what have you done for us lately? enhanced law department reporting to management bernadette...

WHAT HAVE YOU DONE FOR US LATELY?Enhanced Law Department Reporting to Management

BERNADETTE BULACAN, DIRECTORASSOCIATION OF CORPORATE COUNSEL, IOWANOVEMBER 21, 2014

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A PICTURE IS WORTH A THOUSAND WORDS

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STATISTICAL INFERENCES

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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

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E-BILLING: THE PAPER(LESS) CHASE

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WHY USE METRICS TO MEASURE THE LEGAL DEPARTMENT?

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

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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

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COMPANY LEGAL STATUS:MULTIPLE DATA POINTS BUILD THE PICTURE

 MONTH YTD 2011

Total Matters 595 -152 747

Total Spending $672,024 $4,974,492 $9,084,047

Total$/$M Sales .19% .16% .21%

Active Litigation 12 -2 14

New Litigation 1 8 17

Closed Litigation 0 8 15

Cycle Time N/A 199 Days 357 Days

Litigation Spend $367,960 $2,960,967 $3,642,612

Litigation $/$M Sales .10% .10% .08%

Settlement $ N/A $1,602,715 $278,936

Patents 970 +31 939

Trademarks 272 -17 289

IP Spending $176,135 $1,358,005 $1,467,726

IP$/$M Sales .05% .04% .03%

Trainings 7 32 21

Ethics Complaints 0 1 1

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DEEPER DIVE: TOTAL SPENDING

  MONTH YTD 2011Total Matters 595 -152 747Total Spending $672,024 $4,974,492 $9,084,047Total$/$M Sales .19% .16% .21%

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DEEPER DIVE: LITIGATION

 MONTH YTD 2011

Active Litigation 12 2 14New Litigation 1 8 17

Closed Litigation 0 8 15Cycle Time N/A 199 Days 357 DaysLitigation Spend $367,960 $2,960,967 $3,642,612

Litigation $/$M Sales .10% .10% .08%Settlement $ N/A $1,602,715 $278,936

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DEEPER DIVE: INTELLECTUAL PROPERTY

  MONTH YTD 2011

Patents 970 +31 939Trademarks 272 -17 289IP Spending $176,135 $1,358,005 $1,467,726

IP$/$M Sales .05% .04% .03%

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DEEPER DIVE: OTHER INDICATORS OF DEPT. VALUE

  MONTH YTD 2011

Trainings 7 32 21

Ethics Complaints 0 1 1

DESCRIBING THE LEGAL PORTFOLIO

TOTAL MATTERS MANAGED

SUBSTANTIVE LEGAL AREAS

2009

2010

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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

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WHAT IS OUR LITIGATION PROFILE?

Division InsuredUninsure

dMass Tort Plaintiff Total

Corporate 0 0 1 0 1Energy Processing 21 7 4 14 46Subsea Production 0 3 0 0 3Surface Production 12 1 0 0 13Total 33 11 5 14 63

Location InsuredUninsure

dMass Tort Plaintiff Total

US 33 6 5 14 58

Non-Us 0 5 0 0 5

Total 33 11 5 14 63

By Division (Year to Date)

Domestic vs. International (Year to Date)

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WHAT ARE THE PRIMARY DRIVERS OF OUR LITIGATION?

WHERE IS OUR LITIGATION SPEND CONCENTRATED?

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Regional Litigation Spend

IS YOUR PROCESS DEFENSIBLE?HIDDEN LEGAL HOLD LIABILITY

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APPLES TO APPLES:LOOKING AT LIKE DISPUTES BY PHASE

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Matter Short Name Substantive Law

Firm Short Name Level Name

Approved Invoices

Total Approved by

Matter

% of Matter Spent

Case I Intellectual Property - Patent

Firm B L1 - Assessment

$24,289.00 USD

$44,846.15 USD

54%

Case I Intellectual Property - Patent

Firm B L2 – Pre-Trial

$20,357.00 USD

$44,846.15 USD

45%

Case I Intellectual Property - Patent

Firm B L3 - Discovery

$80.00 USD $44,846.15 USD

0%

Case I Intellectual Property - Patent

Firm B L4 – Trial

$100.00 USD $44,846.15 USD

0%

Case S Intellectual Property - Patent

Firm H L1 - Assessment

$139,297.00 USD

$181,828.17 USD

77%

Case S Intellectual Property - Patent

Firm H L2 – Pre-Trial

$17,994.50 USD

$181,828.17 USD

10%

Case S Intellectual Property - Patent

Firm H L3 - Discovery

$12,434.00 USD

$181,828.17 USD

7%

Case S Intellectual Property - Patent

Firm H L4 – Trial

$360.00 USD $181,828.17 USD

0%

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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

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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 Type Company EEOC Data

Race   21.6%

Gender   17.5%

Nat'l Origin   6.8%

Religion   2.3%

Retaliation   21.8%

Age   14.0%

Disability   15.2%

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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

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UNPOPULAR EMPLOYMENT DECISIONSBASED ON DATA

Sales revenue: $$$$$ =

Greatest Sales In the World

Untouchable

Sales revenue: $$$$$(internal LD resources $$$)

(outside counsel costs$$$) =

Termination

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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

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DEMONSTRATE ROLE IN GENERATING & PROTECTING REVENUE

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“DARK ARTS”: BUDGETING FOR M&A TRANSACTIONS

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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

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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?

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WHAT’S YOUR LEGAL SPEND- BY REGION

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BALANCING WORK AMONG FIRMS

• Understand the landscape of the department’s external matters

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FirmBusiness Unit/ Focus 2011 $K %

2011 Evaluati

# Files (Lead)

Firm 1 Employment (All 1,186 23.8% 3.4 31Firm 2 Processing & Production/Lit & Gen492 9.9% 3.0 12Firm 3 IP 347 7.0% 3.6 81Firm 4 International 304 6.1% 3.4 15Firm 5 International - Brazil 300 6.0% 3.0 2Firm 6 All - Annuity Payments 297 6.0% N/A N/AFirm 7 International 265 5.3% 3.2 36Firm 8 IP 202 4.1% 3.3 58Firm 9 IP 191 3.8% 3.5 98Firm 10 Customs Compliance 145 2.9% 3.6 1Firm 11 Litigation 132 2.7% 4.4 13Fimr 12 IP - DDS 131 2.6% 3.6 34Firm 13 IP 117 2.4% 3.6 15Firm 14 Corporate 115 2.3% 4.1 21Others 39 Firms 750 15.1%TOTALS 4,974 100.0%

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BEST PRACTICE: AUTOMATERETENTION GUIDELINES COMPLIANCE

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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

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Company Invoice ReductionsKaty Perry $160,586.71

Arias & Morales $520.15Maczalaw $454.75Holland & Knight $2.70Pellerano & Herr $60.66

Buffet Banque & White $156,066.00Lee & Lee $601.45Kilpatrick and Stockton $2,881.00

Justin Beiber $46,380.18MWE $601.45Posler Hospin $37.53Prokskauer Daisy $42,953.70King & Spalding $2,787.50

Kim Kardashian $10,780.40Appleby $343.00Womple Carlyle $3,330.31Norton Daisy $5,084.64Pereya & Asociados $2,022.45

GRAND TOTAL $217,747.29

2012 Company Invoice ReductionsAppleby $1,917.25Arias & Morales $454.75Buffet Banque and White $948.34Holland & Knight $7,256.70Kilpatrick and Stockton $161,389.25King & Spalding $601.45Lee & Lee $177.25Maczalaw $601.45MWE $37.53Norton Daisy $4,297.88Pellerano & Herr $2,787.50Pereya & Asociados $343.00Posler Hospin $887.58Prokskauer Daisy $5,084.64Womple Carlyle $18,928.00

GRAND TOTAL $205,712.57

KEEP ATTORNEYS ACCOUNTABLEFOR THE LEGAL BUDGET

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March 2013- Spend by Attorney        

AttorneyMarch Spend

Monthly Budget

% Monthly Budget

YTD Spend

2013 Budget

% 2013 Budget

Katy Perry            

Foreign $40,267 $132,460 30% $261,589 $1,589,522 16%

US $4,921 $10,000 49% $16,174 $120,000 13%

Justin Beiber            

Foreign $0 $0 0% $0 $0 0%

US $103,072 $22,917 450% $137,343 $275,000 50%

Kim Kardashian            

Foreign $2,319 $2,500 86% $11,692 $30,000 39%

US $23,540 $45,833 51% $74,582 $550,000 14%

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IS OUR LEGAL SPENDING ON TRACK?

Budget to Actual Report

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BEST PRACTICE: AUTOMATE PROJECT BUDGET TRACKING

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PERFORMING TRIAGE TO PRIORITIZE MATTERS THAT NEED ATTENTION

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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

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BEST PRACTICE: PREPARE FOR RATE NEGOTIATION

LAW FIRM X Spend Volume Break-Even (tiered structure)Name 2009 2010 2011 2012 2013 $6M in spend $12M in spend

Doe, Lawyer 1 450$ 500$ 525$ 505$ $2M @ 20% disc. = 12% price incr. $2M @ 20% disc. = 12% price incr.year over year % change 11% 5% -4% $4M @ 25% disc. = 5% price incr. $8M @ 25% disc. = 5% price incr.Doe, Lawyer 2 420$ 420$ 450$ 440$ $2M @ 30% disc. = 2% price dcr.year over year % change 0% 7% -2% Net price incr. on $6M in spend is 7.3% Net price incr. on $12M in spend is 5.0%

$20M in spend $42M in spend

2011 2012 2013 $2M @ 20% disc. = 12% price incr. $2M @ 20% disc. = 12% price incr.Doe, Lawyer 1 575$ 630$ 695$ $8M @ 25% disc. = 5% price incr. $8M @ 25% disc. = 5% price incr.year over year % change 10% 10% $10M @ 30% disc. = 2% price dcr. $32M @ 30% disc. = 2% price dcr.Doe, Lawyer 2 500$ 550$ 605$ Net price incr. on $20M in spend is 2.2% Net price incr. on $42M in spend is 0.0%year over year % change 10% 10%

20% disc. 25% disc. 30% disc.Disc. % to Hold 2012

RateDoe, Lawyer 1 556$ 521$ 487$ 27%year over year % change 10% 3% -4%Doe, Lawyer 2 484$ 454$ 424$ 27%year over year % change 10% 3% -4%

Pricing Analysis

Stryker Rates

Standard Rates

Pricing Analysis ('13 vs '12)• 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

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BEST PRACTICE: UNDERSTANDIMPACT OF POTENTIAL RATE INCREASES

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BEST PRACTICE: INCORPORATE EXTERNAL BENCHMARKS

FORBES: FMC’s TALE OF THE TAPE

2002 FMC Technologies

$1.8B/ 8Total sales/

No. full time attys

$14.3 M($2.8M internal; $11.5

external)

Total legal spend

20% Percent on AFAs

2.8 Average firm evaluation

2013

$7.1B/ 12

$9.5 M($3.1M internal; $6.4 external)

95%

3.3

DEPARTMENT SNAPSHOT: DEMONSTRATE OVERALL VALUE

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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

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INTERNAL CONTROLS TO ENSUREACCURATE 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

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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)

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LEARN NEW WAYS TO MAKE THE NUMBERS WORK FOR YOU!

QUESTIONS?

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CONTACT INFO

BERNADETTE BULACANDirector, Market Development, Corporate LegalThomson Reuters

Phone: 425-732-5546bernadette.bulacan@thomsonreuters.com

Twitter: @InHouse_Bern