to, you know, one, maybe they do have to work inside of the CLM, but I think for the most part, right, we want them to stay in whatever system they're, they're used to using. And how do you go about showing them and continuously improving those integrations to make sure that business is flowing hopefully faster than it was, you know, before the, the legal team has implemented that, that contract management system? Yeah. It's all about collaboration and bringing them into the fold at an early stage to help, you know, them be invested in it.

6:47You know, I think for the most part, the business wants to remove the legal obstacle to the extent it can. It w- the business wants to be able to move faster, and the business relishes the opportunity to do some self-service and agreements where possible, knowing that the risk or is perceived to be low in those particular agreements. So if you let them know that, you know, their deals will move faster, the revenue will come in faster, and this is how we're gonna do it, and it's not going to be a heavy lift for you, it's actually going to be easier for you because you're not going back and forth with legal on, on various points in the agreements, uh, or the agreements that can be self-served, that's something that they are happy about. So if you get them in there early and you make them a part of the process, success is much more likely to be had in the overall rollout of authoring in, in the business.

7:48And is that, I mean, in the same type of way when an organization s- realizes that they, they have a need for a, a CLM tool, should they go about that the same way, trying to get buy-in from those other departments? I mean, anything different that you would do there, you know, than obviously when you're rolling it out? Is, is, is there anything different to do to get them excited about trying to look for a CLM tool and probably going out and asking those other departments for budget because, you know, as we know and, and as these large organizations start to either need one or, or replace something that's a little bit simpler, these tools are starting to get a bit more expensive. I mean, what does, what does that look like? So typically, you try to involve everybody you can in the procurement process of the new technology, but, you know, that may not extend to all the various parts of the business that are going to be using the technology. So the people that are involved, you know, the legal operations people, the IT people, the probably some people from your procurement team, you know, who are involved in the selection of the CLM tool have to understand what the various processes in the company are for contracting or, you know, have an understanding of the roadmap that's going to get you to a new process for contracting so that when you're developing requirements for your technology, you're making sure that all of your unique concerns are addressed.

9:15So if you don't have the business people in that process, you've at least spoken with the people who are involved with those business people from your legal team so that you understand the, the general processes and requirements that you have to select the right tool. So that, that's very important. Sorry, there was a second part to your question, I think, Marc, wasn't there? No, yeah, and I think it was just, you know, how does that differ from working with, uh, departments when you've, once you've chosen a tool and getting the user adoption up, but I think you, you answered, you know, both parts of that question. Great. Yeah. And I was also thinking about that one way on how you can measure, like, the success on, on how you can promote especially li- like a tool li- like this is, is by using data, right? So you can know, like, I don't know, the data that you wanna have at hand is, like, how much time are you saving, how much cost are you saving, or how fast are, are you closing any other type of deals?

10:12And, and we've seen, like, a lot of legal departments especially are in the very early stages of identifying, sourcing, or working with data, right? And this is something that it, that needs to become, like, more important in order to start, you know, looking for a different CLM system or the first CLM system. And so, Mike, where I, I, I want to get here is, like, how can we surface data to the sales team, for example, or finance team, HR, or any other buy-ins to help guide business de- decision? Like, which kind of data can the legal ops, you know, like, share with the other departments in, in, in order to, you know, like, take better business decisions? So contracts are touch points between legal and the business, and through sound use of process and technology, legal can leverage the treasure trove of data in contracts to provide data insights to the business. At Intel, we have two separate groups in the legal operations team that work together toward that end.

11:16One is our information and contracting experience team, which among other things manages our sophisticated contracting program, and the other is our legal analytics and metrics program, which we call LAMP. That's our business intelligence team, and they collect, curate, and report data and metrics using beautiful dashboards. So the ICE and the LAMP team work together to surface that data for our colleagues and stakeholders. So I think it's really important that you have an infrastructure set up to do that, right? It's not something that people are likely to go find on their own. They... What I've experienced is they typically need somebody to provide it to them in some fashion, so we have a, a portal that they can access, and it-- we have lots of different data in real time depicted on dashboards that they can go look at that can help them. And then if we spot issues or trends or things that we think they would benefit from seeing, we can push it out to them, too.

12:18So it's really based on creating that infrastructure that allows you to Consistently provide business intelligence that impacts strategic decisions And it sounds like this is y- obviously something that's ongoing. Yeah And the tools that the team is using are... Is there any AI functionality in them to, to help them extract that data from, from the, the contracts that they're looking at, or is that a manual process? Both. We certainly have access to technology that helps extract metadata from, from our agreements, but we also, you know, if there are things that, you know, we specifically know that we want to do, you know, we can do it manually as well to the extent we need to. So ideally we would automate it across the board, and I think that's where we're all headed. Um, there's some great technology out there to help us do that.

13:11So ultimately it's, you're gonna be chatting with your contracts with like a ChatGPT type tool- Yeah... that allows you to ask your system a question, and it goes through all the contracts and gives you an answer, and that, that's already coming, so pretty exciting times. Yeah. Yeah. I mean, I think, you know, in the past couple of months it's, it's amazing to see just the advancements that organizations and, and software has already made based on, on ChatGPT. And do you think... I mean, what are your predictions there? I mean, how quickly do you think that that's gonna be something that's readi- readily available for, for customers to use? I mean, do you think that's months away or, or a year or two? It's months away, but I mean, we've already seen a couple of the major contracting players within the last month roll it out. Yep. Right? But, and it's a big but, you know, I think people are very skeptical, and rightfully so at this point, and so they will be guarded in their use of it. It's almost like a toy that we're playing with right now, and I don't know too many people who are willing to put their, you know, careers on the line based on something they get from one of these tools.

14:21But, you know, over time and, you know, as the tools improve, we will gain more and more confidence in them, and we will start to use them ubiquitously, and probably will have some comfort level in relying on them down the road. I don't know if we're there yet. Right. I would say that right now AI tools are more into enhancing search capabilities, so it's easier for you instead of using, like, roles to run filters for searching for specific information, now you can just ask, and w- with using natural language and then just go a little bit deeper on the information that you get on your contracts, right? So I think that it's also very important, right, for s- especially for people that are starting their research on those type of features in a CLM to know where to put their expectations. It's not just like some kind of robot that will give you and it will, it, it will tell you, you know, "This is a high-risk contract, so you should negotiate these terms." No, no, no. It's, it doesn't work like that.

15:19It's more like you can ask them for information that it's inside your contracts, and then you have to go with your, with, with your legal team to know if it's, that might represent a risk, right, to the company. Not like you're relying on gener- generative AI to take a business decision based on the information- Right... that you got on your contracts. It might help you get started down a path. You know, like, I've heard of lawyers using ChatGPT to, you know, start a brief or, you know, to get an initial draft of something they need to produce, and then using that as their, their starting point and going from there. That may be a better use for it right now. But again, over time, it's scary to think about what this technology's gonna be able to do. Right. And Mike, I have actually a question. This is from a friend of mine that I talked with him, like, a week ago. He's a, he's a general counsel in this startup. They're building very, very cool things with, you know, customers like Tesla, BMW.

16:18And he wants, right, to build the legal operations team, but he has no idea how to justify the investment with the CEO. And his question is, like, can you ask Mike, like, what kind of data or information- ... like, the CFO will like to have that the CLM system, for example, can issue or, or can create a report that will be useful for the financial department, which at the end is the one that approves the, this kind of budget. Well, that's a loaded question. I'd love to talk to him. You know, there's a lot of things that we could, we could help him with in terms of ROI on the legal operations role and function, and it goes way beyond contracts. But contracts is a good one, because it's very easy to understand how increasing deal velocity, reducing cycle time, can increase your bottom line. It's very easy to understand that.

17:22When revenue's coming in faster, you're going to make more money, and that's just an easy fact for any CFO or CEO to understand. So, you know, that's a good place to start, but there's a lot, there's a lot that we could do to help him make the case. And any other kind of, like, story or experience, because I was also thinking about, like, handling vendors, right? Like, how can you improve the performance of your vendors having that kind of data in a place? I mean, that's something that I can imagine. I mean, I could show, you know, just incredible numbers on how much money the organizations I've worked for have saved based on improving our external partner management processes, or by creating a very solid internal document and information management program, or creating a world-class legal analytics and metrics program, and what- Benefits you get that the executive leadership team gets when they are privy to all of the data and metrics that we can provide to help them make strategic business decisions. There's just so much within the purview of the legal operations function that helps add sound business principles to the management of the law department.

18:52And if you think about the law department, in many cases, you know, there are eight or nine figures of spend every year, and that's a big business in and of itself within a much bigger business. And if you think about that law department as its own standalone business, you need to apply sound business principles to the management of that business, just like you would any other business. And if you do that, the company's going to get way more bang for its buck on its legal spend. And if they look at their legal spend, i- it's not an insignificant number, you wanna do something about that. So, you know, it makes perfect sense to me because I've completely lost my objectivity, but if you give the CFO and the CEO the data and show them with data how much more efficient the legal department can be and how that actually can impact the business and help the company increase its bottom line, it's a compelling story. Yeah. You know, I think that's great, and I think those are definitely some, I mean, really good real-life use cases, right?

20:07That, Mike, I think you've seen as, as you've implemented tools to help uncover this, this type of data. And, you know, I'm curious, as far as, you know, obviously we see the trend in, in large organizations and small ones alike growing out these legal ops teams, but are you seeing an uptick in organizations also looking for someone to outsource this to? You know, like a managed service provider for, for legal ops? Is... Have you noticed any, any trends and uptick in that regard? Yeah, yeah. You know, so these businesses have been popping up. You know, uh, legal operations has become an industry of, in and of itself within a bigger industry. So there's the legal industry and there's the legal operations industry, which is really becoming a thing. And, and you're seeing a lot of businesses popping up in, in recent years that focus on helping primarily smaller departments that don't have the function or maybe just have one legal operations person to provide support for those departments and do the things that I was just describing a- and more.

21:15And, you know, that's a model. I... Typically, when you go external for services, you end up paying more than you would if you had a internal full-time employee. But there's probably, depending on the project, you know, there's probably a, a tipping point where it makes sense to hire somebody internally rather than go outside, but I think companies are getting a lot of value from these external legal operations teams that are helping with some of these things. Yeah, no, that's great. I, I definitely think we've noticed the- Mm-hmm... you know, the trending and upward direction as well. Well, Mike, this has been a, a fantastic conversation. I, I guess my last question is, you know, if you do have an organization out there that is looking to, to build out their legal ops role or looking to outsource, I mean, what are the first couple of things that, that they should focus on to start? Maybe what's the first couple of things they should get a handle on when building out this, this role?

22:09I would go to the CLOC Core 12 and take a look at all the various subject matter areas that can fall within the legal operations purview and prioritize them and pick, you know, a few things that the GC really thinks needs to be done, and go out and, and find somebody that can help you with those things. I mean, the market for legal operations professionals is starting to explode. You know, it was interesting for many years because there was just never anybody that had this particular experience. Like, you had to go get people from other areas and turn them into legal operations professionals. But now there are a lot of great legal operations professionals out on the market, and some people have... are better at some things than others. So I think it, like, the first thing the GC should do is look at her or his priorities and determine, you know, what type of hire they're looking for based on that.

23:13And then, you know, reach out to our, to our community. We're always-- One of the coolest things about this community is that we're always willing to help each other and help others who want to start building this function. So reach out to me, reach out to anybody in CLOC or in, you know, one of the various organizations that are focused on legal operations these days, and find an expert to, to help guide you through it. We're always very generous with our time, and so we're happy to help. Awesome. I think that's great. I, I definitely think that's a really good place to start, too. So Mike, this has been a fantastic conversation. Really appreciate you coming on to, to chat with us. And for everybody listening, we hope to have you back here soon for another episode of Contract Heroes. Thanks for having me, guys. Yeah. Pleasure. Take care. You guys.