1. Data Analytics: AFAs and Budgeting Certainty
“Data” is not a Four Letter Word (Although technically it is)

2. ADM Goals
Global roll-out to create sustainable processes and systems to “make the complex simple”
Drive and optimize law department function
Reduce legal spend and gain visibility into metrics
Create enterprise-wide consistent and repeatable tools for improving and managing the law department
Convergence of tools and systems
Workflow and automation was critical
Partnership with innovative technology providers

3. Challenges
Did not have one system of record to manage its risk and identify its outside counsel spend
Did not have an ability to easily identify open matters (projects, circumstances, claims and law suits) company-wide
Had no consistent and verifiable process to identify risk on open matter
ADM Reserve/Exposure reporting across the organization for open matters was a fragmented process and done manually
Had no automated and auditable process to ensure settlements are strategically evaluated and properly authorized

4. Results
Combination of innovation, process re-engineering and a robust and nimble technology platform 
Reduced its outside legal spend by more than one-third 
Delivered more than $20M in savings
Slashed 700-firm outside adviser panel by 75% 
Better reporting on fixed-fee and other AFAs for matters ranging from transactions to litigation  
Implemented contextual analytics, predictive metrics and reporting

12. ADM Recognition ACC Value Champion – 2017 (Onit is a co-champion)
Transatlantic Legal Department of the Year – 2017

13. David Cambria Archer Daniels Midland Company Global Director of Operations – Law, Compliance & Government Relations

14. CONVERGENCE - The Shell Journey
Vincent Cordo
Global Sourcing Officer
May 2017

15. This is based on my experience with legal operations, AFA’s, responding to requests for proposals and taking part in convergence processes on behalf of both a large, global law firm and here at Shell. I have participated in conversations and presentations with in-house counsel on this topic, and I have seen how convergence programs work.
How to plan for success. Consider the appropriate scale, institute metrics and how to track for best in class value.
When considering convergence, it’s important to identify a few things up front, as doing so will help you formulate objectives, help you develop appropriate tactics to reach those objectives, and help you develop the right metrics to measure whether or not you reached the objectives.
What is driving the change? Reaching consensus with your leadership team on what is important – everyone should be aiming at the same goal.
Introduction

16. What's important
Expertise – likely already existing in your current firms - but maybe it’s the right level of expertise, for the right task
Quality and Pricing
AFA program
Legal Project Management
Other added value services – CLEs, secondments, etc.
Diversity
Specific expertise/geography needed to fill gaps

17. Goals 100% AFA Usage on all Matters Globally
Convergence Panel update – Reverse Online Auction, consolidation of the panel
Operational Excellence / Future Legal
Outside Counsel/Vendor Mgmt.
Business process improvements
Reporting and tracking – KPIs
Technology
Project/Matter Management
Update RFP template and AFA poral

18. Challenges How to track RFP’s and report on KPIs Setup reverse auction
Matter Management / tied to AFAs
Process mapping
Reporting
Automation

19. Why is “Why” still a question?
“AFAs may be fine for [insert description] work, but my matters are too…
…unpredictable
…complicated
…important and risky
…unique.”
What about my?
Budget
Technology
Team
Organization
AFA’s are not
Hourly rate discounts
Volume based discounts
Blended rates
“Mere” Budgets

20. iPhone is Born 2007 First Call 1876
700 million iPhone units sold since 2007…(ever 2 seconds someone breaks a phone)
Smartphone 1992

21. Legal market timeline
2007 – Association Corporate Counsel (ACC ) Value Challenge
2008 – Say good bye to the billable hour
2008 – Richard Susskind - The End of Lawyers?: Rethinking the Nature of Legal Services
2009 – Rupert Jackson - Review of Civil Litigation Costs
April Most of the Jackson reforms to costs in civil litigation came into force
The increased cost of tendering The Lawyer reported that during 2013 there were 46 formal law panel reviews.
Jaap Bosman – Death of a Law Firm
Groups: ACC, CLOC, P3, Buying Legal, ILTA, and more…

22. Commercial Value How is value defined
Dollars per unit (in our case – FTE, Task Code, AFA)
Net benefits - any costs incurred in obtaining the desired benefits (e.g. project delivery, outcome, schedule)
ROI (commercial value):
Value and price – raising or lowering the price of a legal service offering does not change the value that it provides. Rather, it changes the businesses incentive to leverage that legal offering
In today’s market one competitive alternative may be that the client decides to leverage an alternative solution rather than the typical approach
How do you define value?
Can you measure it?
What are your support and services actually worth to the business?

23. Panel talking points
How do I determine the size of the Panel?
Decide what you want your panel to look like, because that will inform how stringently you outline “rules to live by” for both your team and your Outside Counsel. How do we create a MWBE/WBE Panels?
Relationship Partners? Who and how will the account be managed.
Think about a Waiver Process. You will likely need an “exceptions” process.
Deciding what your panel will look like is important, because it will likely inform the process you devise for selecting and engaging firms.
Other topics:
AFAs
Terms & Conditions
Frame Work Agreements
Auction or No auction - How the panel auction process works
Communications
Tracking volume and quality
QBR Reporting

24. AFA Concepts
We believe AFAs are a key component of a collaborative partnership that seeks to:
Reduce costs
Provide budget certainty
Improve efficiencies, communication and risk assessment
Share risks/rewards
Enable the relationship to grow stronger

25. Key Elements AFA Type Fixed fee per phase of case
Fixed fee for each phase of case; typically 4 or 5 phases. Determined on an individual case basis. Suited for larger cases.
Fixed fee for a defined project
Fixed fees for specific matter. Provides budget certainty.
Fixed fee for portfolio
Fixed fee for all matters of a certain type for a fixed period, typically yearly.
Discount hourly rates with contingent component
Reduced hourly rate with a sliding scale contingency fee based on mutually defined success (e.g. recovery values, phase of resolution, etc)
Fixed fee with Collar option
If recorded time varies from the target by set percentage (generally 15%), additional time will be refunded (if below the collar floor,) or billed (if above the collar ceiling), at a discounted rate. This risk-sharing is well-suited for arrangements where uncertainty exists.
Broken Deal Discounts
Risk-share element whereby a significant discount is provided should a deal fail to close.
Success Fee
Reward-share/incentive element that aligns interests of the client and outside counsel. Based upon pre-determined criteria (outcome of case; timing of resolution or case or closing of transactional matter).

26. How to get Started?
Identify the key commercial and Legal goals for the matter - - involve commercial colleagues.
Identify trusted external counsel firms.
Share goals, and openly discuss risk tolerance.
Solicit AFA proposals from multiple firms.
Negotiate.

27. The Approach (1) Obtain key data (2) Map out steps in a typical matter
(3) Identify areas of opportunity
(4) Design
(5) Develop business case
Underlying the approach to optimizing matter efficiency is robust data. Collect:
Having obtained supporting data, map out matter steps.
With the mapped out steps, identify areas that can benefit from alternate service delivery. Example criteria include:
Areas of opportunity will then be prioritised to determine what alternate delivery models exist. Examples include:
With the alternate delivery models designed, financial benefits can be articulated. These include:
Shadow time recording and narratives for a historic matter.
Have firms charge out rates per lawyer grade
Any relevance guidance to help with initial mapping of matter steps
Across each in-scope practice group, we will break down a matter by phase of work.
Identify key steps and understand the skills required
Complexity of step
Commonality across practice groups/ matters
Level of legal expertise required
Level of responsibility
Ability to provide service remotely
Leveraging junior lawyers more
Using centres of excellence to deliver matter steps
Optimising technology to support during certain matter steps
Increased margins on work
Labour arbitrage from the use of centres of excellence
Freed up senior lawyer time to focus on business development
Analysis of time recorded by matter team
Pre-populated map of matter steps
Confirmation of key phases
Validated map of matter steps
Analysis of potential areas of change
Analysis of alternate delivery model
Business case and roadmap aligned to change

28. Integrate concepts with
AREAS We Help
Integrate concepts with
Areas of focus
AFA Support
RFP Support / Planning
Firm Relationships
(e.g., procurement)
Portfolio Management
Pricing, Matter Management, Analytics
Commitments
Key Performance Metric Reporting
Reporting / Communications
Best Practice

29. TRACKING VALUE WITH SHADOW BILLING
New matter intake opened as usual
Billing apply Shell matter phase codes as standard to all matters
Time Recording Requires lawyers allocate their time entry to relevant Shell phase code on the dropdown list
Time is automatically pooled to relevant matter work streams
Data available for phase and budgets creation to track spend and KPIs through cost management dashboards
End of matter overview provides valuable profit and budget information for future pricing and improvement analysis
The ability to record time by reference to a specific phase of the matter
A management tool to measure the ‘spend’ on any component or phase of the budget
A system which assists with monitoring and controlling costs – staying ‘on course’ with budgets and enabling more accurate pricing going forward.

30. Data Analytics & AFA Process
Common Questions
Key Performance Indicator (KPI)
Who has the needed expertise?
Where are we spending the most?
How is my team’s performance?
Weighted Grades Performance Matrix
Heatmaps: Spend, Exposure, Claims
Multi-year Trend Data and Peer Comparison
Data Inputs
Analytics
Reporting
QBR Reports
Executive Dashboards
Most questions have an associated KPI associated with them – they key is figure out how to 1. Interpret the Need, 2. Capture the Data needed, 3. Present in a succinct and attractive way to ensure it connects with your audience’s goals. The underlying aspect to this entire process is Speed. If you’re able to complete the process, and answer the question, but it takes 6 months to do it – it’s likely no longer valuable. The key is to Streamline and standardize the process to get the response times low not only for your quarterly reports, but also they day to day questions that working in a dynamic legal environment demands.
Budget
Technology
Team
Organization
March 2017

31. What is a QBR…?
Quarterly Business Reports are comprehensive relationship updates between Shell and it’s Panel Law Firms.
It enables Transparency between Shell and our Firms.
Provides Customized updates for executives and management that enables more Targeted dialogues with Law Firm Leadership.

32. QBR Reporting: Key KPIs
Executive Summary – Global Panel 2017 Q1
The Buzz
Q4 2016
Q1 2017
AFA Utilization
100%
New Matters 10
Volume
$1M
Secondment Hours (Free)
1,000
Spend of $XM (X% of Total Panel Volume) for 2017 is expected to increase as a result of the push for increased engagement of our Global Panel Firms.
Out of our 6 firms, we’ve seen two mergers and 20+ Partner Transfers in Q1. Opportunity (Internal/External): Solidify how existing AFAs are handled when the lead partner moves to a new firm.
Global Panel Jurisdictions
Global Panel Spend
100K

33. What is an Executive Dashboard…?
Executive Dashboards are a way for internal stakeholders to receive Dashboard Presentations customized to their needs on a Quarterly Basis.
Responsible Business Unit: Matter Count
Upstream overview…remove other

34. SHELL Recognition
ACC Value Champion – 2017

35. Global Sourcing Officer
Vincent Cordo
Global Sourcing Officer
Shell Oil Company
Room F0652C
150 Dairy Ashford
Houston, TX 77079
Direct: