Retail hacks by Arricano: Digitalization in the legal department - between new KPIs and conservative counterarguments "why"
In his column for RAU, Vitalii Nevinchanyi, Director of the Legal Department of Arricano, shares his experience of introducing innovations into the work of his department, talks about the features of this process and the certain resistance that any innovations meet.
Change is always resisted, even in the most innovative and technological companies. "I wish you to live in an era of change" sounds more like a threat than a wish, and also causes various discussions about the legality and expediency of new transformations. That is, changes are both perceived and implemented with obstacles. Especially in conservative fields, such as law.
As Director of the Arricano Legal Department, my KPIs coincided with my personal goals to improve the efficiency of business processes and internal relationships between departments, so that at the end I get a high-quality document — quickly, on time and understandable to everyone. At the same time, it was necessary to counteract two "why" — why change something and why do we need additional funding, especially during the pandemic, when the priorities are cost-saving. As a result, the investment contributed to further resource savings, and the team was convinced of the effectiveness of this project.
We are talking about a successful collaboration with the Ukrainian IT company Axdraft. I will explain the essence of the program using a specific example.
Brief, split processes, complexity and error risks
Arricano, as a landlord of a network of shopping malls in Kyiv and the regions, respectively, works with hundreds of tenant partners, and needs to generate a large number of similar documents, for example, lease agreements.
Previously, the lease department, after negotiating with a potential tenant and reaching agreement on the main commercial terms (terms, rate, area, etc.), prepared a brief for the legal department to create a draft lease agreement (hereinafter the "brief").
In the future, the lawyer's task at this stage was actually mechanical work - to transfer the data from the brief to the draft contract. Such work, although it does not require much intellectual effort, is labor-intensive. Imagine how many times you need to insert the name of the counterparty: the title page, the preamble, in the details of the parties at the end of the contract, under each appendix, in the notary's certificate or the act of acceptance of the premises, etc. In addition to the complexity, do not forget about the famous "human factor" — while working through hundreds of contracts, it is not difficult to make a typo, miss small, but important, details.
What has changed
At the beginning of this year, we implemented new software, thanks to which the complexity of the lawyer's work at this stage was not just reduced, but reduced to zero. The rental manager is still preparing the brief, but now the data is automatically pulled up to the appropriate, pre-defined, places in the contract using the program. For example, by clicking on the name of the shopping mall, the program will automatically pull up and enter all the data related to the landlord and the shopping mall from the land plot numbers to the details of the power of attorney for the signatories. The same applies to contractors — after entering the code of the tenant's EDRPOU (national register of companies), the program checks the data in the state register and automatically pulls the name, location, and data about the signatory from it to all places in the contract and appendices where they occur in the text.
Thus, after filling out the brief, the rental manager receives a draft contract with all the appendices, which is proofread and ready for signing. Fast, on time, no mistakes. Isn't it magic?
Before starting IT
Of course, this was preceded by a thorough work with the template of the lease agreement, namely:
• audit and update of the contract, taking into account the latest judicial practice, personal and corporate experience of the rental, finance, operation, and marketing departments;
• structuring the contract into two parts: "immutable" (the contract itself) and "variable" (a separate application with all the important conditions);
• optimization (reduction of the volume of pages) of the contract by eliminating duplication, "dead points", repetitions of the law, etc. As a result, the contract became easier to understand and almost halved.
By the way, the term "Lease Agreement" was previously used more than 200 times. Taking away only one word "Lease", without losing the essence, the document became not only eco-friendly, but also significantly saved time for reading and checking for both parties.
Currently, the preparation of a draft lease agreement with all applications takes an average of 10 minutes and does not require the involvement of a lawyer. And this, in turn, frees up the resource for practicing law, not copywriting. We continue to work on filling the program with high-quality templates of other documents for other departments and processes of the company. Digitalization of business processes is always a difficult project, and innovation is urgently needed, which increases the efficiency of the company, frees up corporate intelligence for new goals and changes.
Author: Vitali Nevinchanyi, Director of the Legal Department of Arricano