Demonstrating the Value of the Legal Team: Create a True Competitive Advantage for the Enterprise

Optimizing your Legal Your Law Department Mgmt Demonstrating the Value of the Legal Team: Create a True Competitive Advantage for the Enterprise As corporations continue their efforts to cut costs and improve profitability, traditional “cost-centers” like legal departments are now expected to re-examine their operations and come up with new ways to contribute value – providing strategic services, generating revenue and optimizing legal spend. Today, legal is tasked with controlling costs, balancing variable workloads against fixed budgets and reporting their performance to the board – just like every other department.  How can legal be more proactive and effective, yet stay within its current budget. What are the most effective methods for budget, revenue and profit forecasting. Which performance metrics are likely to be most compelling to clients? This session will explore strategies for demonstrating value, including: insourcing, creating effective alternative fee agreements with vendors and outside counsel, maximizing headcount, integrating proven business principles into legal operations, establishing proactive patent enforcement strategies, and leveraging the right technologies to make litigation more efficient and cost-effective.

Panelists Joe Colaiano Director of Legal Operations Nancy A. Jessen Sr. Vice President, Legal Business Solutions Nancy.jessen@unitedlex.com 443-994-3100

Joseph Colaiano, Mayo Clinic Joseph Colaiano, Director of Legal Operations Company Overview Law Department Overview Revenue Number of employees Global footprint Company growth Number of lawyers Number of total team Geographic dispersion Department growth Operations team size

Demonstrating the Law Department’s Value The General Counsel and legal team are expected to drive business outcomes and deliver measurable value to the company – all while balancing the complementary goals of efficient and effective operations. Efficiency Effectiveness Cost Management High-Performing Reactive Strategically Engaged Efficiency: how legal work is being performed in terms of process, technology utilization and resource optimization Effectiveness: the degree to which the Department aligns with corporate goals and has established a clear strategy for delivering legal services

Translate into components Develop metrics that matter But, … how to do it? Define value drivers Translate into components Develop metrics that matter

1. Define Value Drivers Engineering creative solutions to manage risk, promote a culture of integrity, protect the company's ability to operate, and engage effectively with government/regulatory bodies Facilitating growth, transformation, and the best possible outcomes for the company and its customers, through responsive and proactive legal and policy expertise, business acumen, judgment, and advocacy Advancing Strategic Direction Facilitating Risk Management and Protection Increasing Speed of Business Controlling Costs Controlling costs via resource allocation, vendor management, cost transparency, operating processes and technology Accelerating business through simplified contracts, legal services, processes and tools

2. Translate into components Advancing Strategic Direction Facilitating growth, transformation, and the best possible outcomes for the company and its customers, through responsive and proactive legal and policy expertise, business acumen, judgment, and advocacy Demonstrating Value Contribution Active member of business leadership team contributing judgment and problem-solving prowess Balanced approach to risk and reward when evaluating and pursuing new business opportunities  Enabling business teams in growth markets and regions Helping business leaders and teams avoid missteps and omissions Advancing business priorities and shaping policy through government engagement and advocacy Legal and business competencies and focus to support company strategy Aggressive and disruptive IP strategy

2. Translate into components Controlling Costs Controlling costs via resource allocation, vendor management, cost transparency, operating processes and technology Demonstrating Value Contribution Value for associated cost Cost-effective internal staffing (skillsets appropriately aligned to tasks) Effective management of internal costs Appropriate use and engagement of outside counsel Effective management of external costs (e.g., outside counsel) Cost transparency (i.e., budgets, forecasts, op plan, internal and external spend components)

3. Develop metrics that matter Know what value drivers are most important to the business Incorporate ‘voice of customer’ perspective through structured survey Combination of qualitative and quantitative Recognize data limitations and behavior obstacles Don’t measure too much Work with business and legal to develop initiatives to drive improvement in prioritized type of value Track improvement from that initiative

Defining value for your business clients Initiatives underway Panel Discussion Defining value for your business clients Initiatives underway What worked/what didn’t Client interest in metrics Technology and data challenges Change management with internal team Next on your horizon

While legacy concerns such as vendor and cost management are becoming more manageable, solutions to issues related to process have been elusive Percent of Respondents Reporting Task As More Challenging More Challenging Nick’s Takeaways: Over the last five years the major focus of law departments – based on my experience working as a consultant – has been on vendor management, cost management and implementation of new technology. The fact that these three “tasks” are listed as less challenging suggests to me suggests that a lot of the hard work that has been done over the past several years in those areas is starting to pay off. These “legacy” concerns are becoming more manageable and there is a turn from the external to the internal. Now you see departments having significantly more trouble with resource optimization, prioritizing work, and process efficiency. In my opinion these tasks will be the next hurdle for law departments. Potential Audience participation: ask how many were doing major projects focused on vendor management or cost management over past several years Ask how many believe those efforts are starting to pay off Ask how many are currently working on internal efficiency focused initiatives Source: Business of Law Survey (2015)