To maximize efficiency, productivity, and predictability, there is little of more value to an in-house lawyer than written policies and standard operating procedures (“SOPs”). They serve as a foundational framework that guides decision-making, ensures consistency, and helps manage risk effectively. Policies and SOPs help in-house lawyers protect the company and enhance operational effectiveness. Below we go deeper into the benefits of SOPs and, more importantly, how to create them.
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Background
There is a classic example of the value of SOPs whereby a manager asks each member of her team to write out how to “make toast.” One employee starts with putting bread in the toaster, another starts with buying the bread, yet another starts with picking which type of bread to buy, and so on. The point is that while you may think something is crystal clear to your team, this is not always the case, and people can have widely varied understandings and methods of completing any given task, no matter how simple.
An SOP solves this problem because it sets out (in a step-by-step fashion) a list of instructions that guides the user on how to complete the task at hand. This helps ensure that any given task is completed the same way each time by the team.
Why they are so valuable
It is hard to enhance productivity in the legal department if everyone is doing things in their own particular manner. Typically, things are better if everyone is doing things the same way every time. SOPs solve this problem:
- Standardization and consistency – repeatable tasks are done in the same manner every time and everyone knows what is expected and what to expect.
- Error and risk reduction – a set of instructions on how to accomplish a task or what to do when a triggering event occurs reduces costs and the chances of mistakes.
- Increased productivity – everyone doing critical tasks in the same way each time and every time increases and enhances productivity for the individual and the department overall.
- Training and knowledge transfer – SOPs assist in onboarding, training, and the transfer of critical knowledge vs. the usual “oral history” of how things are done that most legal departments embrace).
- More effective delegation – many in-house lawyers are reluctant to delegate because they do not believe the task will get done correctly. SOPs solve that problem, i.e., just follow the process.
- Stress reduction – we all become more confident in our work when we have a process to follow. This reduces the stress we all feel in the rocket-fast world of practicing law as an in-house lawyer).
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How do you create one?
To start, your SOP will be much better if you seek out and get the input of others. This will ensure that you are thinking of all the steps that you must document in the SOP. Second, it helps make certain that the SOP makes sense to different audiences.
When it is time to put pen to paper, take your time and think through each step in the process you are trying to document. Start by simply walking through everything you would do to handle the process at hand and write down each step (e.g., the tasks you must complete post-board of directors meeting). It’s easier to start SOPs in real time, i.e., when a process ripe for an SOP lands on your desk, document the steps you are taking as you work.
When creating your SOP, here are some core elements common to all:
- Title
- Purpose
- Definitions/acronyms (if any)
- Version/date
- Procedures/list of steps
- Visuals (if any, e.g., screenshots)
- List of required resources (passwords, links, contacts, etc.)
- List of attachments (if any)
- Person responsible for maintaining the SOP
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What’s the right level of detail?
Start with the plan to set out the least amount of detail possible. The more complicated you make the SOP, the less useful it will be. The most common way to document a process is via a linear list of steps. Keeping the end user in mind, consider the level of detail needed. If you are writing a SOP for yourself or a group of experts in the legal department, you will need less detail. If you are writing the list for someone else, more detail is better.
A simple SOP consists of a series of high-level steps, versus what is known as a “hierarchical” SOP, i.e., high-level steps with detailed sub-steps. Regardless, for either, do the following:
- organize it logically,
- keep it simple,
- use the active voice,
- be clear and concise – with no doubt about what is needed for each step, and
- make it “user-friendly,” – easy to read/follow, tick boxes to cross off items as completed, screenshots, charts, etc.
Here are two partial SOPs for contract review to demonstrate the above. The first is a high-level simple SOP and the second is a hierarchical SOP:
Contract review SOP
- Has mutual indemnity provision.
- Has confidentiality provision.
- Has limitation of liability provision.
- Excludes consequential and punitive damages.
- No arbitration clause.
- Invoices are paid within 30 days.
- Choice of law is New York.
If the SOP is just for you for example, then this level of detail is highly effective in terms of reminding you to check issues you are well versed in. But, if someone is new to the legal department, it may be too basic to ensure they can spot contract issues the company cares about. Here is a portion of the same SOP set out in hierarchical style:
Contract review SOP
- Choice of law is New York.
- We will accept Delaware.
- We will not accept California.
- If there is an issue, consult with managing attorney regarding acceptance of different jurisdiction.
- Ensure costs and attorneys’ fees are recoverable by prevailing party.
- We will accept waiver of jury trial.
- We will accept exclusive venue in New York or Delaware. Any other jurisdiction requires approval of managing attorney.
- The second version is much more detailed. It also lends itself nicely in the event you need to outsource contract review to outside counsel, as they can easily follow the company’s expectations without a lot of back and forth with you or your team.
What tasks lend themselves best to creating SOPs?
If you don’t already have a list of tasks ripe for legal department SOPs, start with:
- Contracts and Approvals: Standard contract templates and approval processes.
- Compliance: Policies for anti-bribery (FCPA), data privacy (GDPR, CCPA), and workplace conduct.
- Litigation Management: Procedures for responding to subpoenas, lawsuits, and internal investigations.
- Intellectual Property: Guidelines for protecting trademarks, patents, and copyrights.
- Employment: Policies on hiring, termination, and workplace harassment.
- Crisis Management: Plans for handling emergencies such as data breaches or public relations issues.
The latter two will likely be shared with groups outside of the legal department, so keep that top of mind when drafting.
Final thoughts
An SOP isn’t very good if it fails in its essential purpose. It is important to test it at the first opportunity to make sure it captures all necessary steps, is easy to use, and so forth. Testing is more complicated for a lengthy SOP, like a data breach or for crisis response. First, SOPs covering such rare events are likely multipage and filled with detail so there is a level of complexity present that is not found in a simple one or two-page SOP. Second, complex SOPs often involve a lot of people, usually at the higher levels of the company. This means that you will need to run a simulation or “tabletop” exercise and get senior management to participate in the exercise.
In addition to testing, set a time frame for regular review and updates for all SOPs. Some updating will occur over the normal course of business as users make adjustments and tweaks, but at least once per year, you should go through all the SOPs used by the legal departmentto ensure they stay current and useful.
As you can see, SOPs are fairly straightforward to prepare. They can give you confidence that you have not overlooked anything important when it comes to completing key tasks or, better yet, that you can delegate work and know that it will get done correctly. If you have access to Practical Law, you have hundreds of SOPs, policies, and checklists available to you that you can use “as is” or customize to your needs.
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