How to build a LEAN inhouse legal department using LegalTech

Published On : March 30, 2023

In today’s digital economy, Manufacturing has become a bit like trick or treating. Tricks such as supply chain interruptions and rapidly changing regulations in today’s dynamic business environment are keeping senior managements on edge. For ages now, Manufacturing is one sector that’s very familiar with adapting and moving into better processes. But, in the past decade or so, “Lean Management” and moving to “Industry 4.0” are huge industry disruptors that have happened over the past few years. Manufacturing companies with tedious, manual processes are being left in the past. But while the change is much needed, there is also associated risk that comes with it. Legal departments are in a position where they need to adapt and evolve as the company moves toward Industry 4.0, while also ensuring the company is protected when updating their processes. Let’s now look at the common issues legal departments in the manufacturing industry face while transitioning to the next step. We’ll explore a few extreme cases and point out areas where legal tech could have streamlined work.

Communicate, for God’s Sake!

Communication is one of the most valuable skills any individual or corporate can have. It keeps all stakeholders on the same page. For corporate legal, it gives both external and internal stakeholders visibility into the work that’s being done. Unfortunately, this wasn’t the case between two corporates, Rasta Imposta and Kangaroo Manufacturing. In the year 2017, New Jersey based costume manufacturer Rasta Imposta sued competitor Kangaroo Manufacturing based out of Arizona, for copyright infringement of their banana costumes. Yes, you heard that right! This case was litigated and went through appeal. The deep-down nuts and bolts of this case comes down to the following points:

Rasta and Yagoozon had a positive relationship for 6 years. But the complete lack of communication blew up when Kangaroo (founded by Yagoozon) made their own version of the costume. The legal fight lasted over 2 years. It cost both companies a lot of time and money. It quickly escalated into all-out war. Now, in a case like this, everyone loses. Both companies lost a lot of time and money when Yagoozon failed to notify Rasta, and therefore was in copyright breach. The breakdown of communication here resulted in a broken relationship and lost revenue. Kangaroo also took a hit to their reputation after they lost their case. Only if they had a standardized process to communicate, this case might have been avoidable.

The most important lesson to learn here is – Successful communication goes hand in hand with successful collaboration – everyone is always in sync, and on the same page.

Corporate Legal can be viewed as a bottleneck where things slow down. About 41% of enterprise employees noted that their in-house legal department’s transparency decreased after shifting to hybrid and remote work models. If you withhold information or can’t easily share relevant legal data with other business units, it automatically becomes difficult to achieve success together. Maybe, just maybe, had the two companies had a more open communication process, the relationship could have remained profitable and beneficial for both parties. The thousands of costumes sold by Kangaroo would still be on shelves today, with Rasta also receiving a profit from it, as they had with Yagoozon, without all the lost revenue associated with litigation.

Data transparency keeps all stakeholders aligned

Legal departments often need to refer back to previous cases. If all your data is spread out across multiple systems or buried in complex spreadsheets, you’ll have a hard time making your case. You may be under the impression that your fragmented system involving multiple programs and manual processes works just fine, and to be frank, you aren’t alone. Many legal departments hold onto legacy solutions because they’re worried about the time, effort, and money it will take to upgrade.

Have you ever heard anyone saying “I absolutely love repetitive administrative work!” ? You won’t, ever!!

And yet, office workers spend around 600 hours a year completing routine non-billable administrative tasks. But the truth is — these outdated systems are already wasting your time and money — 600 hours is nearly 14 full work-weeks spent on basic admin duties!

How can modern legal technology help?

The best legal tech automation software like Beveron’s Smart Legal Counsel for instance, pulls all your spend data into one central digital location — absolutely no manual uploading involved! You can then easily view, and sort data based on different criteria and categories, from monthly spend summaries to much more granular ones like “accruals vs. actuals” at the entity level. This ability to quickly dig into your financial activity with different levels of detail gives you more time for analysis. It also makes it easier to identify trends and opportunities to optimize spend. Best of all, you can generate reports with the click of a button. Modern LegalTech software integrates with existing applications like finance systems and time tracking software, and it automatically flags and adjusts billing guideline violations and incorrect matter codes from outside counsel. This reduces or even eliminates manual errors and duplicate data entry, giving you greater confidence in the accuracy of your reporting. Additionally, these platforms let you see who’s working on what in real time, so it’s much easier to collaborate and address any issues that come up.

How legal automation accelerates Industry 4.0

Best practices for manufacturers include leveraging technology to give visibility into the work all departments are doing within the organization. Legal should be the same. Automation can help your legal operations achieve the goals of Industry 4.0, expanding your ability to share predictive analytics for data-driven decisions and matching the pace of your organization’s growth in the industry. The legal risks within the manufacturing industry are immense. To keep track of everything regarding a legal matter, automation can save not only time and money, but your sanity. In a world where work is increasingly digitized, a legal technology solution like Smart Legal Counsel can help with all types of matters. Data can be tracked, shared, searched, and saved easily. You can even customize the levels of accessibility and keep what needs to be limited to a small group confidential.

In today’s dynamic and continually changing business environment, manufacturing legal operations need to be able to keep up. Intuitive software solutions make your data easily accessible to departments across your organization and the boardroom. This transparency makes it possible to drive competitive strategic decisions as your organization works towards Industry 4.0.