Question: that way

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Aug 05th 2012 14:40 question
I am reading a book written about phrasal verbs, which is one of my difficulties in English. I learned the word “to set out,” which means “to leave on a journey.”
I have another question.

We should set out before lunch, that way we'll miss the traffic.

I understand almost of the meaning, but I’m not sure how the phrase “that way” works in this sentence. The first part of the sentence means we should leave home before lunch and the second part of it means we will miss the bus or the train, so I assume I can exchange “that way” to “or.”

Get up early, or you’ll miss the train.

Does this “that way” often use in conversations?