Nancy A. Jessen Senior Vice President Law Department Consulting c: e:

Beyond Cost Containment: Realizing The Legal Department’s Full Potential
Nancy A. Jessen Senior Vice President Law Department Consulting c: e: Heather Jacobson Director Law Department Consulting c: e:

Session Overview Managing legal cost has become a core expectation for Law Departments, rather than a defining indicator of value contribution. The next evolutionary phase is strategically supporting the business in the accomplishment of its goals and objectives. During this hands-on session we will work through a structured methodology to prioritize legal work based upon business impact and consider options for . Using a baseline set of facts, we will explore multiple internal and external models that range from a simple modification to radical transformation, including the economic and staffing mix implications. In small group table top exercises, we will work through exercises and tool to: Create a meaningful and multi-purpose matter taxonomy Rank each type of legal work against a standard definition Document current workload allocation with or without detailed time tracking Validate the current state and perspective on priorities with business leadership Form a new mindset and culture around resource hiring, retention and rewards

Services & Scale Size and Scale Visionary Sponsors Corporate Profile
Stockholm,Sweden Toronto, Canada Papillion, NE Columbus, OH London, UK Cincinnati, OH Munich, Germany Washington, DC New York, NY Sofia, Bulgaria Overland Park, KS (HQ) Richmond, VA Lenexa, KS San Jose, CA Austin, TX Atlanta, GA Gainesville, FL Tel Aviv, Israel Gurgaon, India Miami, FL Hong Kong, China Bangalore, India Singapore Delivery Center Hosting Center Sydney, Australia Size and Scale 23 globally integrated delivery centers 4 data hosting centers hold 7 PB of client data 75+ foreign languages reviewed Visionary Sponsors Corporate Profile Founded in 2006 Headquartered in Overland Park, KS 2,000+ legal and business professionals

Services & Scale 30% 25% 50% $135B TCV 15,000+ 65,000+ $5.5B 22 4 75+
Law Department Consulting Cyber Risk Solutions Digital Contracting eDiscovery/ Litigation Management Immigration Services Intellectual Property 30% 25% 50% F50 companies are clients F500 companies are clients AmLaw 100 firms are clients $135B TCV 15,000+ 65,000+ Patents analyzed Contracts under management Litigation matters managed $5.5B In value monetized 22 4 75+ Globally integrated delivery centers Data hosting centers holding 20 PB of data Languages supported

Law Department Consulting
Vision & Strategy Articulation Work Categorization & Prioritization Internal Resource Optimization External Vendor Management Process Design & Productivity Technology Enablement Measuring Value Contribution Project Management & Implementation Support Outsourced Legal Operations Organization structure design Optimal number and level of internal resources Number and type of law firms / vendors Budgeting and cost control approaches Firm selection, management and evaluation Complement or fully support legal operations Process and workflow design Increased quality, response time and lower costs Metrics to monitor compliance and demonstrate improvement Automation of impactful processes Technology strategy System selection/ implementation Data quality controls Dashboards and reporting System support, evolution and upgrades

Business Impact Framework Overview
Eliminate/Reduce Automate Outsource Internal Resources Low High Strategic Impact Risk Potential Medium Business Impact Higher Business Impact Higher Business Impact Lower Business Impact Medium Business Impact Higher Business Impact Lower Business Impact Lower Business Impact Medium Business Impact Source: Association of Corporate Counsel InfoPak – “Strategic Planning: Why a Plan is Needed & How to Develop One”, authored by Nancy Jessen

Business Impact Results
Balancing Operational Goals Alignment of resource cost and value of work performed, within and outside of the Law Department Law Department organizational model driven by business need Technology to automate and streamline legal work Use of managed legal solutions or traditional outsourcing providers to allow the Law Department to focus on highest value work Efficiency Cost Focused High-Performing Strategically Engaged Reactive Effectiveness

Business Impact Framework Process
Identify and define categories of work performed by the Legal Department Conduct leadership workshops to calibrate business impact definitions for each type of work Document law department time allocation through interviews, leadership approximations, and/or workload survey Determine areas of opportunity with defensible benefit and prioritize in roadmap

1. Define categories of work
Taxonomy Uses Design Considerations Taxonomy should follow the philosophy of MECE (Mutually Exclusive, Collectively Exhaustive) Limit or eliminate the use of ‘Other,’ ‘Miscellaneous,’ or ‘General’ Ability to report should be a priority design consideration. Consider what information should be secured and limited to only a few team members. Apply the 80/20 rule. Law Taxonomy Workflow, Intake & Matter Management Document / Knowledge Management Internal Resource Optimization Outside Vendor Spend & Management

Taxonomy Considerations
Produce a taxonomy that reflects the work of the department Consider how Internal and External sources categorize work Legal Work vs. Department Structure Actively manage projects and collaborate across the department, practice areas, and locations Management of Legal Activities, Projects & Workflow Provide transparency to clients on activities being performed by law department Transparency Report lessons learned back to clients to train and enable self-sufficiency Client-Centricity Enable meaningful metrics and reporting through inclusion of workflow data and matter types and sub-types Actionable Metrics and Reporting

Matter / Work Types Cross-Industry Corporate Litigation Employment
Investigations Procurement Contracting Sales Contracting Volume-Based Intellectual Property Regulatory Real Estate M&A Department Scope Compliance Government Affairs Industry Specific

2. Calibrate business impact
Eliminate/Reduce Automate Outsource Internal Resources Low High Strategic Impact Risk Potential Medium Business Impact Higher Business Impact Higher Business Impact Lower Business Impact Medium Business Impact Higher Business Impact Lower Business Impact Lower Business Impact Medium Business Impact Source: Association of Corporate Counsel InfoPak – “Strategic Planning: Why a Plan is Needed & How to Develop One”, authored by Nancy Jessen

Business Impact Framework Definitions
Strategic Alignment Timeframe Definition Higher 3+ year strategy Providing advice and legal services that directly impacts the strategic goals of the organization Activities that the General Counsel should be informed of Medium 1 – 3 year business plans Providing advice and legal services that meet the current business plan Lower Maintenance & current needs Maintaining the company’s ability to serve clients and operate as a public company Risk Potential Severity Likelihood Higher Significant impact to the company’s ability to meet current or future objectives and/or significant number of people impacted. > 70% Medium Moderate impact to the company’s ability to meet current or future objectives. 30 – 70% Lower Low impact on business objectives, few people impacted. < 30%

Polling Instructions:
Open a new text message to: Text the word: unitedlexcorp You will receive a confirmation text back saying you have joined the session (do not follow the link) For each question, text the letter (A, B, or C) that corresponds with your answer for performance rating A = High B = Medium C = Low

Workshop Examples Scenarios
Large retail company with 5,000+ locations in the US Multi-national services company with 1,000’s of clients in 50+ countries Multi-national technology company with global client and employee data US-based insurance company with large agent population Global Healthcare/Medical Devices company

Workshop: Example 1 Scenario
Large retail company with 5,000+ locations in the US. Matter Sub-Type Real estate leases for individual locations

Business Impact Framework
Low High Strategic Impact Risk Potential Medium Business Impact Lower Business Impact` Higher Source: Association of Corporate Counsel InfoPak – “Strategic Planning: Why a Plan is Needed & How to Develop One”, authored by Nancy Jessen

Large retail company with 5,000+ locations in the US. Matter Sub-Type Real estate lease strategy for the US.

Multi-national services company with 1,000’s of clients in 50+ countries. Matter Sub-Type Multi-regional, mid-sized transaction for a new client.

Multi-national services company with 1,000’s of clients in 50+ countries. Matter Sub-Type Multi-regional, significant transaction for an existing client.

Multi-national technology company with global client and employee data. Matter Sub-Type Data privacy regulatory programs

Multi-national technology company with global client and employee data. Matter Type Response to data privacy violation (single country)

US-based insurance company with large agent population. Matter Sub-Type Advice and counsel

US-based insurance company with large agent population. Matter Sub-Type Compliance – regulatory reporting

US-based insurance company with large agent population. Matter Sub-Type Compliance – new regulation review

Global Healthcare/Medical Devices company. Matter Sub-Type Employment litigation (single plaintiff)

Global Healthcare/Medical Devices company. Matter Sub-Type Employment litigation (class action)

3. Time Allocation Data can be gathered via interviews, surveys, or existing data (if available).

3. Time Allocation SAMPLE

SAMPLE 3. Time Allocation HIGHER MEDIUM LOWER TOTAL (Rounded)
Resource Level Cur. FTE Cur. % Fut. FTE Fut. % Fut.% Dept. Totals* 46 15% 17% 85 27% 79 183 58% 150 56% 314 100% 275 Sr. Attorney 25 22% 32% 41% 36 47% 41 37% 16 21% 112 60% 77 Attorney 4 11% 10 26% 67% 24 63% 13% 38 23% Sr. Prof. 3 33% 44% 9 5% Prof. 7% 14 13 61% 42 25% Sr. Comp. Leader 2 18% 8 6 55% 12 9% 11 10% Sr. Comp. Prof. 14% 39 72% 30 68% 54 42% 44 40% Comp. Prof. 1 3% 6% 35 95% 91% 37 29% 33 30% Admin. Assistant 12% 5 20% 17 73% 22 Note: Rounding to the nearest full FTE, creates minor fluctuations in the total row and columns SAMPLE

4. Areas of opportunity with defensible benefit
A change roadmap should succinctly prioritizes opportunities considering impact, cost savings, investments, and degree of difficulty. Used to inform Department members, engage with internal clients, and justify investment requests. Importance Determined based upon criticality to accomplishment of the Department’s objectives. Level of Effort Qualitative assessment considering necessary investment, degree of complexity, anticipated duration and change management requirements.

High High Low Low High High Low Low Case Study 1 Case Study 2
Strategic Impact Risk Potential 58% 27% 15% Low High Strategic Impact Risk Potential 28% 33% 39% Case Study 3 Case Study 4 Low High Strategic Impact Risk Potential 29% 45% 26% Low High Strategic Impact Risk Potential 33% 55% 13%

Potential service delivery models
Modified Business As Usual (BAU) Resource Realignment (includes Modified BAU) Significant Transformation (includes Resource Realignment) Savings ~5% ~15% ~25% Scope Continue performing majority of work at current level of support Continue performing majority of core work through qualified resources at lower salary tier Focus on high value and core medium value work Eliminate most non-core lower value work Actions Required Reduce FTEs through attrition and targeted headcount elimination Continue to systematize routine work Reduce FTEs and reallocate resource tier Reduce coverage or service level Consolidate similar work to COEs Systematize routine and more complex work Aggressively outsource to lower cost providers, including off-shore Further reduce service levels Some executive-level headcount reductions Business Impact Minimal service level changes May experience some delays in response times Reduction of resource involvement in low level work Client responsibility for non-legal work Filtered access to Law Department resources Requires increased risk tolerance Less legal analysis to support some business decisions Increased filtering and reduced access Greater business discernment to involve Law only on viable, vetted business opportunities

Significant Transformation Model Overview
Sophisticated legal managed service organizations and growing acceptance of Alternate Business Structures (ABS) for non-lawyer owned law firms increase the viability and cost benefit of outsourcing The most successful transformation occur when the service provider acts as an extension of the law department with similar access points as internal team members Considerations Benefits Budget Certainty: Fixed cost with variable, unit- based cost structure with basis for year-over-year cost management Staffing Flexibility: Readily scales up or down, on short notice Integrated Support Model: Optimized delivery of low, medium and high complexity transactional work Efficient Operations: Relies upon process refinement and technology enablement without capital expenditures Personnel Management & Development: Shifts responsibility to external provider Potential Risks Requiring Mitigation Service Levels: Internal reductions may be too extreme and inhibits Law’s ability to protect revenue and support legally compliant business operations Customized Business Model: Challenging for external service provider to create efficiencies to support bespoke client needs Client Engagement: Perceived loss of consistent interaction and service quality Confidentiality: External Service Provider to hold confidential data that may require extra security measures

Sample: Transformation Org. Structure
General Counsel Litigation & Employment Commercial Litigation Employment Investigations Regulatory Corporate Support Intellectual Property M&A Real Estate Procurement Legal Operations Business Support Region The internal team is focused on effectiveness. SAMPLE External service providers, focused on efficiency, provide significant portions of the supporting/enabling legal services.

Sample: Transformation Org. Structure
General Counsel Litigation & Employment Commercial Litigation Employment Investigations Regulatory Corporate Support Intellectual Property Real Estate Procurement Legal Operations Special Projects Strategic Commercial M&A and Innovation Business/ Industry Specific This part of the team is focused primarily on efficiency. SAMPLE This part of the team is focused primarily on effectiveness and special projects.

What was the client’s challenge?
Company-wide transformation Required dramatic cost savings with on-going predictability Preference for variable cost structure and ongoing flexibility Lacking capital necessary to invest in core and strategic technology Lack of good, consistent, available data and documents Inexperienced legal operations with limited resources (people and technology) Initial attempts at proactively managing outside counsel

Solution: Legal 2.0 - Managed Services
Transferred: Significant portion of transactional support (both attorneys/ commercial negotiators) on global basis E-Discovery and investigations support Immigration support from law firm to managed service All of legal operations Implemented technology for managing workflow (integrated to CRM) via cloud-based CLMS solution Established clear metrics/SLA’s to manage solution delivery Partnered with third-party to identify and manage relationship with outside counsel Legal 2.0 properly applied drives competitive advantage, and enables law departments to “keep up” and be part of the digital evolution occurring in all other departments.

Legal 2.0: Managed Legal Solutions Traditional Legal Outsourcing
Low High Strategic Impact Risk Potential Medium Business Impact Lower Higher The deep integration of life cycle technology, holistic process design & project management, and stratified resources (based on geography, skill set, cost, and partner selection) to the delivery of legal services. Low High Strategic Impact Risk Potential Medium Business Impact Higher Business Impact Higher Business Impact Lower Business Impact Medium Business Impact Higher Business Impact Lower Business Impact Lower Business Impact Medium Business Impact Source: Association of Corporate Counsel InfoPak – “Strategic Planning: Why a Plan is Needed & How to Develop One”, authored by Nancy Jessen

What was the impact? Significant cost savings (20-30%) with predictability for ongoing legal spend and flexibility on future spend Consistent, efficient delivery of transactions support and other legal services on global scale Rapid access to all advanced technology that enable cost savings and increased consistency

Questions? Nancy A. Jessen Senior Vice President
Law Department Consulting c: e: Heather Jacobson Director Law Department Consulting c: e:

Nancy A. Jessen Senior Vice President Law Department Consulting c: e:

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