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How Novo Nordisk Legal manage external counsel

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Presentation on theme: "How Novo Nordisk Legal manage external counsel"— Presentation transcript:

1 How Novo Nordisk Legal manage external counsel
Presentation to Advokatsamfundet General Counsel, Ole F. Ramsby November 2014 Kristian Krag Nielsen & Alessia Ignazzi, Corporate Financial Planning – featured on the Global Finance Career site

2 Introduction Ole F. Ramsby, SVP, General Counsel
Presentation to Advokatsamfundet November 2014 Introduction Ole F. Ramsby, SVP, General Counsel Company Secretary Directly responsible for Corporate Legal Functional responsibility for Global Legal Previously: Mærsk and FLSmidth Joined Novo Nordisk as GC in 1997 Global Legal 1997: 127 lawyers Global Legal 2014: 125 lawyers

3 Presentation to Advokatsamfundet
November 2014 Novo Nordisk has an ambitious target to keep global legal and compliance spend below 0.5% of turnover In 2014 ~DKK 450m

4 Presentation to Advokatsamfundet
November 2014 The split between internal and external legal spend has been fairly constant for years ~DKK 450m Internal cost ~90% salary and other compensation Travel Training IT External cost External counsel Discovery vendors Court fees 40% 60%

5 Presentation to Advokatsamfundet
November 2014 Internally, the Global Legal organisation consists of 125 lawyers and 74 non-lawyers Lawyers Non-lawyers Corporate Legal Corporate BECO North America Europe China Japan & Korea GL GSC Bangalore NNIT International Operations NNEPP International Operations International Operations

6 Externally, we have classified our advisors in three segments
Presentation to Advokatsamfundet November 2014 Externally, we have classified our advisors in three segments Setup Strategic Aim: >80% of spend Preferred suppliers Global engagement letters Supplier relationship manager Partnership Approved Aim: <20% of spend 5-20 law firms per region For use when no strategic firm can deliver Other Aim: <10% of spend Use only in geographies where no approved supplier is available Dem der er done kan vi skrive det ind på. Fodnote på EU og IO om at de reducerer. Hvornår skal vi bruge strategisk og hvornår skal vi bruge Approved – samt facts, dvs. Global FA letter, etc. Sæt slide ind fra GLB I stedet, hvor man kan se reduktion.

7 Externally, we have classified our advisors in three segments
Presentation to Advokatsamfundet November 2014 Externally, we have classified our advisors in three segments Setup Global: Baker McKenzie Clifford chance DLA Piper Davis Polk Hyman Phelps King Spalding Morgan Lewis & Bockius Reed Smith Sidley Austin Brown & Wood Sullivan & Cromwell White and Case HQ: Gorrissen Federspiel Strategic law firms Strategic Aim: >80% of spend Preferred suppliers Global engagement letters Supplier relationship manager Partnership Approved Aim: <20% of spend 5-20 law firms per region For use when no strategic firm can deliver Other Aim: <10% of spend Use only in geographies where no approved supplier is available Dem der er done kan vi skrive det ind på. Fodnote på EU og IO om at de reducerer. Hvornår skal vi bruge strategisk og hvornår skal vi bruge Approved – samt facts, dvs. Global FA letter, etc. Sæt slide ind fra GLB I stedet, hvor man kan se reduktion.

8 Presentation to Advokatsamfundet
November 2014 8 To ensure enhanced quality and cost competitive service, Novo Nordisk has been consolidating to even fewer firms HQ NA EU IO J&K China Global Total 211 Total number of law firms used in 2013 97 Number of approved law firms for 2015

9 Presentation to Advokatsamfundet
November 2014 Example: In the US, we have defined the firms to be used by practice area Anti-Trust/Pricing Hyman Phelps King & Spalding Reed Smith Sidley Austin Arnold Porter Covington Burling Employment Morgan Lewis Reed Smith Drinker Biddle Hill Wallack Palmieri Eisenberg Litigation (General) DLA Piper King & Spalding Reed Smith Bowman Brooke Drinker Biddle Gibbons Patent/Trademark Hyman Phelps Sullivan & Cromwell Baker Botts Baker Hostetler Meagher Emanuel Pearl Cohen 9 Strategic Regulatory/FDA Morgan Lewis Sidley Austin Arnold Porter Covington & Burling 16 Approved Compliance Hyman Phelps Morgan Lewis Reed Smith Sidley Austin Gibbons Fraud & Abuse Hyman Phelps King & Spalding Morgan Lewis Sidley Austin Arnold Porter Litigation (Products) DLA Piper King & Spalding Reed Smith Baker Sterchi Bowman Brooke Shook Hardy Privacy DLA Piper Sidley Austin Drinker Biddle Quarles & Brady Advice & Counsel DLA Piper Covington Burling Corporate/SEC Davis Polk Morgan Lewis Gov’t Affairs Hyman Phelps Alston Bird Quarles & Brady Ryan MacKinno* Litigation (Patent) Sullivan & Cromwell White & Case Real Estate Reed Smith Customs/Export Reed Smith Gov’t Investigations Sidley Austin *Patent use only **Gov’t Affairs use only ***Added in 2014 9

10 Global strategic suppliers: A mutually beneficial relationship
Presentation to Advokatsamfundet November 2014 Global strategic suppliers: A mutually beneficial relationship Law Firm Benefits Novo Nordisk Benefits Greater opportunities for business Increased revenue potential Ability to market to global affiliates Ability to market expanded areas of practice Fewer competitors Develop stronger relationships Deeper subject matter expertise Minimize learning curve costs Greater leverage for competitive rates and discounts Ability to reduce frequency and size of rate increases Ensure greater accountability Supports future Novo Nordisk growth model

11 Process for use of external suppliers
Presentation to Advokatsamfundet November 2014 All steps in the process of working with external suppliers are supported by corporate initiatives Process for use of external suppliers Screening for world class suppliers Specify terms and deliverables Evaluate supplier performance Request for Proposals Negotiate price Alternative fee arrangements Evaluations On-going dialogue with relationship partners Statement of work Serengeti Detailed on the next slide

12 Work with law firms are controlled through a statement-of-work model
Presentation to Advokatsamfundet November 2014 Work with law firms are controlled through a statement-of-work model Key principles Statement-of-work Details deliverables, scope and capped fee No work may be commenced without a SoW Total amount invoiced cannot exceed the cap

13 Work with law firms are controlled through a statement-of-work model
Presentation to Advokatsamfundet November 2014 Work with law firms are controlled through a statement-of-work model Key principles Statement-of-work Details deliverables, scope and capped fee No work may be commenced without a SoW Total amount invoiced cannot exceed the cap

14 Outcome Novo Nordisk only works with world class law firms
Presentation to Advokatsamfundet November 2014 Outcome Novo Nordisk only works with world class law firms We have high transparency and predictability of our legal spend We enforce strict cost control This ultimately leads to both improved quality and cost savings Legal services should be highly value adding (and not commodity based)

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