Quick, name an industry with high demand for legal counsel. Chances are, manufacturing isn’t the first that comes to mind.
Manufacturing may not immediately stand out as an industry requiring increased and complex legal guidance and support, but a highly dynamic global business climate is changing that. Increasingly diverse and intricate supply chains, complex contract management, the global flow of data, jurisdictional differences pertaining to physical locations and supply chains, global regulatory compliance requirements, and numerous other legal obligations come with a torrential downpour of challenges — particularly for manufacturing and distribution organizations. For many, it’s hard for their legal departments to keep pace, particularly in light of pandemic and economic pressures that often result in contentious and costly litigation over the terms of global contracts.
The demands on legal resources within these companies — general counsel, department attorneys, paralegals, administrative support and more — typically exceed their bandwidth and frequently their areas of expertise. Certain industry-specific events and trends add further fuel to the fire: a demanding and dynamic regulatory environment, rampant cybersecurity threats, obligatory flow-down privacy requirements to the vendor ecosystem, global expansion and digital supply chains. Mitigating the risk of failure to meet deadlines for critical legal projects increasingly requires access to qualified resources and the right legal experience and knowledge.
Abundant industry issues overwhelm
The manufacturing and distribution industry wrestles with special circumstances that heighten the need for legal support. Global expansion and multiple locations across countries, with each location often having different, isolated systems, make it more challenging to manage legal demands, contractual obligations and the data that accompanies each of those points. In addition, as data crosses jurisdictions, local rules complicate companies’ abilities to comply.
Digitized supply chains also make it difficult for general counsel to keep tabs on the safeguarding and whereabouts of data as it traverses multiple, geographically scattered networks. Challenges come with establishing an agile and transparent data privacy supply chain to vet participants and ensure compliance with international labor laws. And, unfortunately, the ongoing pandemic has only magnified these challenges.
Technological advances such as the Internet of Things (IoT) further complicate the legal environment and increase the organization’s risk profile from a legal perspective. Cybersecurity measures for the IoT require sophistication as the IoT heightens legal obligations and makes it more challenging to manage risk.
For swift access and expertise, manufacturers must pivot
Optimizing legal resources is a must — but what’s the best approach? One option is hiring more full-time legal staff. But the competition for legal talent remains fierce — and for manufacturing and distribution organizations that typically are not situated in popular locales to live (for example, urban regions), attracting talent can be even more tricky.
A second option is retaining an external law firm to manage legal demands. However, doing so comes with extensive long-term investment and can be cost-prohibitive relative to overall demand that fluctuates over time.
Manufacturing and distribution companies need access, often rapidly, to legal resources that are within budget and right-sized for the specific expertise needed. There is a third option that might be an ideal solution.
Alternative legal services – a right-sized solution
A right-sized, just-in-time legal solution could be the best approach for manufacturing and distribution organizations. Alternative legal services — such as a managed services model — offer the right legal expertise at the right time and within a defined budget. This approach delivers swift, on-demand legal help while bringing bandwidth and proficiency to identifying the physical location of legal documents (including contracts), centralizing them in an accessible location, and managing data mining and data discovery. Alternative legal services also alleviate the pressure of hiring full-time staff or retaining law firms that may not fit the bill for transient or sudden legal needs.
Across most industries, demand for these types of services has seen a marked increase, with spend on alternative legal services providers now approaching $25 billion — an increase of more than 10 times over the last 20 years, according to our research.
Among the specific needs addressed, alternative legal solutions can help global manufacturing and distribution organizations define and manage compliance programs for legal and regulatory requirements — including the General Data Protection Regulation, the California Consumer Privacy Act (and the updated California Privacy Protection Act), the Health Insurance Portability and Accountability Act, and other privacy laws and regulations. These companies can quickly access expertise in translating legal requirements, standards and guidelines into risk-adjusted operational frameworks, policies and procedures to ensure comprehensive compliance. Choosing an experienced provider that knows how to support compliance professionals and legal counsel with data privacy and security expertise is key — it results in improved controls and processes for more secure systems and information.
Among other needs addressed and benefits delivered, an alternative legal solution:
- Thoroughly analyzes, classifies and monitors legal spend and related expenses.
- Understands and adheres to spend approvals and models (delegated versus centralized).
- Reviews spend policies compared to actual practices.
- Identifies, prioritizes and socializes key opportunities for cost savings, process efficiency and cost avoidance and creates business cases for each opportunity.
- Develops an execution road map and detailed plans for each project.
- Builds an optimized operating model and framework.
- Designs and implements supporting infrastructure and resourcing.
Bottom line, the pressure for a manufacturer or distribution company is lifted as it benefits from increased data security, privacy and risk controls, and an improved internal customer experience while gaining just-in-time access to experienced attorneys, paralegals and legal support staff.
Embracing a flexible legal labor model
Manufacturing and distribution organizations are fatigued from the frenzy of reinventing the wheel with every legal need. It is time to tap into a flexible solution that provides cost transparency and predictability, minimizes business disruptions, and eliminates the chaos and uncertainty of finding and hiring staff. Organizations want to minimize the strain on their corporate legal departments, particularly as demands grow. An alternative legal model can deliver these benefits and enable these organizations to address a growing slate of legal demands.
