Wisconsin firms tap in to manufacturing comeback

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Legal teams evolving with industry

Two Wisconsin-based law firms are adopting new strategies to expand and better serve their manufacturing client bases to take advantage of the industry’s resurgence.

Milwaukee’s Foley & Lardner LLP and Michael Best & Friedrich LLP are reaching out to what have been dubbed “next generation manufacturers.” The term dates to when concerns arose in the public and private sectors that the U.S. no longer was a world leader in manufacturing.

In response, the National Science Foundation formed a study group called the “Next Generation Manufacturing Project,” which released a report in 1997 with projections for the future of manufacturing.

According to the report, next generation manufacturers needed to transform themselves into 21st century companies that included extended enterprises with multiple and ever-shifting business partners. Successful next generation manufacturers, the report concluded, must respond quickly to customer needs by rapidly producing customized, inexpensive and high-quality products in factories that can be reconfigured quickly to adapt to changing production.

A popular myth at the close of the 20th century and into the 2000s was that manufacturing in the U.S. was dead, said Jay Rothman, Foley’s chairman and CEO. U.S. manufacturing, he said, was not as vibrant as it had been, but it still played an important role in the economy.

“If you look at the number of people still employed in manufacturing during that period, it was a lot,” Rothman said. “What had happened, though, was there was a decline in employment, in part due to outsourcing of manufacturing to other locations primarily due to costs, but also to be closer to markets that are emerging.”

Brian Paul, who leads Michael Best’s 35-member Advanced Manufacturing team, said manufacturing in the U.S. “was forced in many ways to reinvent itself and forced to create efficiencies.”

U.S. manufacturing is undergoing a renaissance, Rothman said. Externally, there is the possibility the U.S. will be energy-independent within the next decade, there have been wage increases in Asia, and the cost of natural gas is low, he said. Furthermore, Rothman said, many manufacturers wish to regain more control, particularly regarding intellectual property, which does not have as much respect elsewhere in the world as it does in the U.S.

Then there is what Rothman called the “logistics challenge.”

“If you’ve got something on the boat from China, that’s great,” he said. “But if you needed it yesterday, you don’t have it.”

Internally, Rothman said, the idea of manufacturing is evolving. The industry, for instance, now includes the potential manufacturing of human organs and implants, he said.

New approaches

Both firms have started drawing from multiple practice areas to serve manufacturers.

Michael Best formed its Advanced Manufacturing practice group in 2011, and subsequently has formed such subsets as food and beverage, tool and die, agribusiness, industrial repowering, and vehicle and auto parts.

Foley recently launched “Legal Innovation Hub for NextGen,” a network of departments, industry teams and practice groups to help manufacturing. The hub offers think tanks, social-media platforms, blogs and roundtable discussions for clients to get legal and business advice relative to their industry. A key component of the hub will be client advisory boards for which the firm will partner with consultants, people from the academic field, government leaders and industry associations.

For example, Rothman said, the boards might discuss returning operations to the U.S., or they might work through how to use data to identify consumer trends to increasingly customize products while respecting privacy rights and being mindful of who owns the data.

Likewise, Paul said, Michael Best is building client-focused collaborations, tapping government agencies such as Occupational Safety and Health Administration or asking private-sector experts to give educational presentations. The firm developed a continuing legal education program for manufacturing executives and in-house counsel.

It’s all about becoming more of a business and legal advisor for manufacturing clients and learning more about their industries, Rothman and Paul said.

“As manufacturing is re-energized and reinvigorated,” Paul said, “they look for partners who are the same and who are business-minded. That’s the goal of our group: to become that business partner, providing business solutions and not compartmentalized legal answers.”