Post on 14-Apr-2018
Metrics that Ma+er
Gary Chadick, SVP, General Counsel and Secretary, Rockwell Collins Gary Nelson, VP, Legal Opera@ons & Risk Management, Medtronic, Inc. Lisa Damon, Partner & Execu@ve Commi+ee Member, Seyfarth Shaw
Today • Open up some new thinking for you about metrics
• Share examples of “Metrics that Ma+er (MTM) in Ac@on” from innova@ve in-‐house counsel
• Get you to do some ‘on your feet’ thinking with your colleagues
Our panelists • Gary Chadick, Rockwell Collins
-‐-‐ Metrics that ma+er with internal-‐external teams
• Gary Nelson, Medtronic – Metrics that ma+er to execu@ve management
• Lisa Damon, Seyfarth – Wolverine: Metrics that ma+er in porVolio management
What you’ll learn from our panel • What makes a metric a “Metric that Ma+ers” • What MTM’s you can use to best manage costs, improve quality of non-‐financial results
• How to get data you need from inside and outside your organiza@on
• How MTM can help you engage/ lead teams • How you can use metrics that ma+er to strengthen your department’s posi@on as a strategic business partner
Rockwell Collins’ Law Group:
Re-engineered Its Processes For Engaging Outside Counsel And Achieving Great Results
Who We Are – Rockwell Collins
• A Global Aerospace And Defense Company Operating In More Than 60 Locations In 27 Countries
• $4.8 Billion in Sales (2012) – Operating Margins About 20% – R&D Investments ~ $900 Million (18% of Sales)
• A Balanced Business – 55% Government Sales – 45% Commercial Sales
• ~ 20,000 Employees
Who We Are – Rockwell Collins (Continued) • Commercial Systems
– Serves The Air Transport And Business & Regional Aircraft Markets – Aviation Electronics (Displays, Radios, Autopilot, Flight Management
Systems) – Cabin In-Flight Entertainment, Moving Maps And Cabin
Management Systems – Service, Repairs And Commercial Simulators – Flight Information Management (Flight Planning And Scheduling,
Trip Support)
• Government Systems – Serves U.S. And Non-U.S. Governments And Defense Contractors – Aviation Electronics (Cockpits For Fixed And Rotary Wing Aircraft) – Communication And Navigation Solutions (Handheld GPS And
Radios, SATCOM) – Surface Solutions (Targeting Systems, Soldier Systems And Military
Simulators) – Repairs and Logistics Support
Who We Are – The Office Of The General Counsel
The Office Of The General Counsel
• 65 Employees
• 3 Groups: Law And Corporate Secretary (21) Ethics And Business Compliance (12) Export And Import Compliance (32)
• OGC Annual Budget = $14.9 Million (2012) – Annual Outside Counsel Spend = $7 Million
Introduction To The Law Group Lean Project
• Using Lean ElectronicsSM And Six Sigma Principles – Value Stream Mapping
– DMAIC Methodology (Define, Measure, Analyze, Improve and Control) o Voice Of The Client In The Measure Phase o Force Field Analysis In The Control Phase And After The Pilot
• Re-engineered Our Processes For – Selecting, Engaging, Managing And Evaluating Outside Counsel
Why We Embarked On This Journey
• 2010 Voice Of Employee Survey – Lean Not Visible – Only 52% Agreed That RC Does A Good Job Of Improving Efficiencies
(i.e., Reducing Waste, Streamlining Processes)
• CEO Lean Renewal Imperative (FY11)
• Invited A Law Firm Partner To Speak About Her Firm’s Project – Used Six Sigma Tools To Re-engineer Their Processes
• I Saw Opportunity To Improve Our Processes And The Way We Engage With Outside Counsel
What We Accomplished
• Developed A Lean Workflow Chart Housed On A TeamSpace Site
– Depicts Steps In The Process For Selecting, Engaging, Managing And Evaluating Outside Counsel
– Contains The Tools, Templates And Agreements For Each Step In The Process
• Utilizing Alternative Fee Arrangements On All New Matters Over $50,000 (And Some Under $50,000) – Focus On Success Fee And Fixed Fee Arrangements
• Conducting Lessons Learned Assessments (Four Per Attorney In The First Year)
• Increasing Utilization Of Request For Proposals
(A1) OGC Lean Workflow - Selecting and Engaging
Start
A01
Receive New Matter and Notify
GC
Requirements for Notification and Approval of Matters with the General Counsel
A03
Review Dashboard and
Reports
Dashboard
Completed Lessons Learned Report(s)
Detailed Results of Outside Counsel Scorecard
A04
Develop List of Potential OC to
Consider
On-Line Resources (Chambers, ACC, Best Lawyers, etc)
A06
Determine Whether to Send
Out SF-RFP
SF-RFP Decision Tree
A07
Continue Discussion with Potential OC,
including Essential Terms A08
Select OC and Obtain GC Approval
Requirements for Notification and Approval of Matters with the General Counsel
A02
Consider AFA
AFA Decision Tree
Checklist Determining Appropriateness of Using an AFA
Checklist for AFA Discussion with Outside Counsel
Yes
D- SF-RFP Workflow
A05
Narrow OC Selection Using
Metrics and Conduct Initial
Conversation with OC
Dashboard
Lessons Learned Report(s)
Guidelines for Initial Conversation with Outside Counsel
A09
Draft and Execute Engagement
Letter and Attachments, as
necessary
Engagement Letter without Terms and Conditions of Engagement
Fixed Fee Insert Entire Matter -Litigated
Fixed Fee Insert Phases - Litigated
Fixed Fee Insert - Non-Litigated
Success Fee Insert - Litigated
Success Fee Insert - Non-Litigated
First Engagement with Outside Counsel
Subsequent Engagement with Outside Counsel
A10No
A11
What We Accomplished (Continued)
• Created A Scorecard Measuring Outside Counsel’s Performance (In FY11, Generated 46 Scorecards)
Example Of A Scorecard
[Insert Attorney’s Name Here] 3.85
A Great Success
• Achieving Excellent Results While Controlling Costs
• New Processes And Templates – Efficient And Promotes Use Of AFAs
• Savings of $598,000 Over Past 10 Months
• Strengthened Relationships With Our Outside Counsel
Metrics That Matter
• Metrics Related To The Law Group Project – Total Dollars Saved Using AFAs ($598,000 Saved On $3.4 Million –
17.4%)
– Percentage Of Total Spend Using AFAs (49%; 58% If You Include Discounted Hourly Rates)
– Number Of New Matters Using AFAs vs. Standard Hourly Rates (By Quarter)
– By Attorney, Number Of Matters Using The Different Type Of Fee Arrangements
Success Fee Matters by Subject Matter
16 1 2 0 2 3 1 0
0 20 40 60 80
0 2 3 4 0 3 0
63
0 20 40 60 80
0 0 0 9
0 0 0 0 0
20 40 60 80
Fixed/Flat Fee Matters by Subject Matter Capped Fee Matters by Subject Matter
Metrics That Matter • Legal Department Metrics
Customer Satisfaction: Export Licensing - Meeting Business Need Dates 98% 93% 99%
Customer Satisfaction: Product Classifications - Meeting Business Need Dates 98% 98% 99%
Managing Operating Costs to Plan $14.9M ≤ $14.2M (FYE) TBDAchieve New Import Duty Cost Avoidance/Savings $1.3M $1.5M $2.0M
Cost Savings from Use of AFAs (%) 17% ≥ 17% ≥ 20%
% of Total Spend Using AFAs 60% ≥ 60% ≥ 80%
Patent Filings XX XX (FYE) TBD
Diversity & Inclusion: Leaders Participate in at Least 2 Activities 100% 100% 100%
Diversity & Inclusion: Non-leaders Participate in at Least 1 Activity 100% 100% 100%
100% Lean Certification Associate 100%Champion 100%
Associate 100%Champion 100%
Associate 100%Champion 100%
Complete VOE Focus Area Actions 100% 100% 100%
Use of Outside Counsel that are Diverse 48%Average ≥ 40%
of Total OC Hours
Average ≥ 50% of Total OC
Hours
Long Term Goals
Sustainable and Profitable Growth
Talented and Motivated People
Goals to Support Rockwell Collins
Vision
Office of the General CounselOperational Measures FY13 GoalsFY12
Forecast
Superior Customer Value
= Missed = Met = At Risk (Forecast Only)
KEY:
Office Of The General Counsel FY13 Scorecard
Medtronic Metrics that Matter for Executive Management
What are we trying to do with metrics at Medtronic? Answer Tough QuesAons
• Top Ten Reports: by Firm, by Timekeeper, by Matter
• Preferred Provider Network (MP3) Spend
• AFA Spend Summary
• Drive-by Timekeepers
• Workload by Preferred Firm
• Timeliness of Invoicing
• Executive Committee Dashboard – Key Matters
• Legal Spend by Firm – Budgets & Forecasts • Average Hourly Rates by Firm • New and Resolved Matters and Length to
Resolution • Patents Filed and Issued • Total Outside Professional Services by Year • Legal Spend as % of Total Revenue • Open Matters by Matter type
Examples:
Paint a Comprehensive Picture
Raise Tough QuesAons Trigger AcAon | Ignite a Response
Reduce OrganizaAonal Amnesia Improve Predictability
Start with repor@ng objec@ves
What does the report look like?
Where do we get the informa@on?
Answer Tough QuesAons Paint a Comprehensive Picture
Raise Tough QuesAons Trigger AcAon | Ignite a Response
Reduce OrganizaAonal Amnesia Improve Predictability
Produced Monthly Covers Top 15 Legal Ma+ers
Descrip@on & Status Updated Manually Working on Automa@on from Ma+er Management
Case Study: Significant Ma+ers Report
Case Study: Financial Summary Report
Case Study: Trends and Composi@on
Case Study: Pies, Bars and Suppor@ng Detail
Case Study: Timekeepers
Using Metrics to Manage a Portfolio Wolverine World Wide Trademark Case Study
Overview • 4,000 marks, 800 domain names, 190 countries • Wanted Lean approach to help drive consistency, quality, efficiency, lower cost
• Program now in Year 2 • 9 metrics for performance, 5 of which influence firm compensa@on
• Alt fee structure for porVolio, not per ma+er • Efficiency improvements of 15-‐20%
Metrics Ma+ered -‐ 2011 • Prosecu@on produc@vity – number of hours per ma+er worked on per period
• Specimen response – days from specimen request to specimen delivery
• Disbursement control – incen@ve based on keeping foreign associate disbursements below a certain level
Metrics Ma+ered -‐ 2012 • Prosecu@on produc@vity • Specimen response
• First ac@on approval – percentage of U.S. applica@ons that have an approval as their first ac@on
• Renewals efficiency – reduc@on in overall cost per renewal
• Opposi@on ini@a@on efficiency – days from receipt of watch no@ce to first ac@on on an opposi@on
• Domain name takedown rate – percentage of problem domain names we are able to successfully take down
29 | © 2011-12 Seyfarth Shaw LLP
• Key Takeaways ► Average renewal cost continues to beat target YTD in 2012.
• Next Steps ► As noted in last report, we are targeting an average 15% decrease in
paralegal billable time over the next three periods starting with period 6, based upon further training of our renewals specialist. In period 6, billable hours were down by over 40% from period 5.
$931 $931 $846
$750 $795 $782
0
200
400
600
800
1000
1200
1 2 3 4 5 6 7 8 9 10 11 12 13 Thru Period
Renewals Efficiency - Average Cost per Renewal 2011 Average 2012 Target Avg Cost YTD
$830 2012 Target
$1,038 2011 Average
30 | © 2011-12 Seyfarth Shaw LLP
• Key Takeaways ► Metric suffered an uptick in period 6. We have identified two anomalous 37-day
initiation periods in period 6 that distorted the average. We are examining the cause of these outliers.
• Next Steps ► Upon identification of cause of the anomalies in period 6, we will devise a solution.
We anticipate finding slight delays (over periods 4 and 5) in each phase of the process, rather than one single cause. If so, we will expect to see improvement in period 7.
► We look forward to introducing to Wolverine our new watch reporting “app,” which is in final testing, to enhance our data with respect to this metric.
23 23 20.14 18.87 17.47
19.82
0
5
10
15
20
25
30
35
40
1 2 3 4 5 6 7 8 9 10 11 12 13
Opposition Initiation in Days 2011 Aug-Dec 2012 Target 2012 Average YTD
35 Day Average 2011 Aug-Dec
28 Day Average 2012 Target
Discussion • “My favorite metric” • Why it ma+ers most
Table exercise • Iden@fy 3 “metrics that ma+er” that you will use to demonstrate progress and/or challenges.
• In the spirit of transparency, these 3 metrics that you will share with the board must also be shared with your internal clients, law team, law firms.
• Factor in how you will collect data. • Report out from facilitators.
Metrics that Ma+er
Gary Chadick, SVP, General Counsel and Secretary, Rockwell Collins Gary Nelson, VP, Legal Opera@ons & Risk Management, Medtronic, Inc. Lisa Damon, Partner & Execu@ve Commi+ee Member, Seyfarth Shaw