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Applying Business Drivers to the Practice of Law Lessons learned from the DuPont legal model Remarks by Thomas L. Sager, Esquire Partner Jennifer K. Mailander Associate General Counsel

Starting with "why" Internal client drivers Legal process too complex Too much litigation – distracting Too expensive! Reactive approach Inefficiency due to lack of alignment and defined roles Resource intensive Little identification with business objectives

Cultural and structural transformation Challenge long held beliefs – why are we here. What could we be?. Relationship driven and leverage of external resources Continuous improvement Collaborative Key goal- proactively apply business discipline to practice of law

Implementation Begins with a vision But vision alone not enough Culture and relationships key – need to understand our partners wants and needs Right strategic partners who understand Collaboration vital

Verification code: DUP87 The DuPont Legal Model Framework within which in-house counsel and external providers have clearly defined roles and both understand our business objectives. We commit to achieve these creatively. Verification code: DUP87

Model elements Strategic partnering (foundation) Early case assessment (data driven) Alternative fees (financial incentives drive alignment) Strategic budgeting (dynamic process and project management) Technology (tools reinforce importance of collaboration) 350 law firms – 38 law firms 150 suppliers – 9 suppliers

Sustainable transformation Desire to improve- no sacred cows! Tone at top Informed decision via data not historical relationship Process- use of six sigma to improve ways we served the business Standardization BUT not at expense of creativity or professionalism NO ONE exempt Creative staffing via non-practicing lawyers and non- lawyers Segmentation and disaggregation critical Leverage learning and celebrate success.

Supplemental Materials Applying Business drivers to the practice of law Supplemental Materials

Thomas L. Sager, Esquire Partner The New Reality Remarks by Thomas L. Sager, Esquire Partner

“Committed to ZERO” Safety and Health Environmental Stewardship 2014 DuPont Core Values Safety and Health Environmental Stewardship Respect for People Highest Ethical Behavior “Committed to ZERO”

DuPont in 1802 DuPont in 2014 40 employees 1 site 1 country 1 product 12 customers $15,116 in sales (1804) 64,000 employees > 300 sites > 90 countries Hundreds of thousands of DuPont products and customers $35.7B in sales (2013) 12

DuPont’s First Outside Counsel Alexander Hamilton Outside counsel from 1802-1804. Died in 1804 duel with Aaron Burr; each using DuPont gun powder. Widely regarded as the father of the U.S. banking system (as we knew it).

DuPont’s First Outside Counsel Alexander Hamilton Outside counsel from 1802-1804. Died in 1804 duel with Aaron Burr; each using DuPont gun powder. Widely regarded as the father of the U.S. banking system (as we knew it). “Though widely regarded as a fine lawyer, Hamilton was selected as DuPont’s counsel primarily because he spoke the same language as the Company’s leaders.” (The History of DuPont Legal, Gamble, et al. 2003)

Aligning Strategies with Megatrends The Needs of the World Drive our Science Strategies… Grow production agriculture Photovoltaics & Biofuels Lightweighting vehicles Accelerate conversion to bio-based raw materials Accelerate innovation pipeline Strategic acquisitions Geographic expansion Increase local application development Drive further penetration Market Opportunities… More food Better food Alternative energy solutions Energy efficiency Renewably-sourced materials Workplace safety Personal protection Environmental sustainability Infrastructure Energy Materials applications customized for local markets Megatrends… Increasing Food Production Decreasing Dependence on Fossil Fuels Protecting People, Assets & the Environment Growth in Emerging Markets 15

Enablers Innovation Differential Management Productivity

DuPont Legal’s Evolution Phase 1. Creating the Vision & Selecting the Partners: “Convergence” Phase 2. Vision into Action: Creating the Model Phase 3. Action Into Results: Measuring Success Phase 4. An Era of New Leadership: Emergence of Practice Groups Phase 5. Global Convergence Phase 6. Power of Collaboration Phase 7. New Reality

Phase I

Law Firm Selection Process Traditional Law Firm Partnering Firm Participation National reputation Internal recommendation Primary Interaction One or two high profile, All firm members who will results-oriented partners handle DuPont account (emphasis on depth) Prior DuPont Positive Positive Experience Timing Usually Critical Not same urgency Duration Finite Long Term Scope of Work Project/Case Specific Broad Firm Participation

Law Firm Selection Process Traditional Law Firm Partnering Relationship Traditional Lawyer-Client Mutual financial success Drive efficiencies Leverage strengths Promote relationship Share risks Share rewards Share learnings Continuously improve Active client involvement Technology Not Critical Factor Critical Factor - Tool needed to achieve: Greater efficiency Better communication Increased cost savings

Phase II

The DuPont Legal Model ...A New Era Vision into Action Training/Retooling for DuPont Results - Strategic Partnering - Early Case Assessment - Strategic Budgeting - Alternative Fee Arrangements - Technology Application and Use

DuPont Primary Law Firms & Service Providers DTI Eversheds Fasken Martineau DuMoulin, LLP Glynn & Finley, LLP Gonzalez Calvillo, S.C. Kelly Law Registry Kilpatrick Townsend & Stockton LLP K&L Gates LLP Leader & Berkon LLP Lewis and Roca LLP Ballard Spahr LLP Bartlit Beck Herman Palenchar & Scott LLP Boies, Schiller & Flexner, LLP Cotten Schmidt & Abbott, L.L.P. Cravath, Swaine & Moore LLP Crosby Marketing Communications, Inc. Crowell & Moring, LLP Davis, Cedillo & Mendoza, Inc. Deloitte Financial Advisory Services LLP Dickinson Wright, PLLC Dickstein Shapiro LLP

DuPont Primary Law Firms & Service Providers Lewis, Rice & Fingersh, L.C. Lightfoot, Franklin & White, LLC Litigation Insights LRN® Corporation McGuireWoods LLP MehaffyWeber P.C. Morris James LLP MRC Murtha Cullina LLP Phillips Lytle LLP Porzio, Bromberg & Newman, P.C. Potter Anderson & Corroon LLP Ricoh Legal Schirrmeister Diaz-Arrastia Brem, LLP Schwabe, Williamson & Wyatt Shook, Hardy & Bacon L.L.P. Spilman, Thomas & Battle, PLLC Squire Sanders (US) L.L.P. Stites & Harbison, PLLC The Hornblower Firm Thomas Combs & Spann PLLC Wyatt, Tarrant & Combs, LLP

“The value of the relationship is defined by more than the next case.” Strategic Partnering “The value of the relationship is defined by more than the next case.”

Strategic Partnering Further savings Best in class working for us “Growing our business” Virtual law firm Technology payback Women and minorities representing us DuPont sole provider Competitive advantage Lower costs Increased efficiency Product differentiation “Growing their business” (referrals) Increased collaboration/sharing of work product Technology payback Reward and recognition

Early Case Assessment A process that is broadly used to quickly assess with limited information every litigation for the purpose of evaluating optimum strategies and actions for the Company.

Early Case Assessment Key Assumptions Litigation is a business problem Cycle time reduction Cost reduction and better results Not a “settle at any cost” mentality

Early Case Assessment Traditional Litigation Model Legal Problem Reactive Exhaustive “Black Hole” Early Case Assessment Business Problem Proactive Focused Meaningful Evaluation

Early Case Assessment Goals Cost savings cut cycle time effort commensurate with case needs Increased client participation and satisfaction active participants clients’ goals considered early and continually Improved lawyering more efficient more focused more responsive prudent risk-taking

Phase III

Metrics: Measuring Success

Performance Metrics Credibility Discipline Precision

Performance Metrics Core Metrics Key Performance Indicators Compliance Efficiency Best in Class

Performance Metrics DuPont Legal Continuous . . .Have an Impact Improvement Initiative in these Areas Partnering Costs Technology Docket Alternate Billing Case Results Early Case Assessment Cycle Time Strategic Budgeting Staffing

Performance Metrics What Do We Want to Measure? Docket/Case Information Cycle Time Alternative Fee Arrangements What Are We Looking For? Disposition Cases filed with PLFs vs. non-PLFs (Compliance) Closed vs. Opened Trends Closure Predictability Efficiency Results

Performance Metrics What Do We Want to Measure? Early Case Assessment Costs What Are We Looking For? Early Case Assessments (Compliance) Strategic Litigation Plan Strategic Budgets (Compliance) Results Continuous Improvement: Cost per case, family & attorney Outside counsel costs vs. disbursements Fees paid to PLFs (Compliance) Trends

Performance Metrics What Do We Want to Measure? Technology Resource Allocation What Are We Looking For? Utilization of E-billing, The EDGE and CMS Best practices Partner/Associate hours per case Partner/Associate hours per task Temporary Staffing Disbursements

DuPont $2MM Challenge

DuPont Legal Benchmark Survey Objectives: Savings “Best in Class” Working for DuPont Growing DuPont’s Business Virtual Law Firm Technology Payback Women and Minorities Representing DuPont Leadership

Phase IV

“Practice Groups”

Practice Group Objectives Primary Objective: Elevate the quality of representation and obtain better results through increased collaboration and sharing of information among the legal professionals within the network.

How? case evaluation budgeting supplier usage Greater use of technology -- measure effectiveness, eliminate duplication of effort, increase collaboration Capture valuable historical perspectives/data and recycle it Greater discipline and consistency in approach case evaluation budgeting supplier usage alternative fee arrangement Integration and alignment with clients Greater emphasis on communication

Phase V

Global Convergence Learnings from U.S. experience Improved law firm alignment and results Increased accountability and discipline Network acts as extension of DuPont Legal Leveraging knowledge via technology eliminates duplication of effort and drives collaboration More they know … better they can serve

Global Convergence Initial Focus United Kingdom & Europe Canada Mexico Challenge Is there enough work? Model’s impetus litigation 95% of outside counsel costs in U.S. region New Frontier Mergers & Acquisitions (M&A) Patent Prosecution

Supporting the New DuPont

Holliday Challenge

Transforming For Our Third Century Maturity Maturity Growth Growth Maturity Chemistry, Biology. . . Knowledge - Intensive Solutions Birth Growth Birth Chemistry, Energy Birth Explosives Six Sigma 1802 1830 1850 1900 1925 1945 1990 2000 2050 2090

Transforming DuPont Agility Developing a more direct and powerful connection to customers Strengthening our presence in emerging high growth markets such as China, Brazil, Central & Eastern Europe and India Creating a world-class Marketing & Sales capability Productivity Supporting our manufacturing assets both owned and contract Getting the bureaucracy out by driving a more streamlined support infrastructure Specificity Tying innovation more tightly to customer needs Capitalizing on the power of One DuPont

DuPont Legal: Supporting the “New DuPont” Agility Increase speed, responsiveness and execution Stay ahead of the curve Productivity Improve earnings and costs Higher volume of transactions Identify Plaintiff opportunities Leverage resources Specificity Define value, understand process, and measure effectiveness Reduce risk

Solution and suppliers who are committed to A dedicated network of law firms and suppliers who are committed to act as one in DuPont’s best interest by actively collaborating and sharing their best work product and learnings.

Phase VI

Power of Collaboration

Competitive Advantage DuPont Sustainability Competitive Edge Risk Management DuPont Legal Growth Improved client service Cost Control Agility Consistency Legal Practice Areas Process Standardization Innovation Collaboration Best Practices Leveraging Knowledge Collective Wisdom Team Awareness Efficiency Productivity

Driving Continuous Improvement Six Sigma Driving Continuous Improvement

Six Sigma in Legal Meeting Client Needs Since 1999 Leadership Communication Cultural Change Results

STREAMline Projects Project: Recoveries Project: Records Compliance Project: Corporate Patenting Project: Confidential Disclosure Agreements Project: Off Shore Document Management Project: Litigation

How Does Six Sigma Work in the Delivery of Legal Services? Provides Business Value Addresses Cost and Legal Risk Management Prioritizes Problem Solving Builds Communication through Teamwork

DuPont Legal’s Recoveries Initiative

Overview of DuPont Legal’s Recoveries Program Program started in 2004 Legal Driven Collaboration with DuPont businesses & functions Strategy: Educate and inform Leverage resources Create data driven disciplined process Transform culture (“Developing Edge”) Celebrate successes

How Do We Define a “Recovery”? “Any recoupment in the form of cash (royalty payments, settlements, adjustments), products, services, or other quantifiable rights obtained for DuPont or its affiliates through intervention of legal professionals outside of a normal business transaction.” Criteria for a Legal Recovery: It must be a recoupment of value For DuPont or affiliates It must be quantifiable Legal intervention/assistance must be involved Outside the normal course of business It must result in a net gain What it’s not: (1) normal business counseling; (2) favorable settlements; (3) avoided costs or liabilities, or (4) savings. It requires: (1) an affirmative gain to the Company; and (2) financial validation

2013 Cash v NPV Recoveries 2013 Recoveries Recovery Amount % of Total $134,366,524 84% NPV $25,776,636 16%

2013 Recoveries by Type Type No. of Recoveries Amount % of Total Antitrust/Class Action 2 $236,391 <1% Bankruptcy/ Collection 36 $12,522,734 8% Commercial/Contracts 16 $37,562,871 24% General Torts 12 $504,959 Insurance 3 $73,290,000 46% Intellectual Property $27,137,640 17% Labor and Employment $243,364 Pioneer $1,433,415 1% Real Estate $1,016,836 Tax 1 $730,439 Trade - Antidumping $1,333,052 Trade – Customs $3,726,039 2% Trademarks 4 $405,417

2013 Recoveries by Region [Amount in USD] Recovered % of Total NA $135,365,126 85% LA $13,269,214 8% AP $6,376,000 4% EMEA $5,132,820 3%

2013 Recoveries by Region [Number of recoveries reported] No. of Recoveries % of Total NA 49 50% EMEA 34 35% LA 9 9% AP 6 6%

Antitrust/Class Action $236.3M General Torts $504.9M Labor/Employment $243.3M Tax $730.4M Trademarks $405.4M

Cumulative Recoveries (2004 – 2013) Year   Amount Recovered No. of Recoveries 2004 $108,000,000 62 2005 $247,835,946 67 2006 $295,467,709 63 2007 $172,277,323 125 2008 $366,223,538 115 2009 $368,150,294 153 2010 $454,736,685 198 2011 $296,623,411 117 2012 $205,241,785 131 2013 $160,143,160 98

Results Over $100MM in Recoveries annually Cumulative Recoveries exceed $2.674 Billion Over $100MM in Recoveries annually Number of 2013 Recoveries: 98 Visible leadership Increased collaboration Driving culture change Global reach

Recoveries Program Today Not a litigation-driven program. Litigation is last resort. Recoveries resolved with in-house resources at little or no cost. Sensitive to existing customer/supplier relationships. Recoveries involve ongoing business relationships. Claims can dramatically impact the bottom-line.

Phase VII

New Reality

Accountability Transparency Collaboration Speed and Agility FOCUS TO WIN IN 2014 Our Purpose: DuPont is a Science company. We work collaboratively to find sustainable, innovative, market-driven solutions to solve some of the world’s biggest challenges, making lives better, safer and healthier for people everywhere. In 2014, we will: Performance Measures How Zeros in all core values Demonstrate discipline and execute improvement plans Increase visible felt leadership - Committed to Zero Spirit score improvement Global diversity representation improvement Implement Spirit action plans to increase employee engagement Inspire a culture of inclusion and focus on expanding workforce diversity at all levels New products sales (<4 years) >10.5 B Developing market revenue growth > 8% Delivery to promise YOY + 4 points Capture market insights and combine with integrated science to generate growth Utilize innovation centers to globally collaborate and launch localized offerings Volume growth > 5% YOY Operating margin YOY > 160 basis points CFFO >$5.3 billion Enable market share gains via differentiated offerings Improve business execution leveraging DIBM, Demand Led Fulfillment and DPS Drive cost and working capital productivity Accountability Transparency Collaboration Speed and Agility 1/27/2014

Corporate Legal’s New Reality More volatile, complex, uncertain environment. More Rapid Globalization Skills/Education Information Competitors Business opportunities Increasing corporate regulation, scrutiny and mistrust.

New Challenges New Foes New Theories New Business Models New Competitors New Geographies New Regulations

New Reality = New Belief Legal decisions/actions have value only to the extent they preserve or enhance business options.

New Resources Are our people equipped for the “New Reality” Do our attorneys possess collaborative intelligence in order to provide truly creative solutions to your most challenging issues? Are our attorneys capable of spotting business critical issues before they emerge?

What Do We Need? Lawyers who see opportunity in uncertainty, not just risk Legal at the speed of business That means we need the following. And our Legal analysis must be aligned with and integrated into the business strategy.

New Tools & Relationships Global Outsourcing of Legal Support Services Recognize the commodity work and move it to low cost regions. Allows shift of lawyer and paralegal work to more strategic issues. Monitoring and Early Warning System Dashboard to sense and respond to “red flags” Anticipate future scenarios before they happen Adjust legal and business strategy based on changes in assumptions & external environment

New Tools & Relationships Strategic Risk Management Process Assessment of complex liabilities using scenarios Wide-ranging risk identification (e.g., Cyber Security) Generate innovative strategic options to avoid/mitigate risk Strategic Decision-making Systematically avoid impact of biases, traps, and pitfalls Identify new opportunities for value creation Improve overall quality of decision-making and outcomes Verification code: NST43

Driving Better Outcomes More Upside/ Less Downside Key External Uncertainties Flexible Legal Strategies Social Response Competitor Actions Regulatory/ Policy Shifts Technology Challenges Probability Industry Performance IP Claims Business Return Critical Thinking Decision-making Real Options Scenario Planning Systems Thinking Peripheral Vision

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