WHAT HAVE YOU DONE FOR US LATELY? Enhanced Law Department Reporting to Management BERNADETTE BULACAN, DIRECTOR ASSOCIATION OF CORPORATE COUNSEL, IOWA NOVEMBER 21, 2014

2 A PICTURE IS WORTH A THOUSAND WORDS

3 STATISTICAL INFERENCES

4 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Transactional/Contracts –Outside counsel management; law department operations Best practices to collect and use data

5 E-BILLING: THE PAPER(LESS) CHASE Law firms submit electronic bills online to legal department Invoice is automatically processed against billing guidelines Invoice is electronically routed to approvers Approved bill is sent electronically to AP system for payment Invoice is archived in matter management system; available for query and report creation

6 WHY USE METRICS TO MEASURE THE LEGAL DEPARTMENT? Value of Legal Function Defend current staff, budget, structure Better manage legal resources Triage matters Act/think/speak like a CEO/CFO Aid “make vs. buy” decisions Control costs DATA

YOU CAN’T MANAGE WHAT YOU CAN’T MEASURE * Fifth Annual Legal Department Operations Survey (Inside Counsel) Which of the following metrics do you track? 60% Percent of legal departments with formalized metrics program

8 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Contracts/Transactions –Outside counsel management; law department operations Best practices to collect and use data

9 COMPANY LEGAL STATUS: MULTIPLE DATA POINTS BUILD THE PICTURE MONTHYTD2011 Total Matters Total Spending$672,024$4,974,492$9,084,047 Total$/$M Sales.19%.16%.21% Active Litigation New Litigation1817 Closed Litigation0815 Cycle TimeN/A199 Days357 Days Litigation Spend $367,960$2,960,967 $3,642,612 Litigation $/$M Sales.10%.08% Settlement $N/A$1,602,715$278,936 Patents Trademarks IP Spending$176,135$1,358,005$1,467,726 IP$/$M Sales.05%.04%.03% Trainings73221 Ethics Complaints011

10 DEEPER DIVE: TOTAL SPENDING MONTHYTD2011 Total Matters Total Spending$672,024$4,974,492$9,084,047 Total$/$M Sales.19%.16%.21%

11 DEEPER DIVE: LITIGATION MONTHYTD2011 Active Litigation12214 New Litigation1817 Closed Litigation0815 Cycle TimeN/A199 Days357 Days Litigation Spend$367,960$2,960,967$3,642,612 Litigation $/$M Sales.10%.08% Settlement $N/A$1,602,715$278,936

12 DEEPER DIVE: INTELLECTUAL PROPERTY MONTHYTD2011 Patents Trademarks IP Spending$176,135$1,358,005$1,467,726 IP$/$M Sales.05%.04%.03%

13 DEEPER DIVE: OTHER INDICATORS OF DEPT. VALUE MONTHYTD2011 Trainings73221 Ethics Complaints011

DESCRIBING THE LEGAL PORTFOLIO

TOTAL MATTERS MANAGED

SUBSTANTIVE LEGAL AREAS

17 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Transactional/Contracts –Outside counsel management; law department operations Best practices to collect and use data

18 WHAT IS OUR LITIGATION PROFILE? DivisionInsuredUninsuredMass TortPlaintiffTotal Corporate00101 Energy Processing Subsea Production03003 Surface Production Total LocationInsuredUninsuredMass TortPlaintiffTotal US Non-Us05005 Total By Division (Year to Date) Domestic vs. International (Year to Date)

19 WHAT ARE THE PRIMARY DRIVERS OF OUR LITIGATION?

WHERE IS OUR LITIGATION SPEND CONCENTRATED? 20 Regional Litigation Spend

IS YOUR PROCESS DEFENSIBLE? HIDDEN LEGAL HOLD LIABILITY 21

APPLES TO APPLES: LOOKING AT LIKE DISPUTES BY PHASE 22 Matter Short NameSubstantive Law Firm Short NameLevel Name Approved Invoices Total Approved by Matter % of Matter Spent Case IIntellectual Property - Patent Firm BL1 - Assessment $24, USD $44, USD 54% Case IIntellectual Property - Patent Firm BL2 – Pre-Trial $20, USD $44, USD 45% Case IIntellectual Property - Patent Firm BL3 - Discovery $80.00 USD$44, USD 0% Case IIntellectual Property - Patent Firm BL4 – Trial $ USD$44, USD 0% Case SIntellectual Property - Patent Firm HL1 - Assessment $139, USD $181, USD 77% Case SIntellectual Property - Patent Firm HL2 – Pre-Trial $17, USD $181, USD 10% Case SIntellectual Property - Patent Firm HL3 - Discovery $12, USD $181, USD 7% Case SIntellectual Property - Patent Firm HL4 – Trial $ USD$181, USD 0%

23 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Transactional/Contracts –Outside counsel management; law department operations Best practices to collect and use data

24 WHAT IS DRIVING THE CHANGES IN OUR LEGAL INVENTORY? Company engaged in series of acquisitions, doubling number of employees and open HR matters

DISCRIMINATION CLAIMS BENCHMARKS Claim TypeCompanyEEOC Data Race 21.6% Gender 17.5% Nat'l Origin 6.8% Religion 2.3% Retaliation 21.8% Age 14.0% Disability 15.2%

26 SAVINGS FROM PRACTICING PREVENTIVE LAW Show the value of trainings provided by legal department Law department increased the number of trainings in response to rising number of HR matters

27 UNPOPULAR EMPLOYMENT DECISIONS BASED ON DATA Sales revenue: $$$$$ = Greatest Sales In the World Untouchable Sales revenue: $$$$$ (internal LD resources $$$) (outside counsel costs$$$) = Termination

28 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Contracts/Transactions –Outside counsel management; law department operations Best practices to collect and use data

DEMONSTRATING TRANSACTIONAL EFFICIENCY 29 No. of review requests No. of contracts reviewed and executed Average turn- around time Total & average contract revenue Cost to have outside counsel review Number of trainings (self- service)

DEMONSTRATE ROLE IN GENERATING & PROTECTING REVENUE 30

“DARK ARTS”: BUDGETING FOR M&A TRANSACTIONS 31 MICROSOFT’s “DEAL 360” “Predictability through process” and data Phase 1: initial budget & staffing plan Each deal evaluated by 26 factors: geography; number of shareholders; pending litigation, number of commercial agreements, etc. Phase 2: track success; refine matrix based on deal volume

32 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Contracts/Transactions –Outside counsel management; law department operations Best practices to collect and use data

WHAT’S YOUR LEGAL SPEND? 33

WHAT’S YOUR LEGAL SPEND- BY REGION 34

BALANCING WORK AMONG FIRMS Understand the landscape of the department’s external matters 35

36 BEST PRACTICE: AUTOMATE RETENTION GUIDELINES COMPLIANCE

37 COMPLIANCE WITH RETENTION GUIDELINES Are our firms following our retention terms? Are we leaving money on the table by ignoring audits?

QUANTIFY SAVINGS FROM INVOICE REDUCTIONS 38 Company Invoice Reductions Katy Perry$160, Arias & Morales$ Maczalaw$ Holland & Knight$2.70 Pellerano & Herr$60.66 Buffet Banque & White$156, Lee & Lee$ Kilpatrick and Stockton$2, Justin Beiber$46, MWE$ Posler Hospin$37.53 Prokskauer Daisy$42, King & Spalding$2, Kim Kardashian$10, Appleby$ Womple Carlyle$3, Norton Daisy$5, Pereya & Asociados$2, GRAND TOTAL$217, Company Invoice Reductions Appleby$1, Arias & Morales$ Buffet Banque and White$ Holland & Knight$7, Kilpatrick and Stockton$161, King & Spalding$ Lee & Lee$ Maczalaw$ MWE$37.53 Norton Daisy$4, Pellerano & Herr$2, Pereya & Asociados$ Posler Hospin$ Prokskauer Daisy$5, Womple Carlyle$18, GRAND TOTAL$205,712.57

KEEP ATTORNEYS ACCOUNTABLE FOR THE LEGAL BUDGET 39 March Spend by Attorney Attorney March Spend Monthly Budget % Monthly Budget YTD Spend 2013 Budget % 2013 Budget Katy Perry Foreign$40,267$132,46030%$261,589$1,589,52216% US$4,921$10,00049%$16,174$120,00013% Justin Beiber Foreign$0 0%$0 0% US$103,072$22,917450%$137,343$275,00050% Kim Kardashian Foreign$2,319$2,50086%$11,692$30,00039% US$23,540$45,83351%$74,582$550,00014%

40 IS OUR LEGAL SPENDING ON TRACK? Budget to Actual Report

41 BEST PRACTICE: AUTOMATE PROJECT BUDGET TRACKING

42 PERFORMING TRIAGE TO PRIORITIZE MATTERS THAT NEED ATTENTION

43 BEST PRACTICE: OPTIMIZE STAFFING ON PROJECTS Project success depends on assembling the right team and monitoring allocation of work.

COLLECT DATA TO IDENTIFY HIGHEST PERFORMERS

OUTSIDE COUNSEL EVALUATIONS

46 BEST PRACTICE: PREPARE FOR RATE NEGOTIATION Dept. Goal: No Increase Firm Proposal: –20% disc.: < $2M spend –25% disc.: $2M - $10M spend –30% disc.: > $10M spend $42M in spend for no increase…. –No Thanks!! Negotiated Rates

47 BEST PRACTICE: UNDERSTAND IMPACT OF POTENTIAL RATE INCREASES

48 BEST PRACTICE: INCORPORATE EXTERNAL BENCHMARKS

FORBES: FMC’s TALE OF THE TAPE 2002FMC Technologies $1.8B/ 8 Total sales/ No. full time attys $14.3 M ($2.8M internal; $11.5 external) Total legal spend 20% Percent on AFAs 2.8Average firm evaluation 2013 $7.1B/ 12 $9.5 M ($3.1M internal; $6.4 external) 95% 3.3

DEPARTMENT SNAPSHOT: DEMONSTRATE OVERALL VALUE

51 TODAY’S GOALS Demonstrate department’s value with compelling law department management reports –Overall Legal Landscape –Litigation Management –Employment –Transactional/Contracts –Outside counsel management; law department operations Best practices to collect and use data

52 INTERNAL CONTROLS TO ENSURE ACCURATE REPORTING All work (internal & external) in one place Create practical workflows to regularly collect consistent data from all firms and members of law department for all projects. Connect directly with outside counsel with e- billing/matter-management to collect invoices, accruals, budgets and status updates Preview results with business clients to verify accuracy and avoid surprises Compare performance with both internal and external benchmarks

53 WHERE TO LOCATE MEANINGFUL DATA & BENCHMARKS? E-billing and matter management systems Contract/IP management systems Other-company financial systems Law firm billing-records Manually stored historical information Internal surveys External benchmarking studies (ACC/Serengeti Managing Outside Counsel Survey, Hildebrandt Peer Monitor Index, Fulbright & Jaworski Litigation Report)

54 LEARN NEW WAYS TO MAKE THE NUMBERS WORK FOR YOU!

QUESTIONS?

56 CONTACT INFO BERNADETTE BULACAN Director, Market Development, Corporate Legal Thomson Reuters Phone: