As the retail space becomes increasingly complex, more and more retailers are turning to legal operations to safeguard their business from costly mishaps.
How can Legal Operations help?
Legal Operations act as a middleman between the business and its stakeholders, to function within the business and ultimately optimise its people, process and technology to provide efficient operations. This is particularly important for retailers who dabble in a wide variety of matters and thereby leave themselves vulnerable in relation to wide variety of blind spots, whether that is in commercial contracts or lease renewals. Legal Operations can function as a safety net to minimise risk and prevent avoidable and costly delays in your business objectives.
While Legal Operations provide a holistic benefit to the business, it is also particularly relevant to retailers in the following areas:
1. Preventing Unwanted Contract Renewals
As a business owner, contracts are a large part of business and messy contract management can result in time consuming and costly outcomes. For example, suppliers may include automatic renewal clauses in your standard terms and conditions which, if overlooked, can lock you into an unnecessary and unwanted arrangement. Therefore, having legal operations in place, both monitoring the terms of your contracts and negotiating a better outcome when needed, can be an essential part of running an effective business.
2. Due Diligence
The retail world is fast moving it can be hard to balance the need for acting on exciting opportunities whilst managing hidden risks. Due Diligence is an essential step that should be undertaken prior to purchasing a business or a brand. This process is vital to ensure that you are aware of all of the companies’ obligations, to make an informed business decision.
For example, a retailer acquiring a brand would need to ensure that, when all is said and done, that they have acquired exactly the items which are important to the acquisition. While it may cheaper and easier to perform rudimentary due diligence checks, it is surprisingly common for seemingly minor mistakes to invalidate agreements when due processes and not followed – for example forgetting to do a simple PPSR check could undermine your entire transaction.
Legal operations can ensure that these matters are covered off efficiently. Therefore, you may wish to consider how your business can utilise legal processes to manage any due diligence as well as your day to day contract signing process to promote compliance.
3. Data Room (not just for due diligence!)
In the current technological climate, data is essential to running a business. A data room is a secure online catalogue of information and documents which can allow businesses to create an ‘online warehouse’ for their data. Generally, these are associated with due diligence and litigation. However, they can be great as a day to day tool for your business.
Whilst it is true that a well organised data room can leave a strong first impression in investor meetings, a data room will also enable you to demonstrate an organised and efficient workplace and provide evidence that you have ongoing relationships with parties such as your suppliers, distributors and customers.
Further, it is frequently used to keep track of agreements, expiry dates and to set reminders for key dates in agreements. Needless to say, this can provide a more cost-efficient and virtualised option to protect your interests and collaborate without the need for a single physical location.
Overall, the importance of legal operations is that of security and peace of mind. You can focus on managing the busyness of growing sales and running the day to day of a business while legal operations can ensure nothing slips through the cracks. Having legal operations in place promotes an efficient and risk-free practice and allows you to get on the front foot when planning and managing the business.