Metrics that Matter April 16, 2014

Today Open up some new thinking about metrics Share examples of “Metrics that Matter (MTM) in Action” from innovative in-house counsel Get you to do some ‘on your feet’ thinking with your colleagues

Our Panelists Douglas A. Batt │ Senior Vice President, General Counsel and Secretary of PAREXEL International Scott A. Brown │ Vice President and General Counsel of Novartis Institutes of Biomedical Research Stephanie Shores Lambert │ Managing Counsel of Staples Inc. Jeff Levinson │ Vice President, General Counsel, and Secretary of NetScout Systems, Inc. Kate Perrelli │ Partner and National Litigation Chair of Seyfarth Shaw, LLP

What You’ll Learn from Our Panel What makes a metric a “Metric that Matters” What MTM’s you can use to best manage costs, improve quality of non-financial results How to get data you need from inside and outside your organization How MTM can help you engage/ lead teams How you can use metrics that matter to strengthen your department’s position as a strategic business partner

Metrics that Matter at Staples, Inc. Stephanie Shores Lambert Managing Counsel

Public company founded in 1986 $23B sales annually in B2B and B2C Products:  Core office supplies 27%; ink and toner 20%; Business Tech 15%; Paper 9%; Facilities and Breakroom 9%; Computers and Mobility 7%; Services 7%; Office Furniture 6% 25 countries 1500 stores in US/2100 worldwide Global Legal Department (includes Ethics & Compliance) 28 lawyers globally (1 lawyer/$800M Revenue)

Metrics that Matter at NetScout Systems, Inc. Jeff Levinson Vice President, General Counsel and Secretary

NetScout Systems, Inc. (Nasdaq: NTCT) Market leader in application and network performance management solutions Core, patented technologies enabling the most powerful information capture and efficient workflows for service assurance Fortune 1000 customer base operating complex “mission-critical” network environments International footprint with sales, support, and services in over 30 countries Strong financials ~ $400M revenue; ~$1.50 EPS; no debt 9 years of revenue growth & expanding margins ~ 1000 employees Over 30 years of leadership within the industry

Quantitative vs. Qualitative Consider trends, deltas Operations review/quarterly business review Selected examples NDA indicators Subsidiary/entity spend and savings, international restructuring Patent tracking, prosecution and filing costs, pruning Compliance certifications, training delivered, new policies developed ERM charts Litigation tracking

Key Contracts Measurements Numbers of MPAs, reseller agreements Quarterly revenue related to transactions legal worked on Key deals and new logos Qualitative view of trends observed

Metrics that matter: contract negotiations April 16, 2014 Douglas A. Batt Senior Vice President, General Counsel and Secretary

Parexel international (NASDAQ: PRXL) Leading global bio-pharmaceutical services company; 16,000 employees doing business in 100 countries; offices in 50+ countries Service Lines: Clinical Research Services, Regulatory Consulting (e.g., FDA) & Product Commercialization, PAREXEL Informatics and Clinical Logistics PAREXEL has supported the development of 95% of the top 200 bio-pharmaceutical products on the market Clients include: All of the top 50 bio- pharmaceutical companies as well as all of the top 30 small and emerging bio- pharmaceutical companies

metrics Quantitative evidence of: Demonstrating value Efficiency Effectiveness Risk Opportunity Demonstrating value Selective use of metrics Metrics vs. Reporting Example: Measuring Contract Negotiations

Client/PRXL Target Date measuring The Cadence Of Contract Negotiations ALERT ALERT __ PAREXEL CLIENT START SIGNATURE ALERT ALERT ALERT Client/PRXL Target Date DAYS TOTAL TIME

Contract negotiation activity report   ACTIVITY REPORT Last Updated: 4/16/2014 Human Voice Template Sent? Template Used? XX% NEW BUSINESS: CLIENT CONTRACTS NEW BUSINESS DEAL TEAM CLIENT ESTIMATED VALUE SBU / FUNCTIONAL AREA DOC TYPE PROJECT NUMBER REGION BUS DEV OPS BUS OPS LRM DATE IN HUMAN VOICE CLIENT IN ROLODEX PRXL TEMPLATE PRXL TEMPLATE SENT? GOODWILL STATUS? LOCATION CURRENT STATUS DATE COMPLETED TOTAL DAYS NEGOT. 41746

Analysis of CONTRACT NEGOTIATION DATA *This is hypothetical sample data only

Metrics That Matter: Talent Development Scott A. Brown VP, General Counsel Novartis Institutes for BioMedical Research

Metric Stakeholders Care About outcomes value results

Drivers of Outcomes quality of counsel value results

counsel is as important Drivers of Outcomes quality of in-house counsel is as important demonstrating development of legal talent is important to stakeholders

A Metric That Really Matters We need to enhance our ability to measure the potential of our people

Business Benefits of Getting It Right… If we calibrate appropriately and differentiate between people who have different levels of potential we will: Put the right development in place Increase our confidence in people decisions Increase the confidence of people of succeeding in those roles Avoid the hero to zero situations Invest our development resources in the most optimal way Set and manage people’s expectations in a realistic way Strengthen the foundation of our function: our people Meet objective of positively affecting outcomes

Four (Five) Factors

Sustained Performance: Definition Successful delivery in multiple roles Over a sustained period Measured by high performance against business goals and overall job execution Periods of less successful delivery may be explained by environmental factors Sustained Performance is different from annual performance The annual performance rating is only one of the factors to consider Sustained Performance is the ability to consistently deliver results over time. The focus is on performance over the past 3−5 years, taking into consideration the context, the challenges and changes

Assessing Learning Agility Gap in one or more factors of Learning Agility Well balanced, moderate amount of agility in all 4 factors Moderate agility in each factor and role model in two or more factors Learning Agility is the ability to figure out something new and perform under first time conditions. Four factors: Results Agility Mental Agility Change Agility People Agility More 4 7 9 2 5 8 1 3 6 PERFORMANCE SUSTAINED Less More LEARNING AGILITY

Assessing Sustained Performance Sustained Performance is the ability to consistently deliver results over the last 3-5 years, taking the environmental context into account More 4 7 9 2 5 8 1 3 6 Consistently exceeds expectations Always meets and sometimes exceeds expectations Gaps in performance over the last 3-5 years PERFORMANCE SUSTAINED Sustained Performance is the ability to consistently deliver results over time. The focus is on performance over the past 3−5 years, taking into consideration the context, the challenges and changes Periods of less successful delivery: take environmental context into account Less More LEARNING AGILITY

Differentiated Development Planning More 4 Deepen and leverage expertise 7 Reinforce expanding interests 9 Fast track, high risk assignments 2 Build functional specialty 5 Build future utility 8 Increase challenging assignments 1 Performance improvement plan 3 Careful next assignment 6 Developmental jobs PERFORMANCE SUSTAINED Less More LEARNING AGILITY

Differentiated Coaching More Coaching for depth 4 7 9 2 8 1 3 6 Coaching for breadth PERFORMANCE SUSTAINED Coaching for high performance Coaching for performance development Less More LEARNING AGILITY

Use With Stakeholders How we use the metric with stakeholders: Reported to divisional and global management Hard wired into associate profiles Used by management for appointment to new roles Including outside Legal Used by management for corporate learning assignments Used by management for appointment of project and initiative tems Used by Legal leadership to make matter assignments

Metrics that Matter at Rockwell Collins’ Law Group Kate Perrelli Partner and National Litigation Chair

Who is Rockwell Collins? A Global Aerospace and Defense Company operating in more than 60 locations in 27 countries $4.8 billion in sales (2012) Operating margins about 20% R&D investments ~ $900 million (18% of sales) 20,000 Employees Office of General Counsel - 65 Employees Law and Corporate Secretary (21) Ethics and Business Compliance (12) Export and Import Compliance (32)

Rockwell Collins’ Law Group Re-engineered its processes for engaging outside counsel and achieving great results Implemented a more consistent, cost-effective level of service through increased use of alternative fee arrangements (AFAs)

A Great Success Achieving excellent results while controlling costs New processes and templates – Efficient and promotes use of AFAs Savings of $598,000 over past 10 months Strengthened relationships with our outside counsel

Metrics that Matter Created a scorecard measuring outside counsel’s performance (in FY11, generated 46 scorecards)

Metrics that Matter Metrics Related to the Law Group Project Total dollars saved using AFAs: $598,000 saved on $3.4 million– 17.4% Percentage of total spend using AFAs: 49%; 58% including discounted hourly rates Number of new matters using AFAs vs. standard hourly rates (by quarter) By attorney, number of matters using different types of fee arrangements Success Fee Matters by Subject Matter Fixed/Flat Fee Matters by Subject Matter Capped Fee Matters by Subject Matter

Metrics that Matter Legal Department Metrics = Missed = Met = At Risk (Forecast Only) KEY: Office Of The General Counsel FY13 Scorecard

Table Exercise Identify 3 “metrics that matter” that you will use to demonstrate progress and/or challenges In the spirit of transparency, these 3 metrics that you will share with the board must also be shared with your internal clients, law team, law firms Factor in how you will collect data Report out from facilitators

Questions?

Thank you!