Session 507 A Leaders Guide to Delegating Legal

Session #507 – A Leader’s Guide to Delegating Legal Work: Stratifying Legal Services and Expanding the Role of Non-Lawyers in Your Department Law Department Management Tuesday, October 18, 2016 Mark Ross, Global Head Legal Process Outsourcing, Integreon

Introducing Contract Lifecycle Management LPO 2. 0 Contract drafting, review and redline KPIs, SLAs, metrics and analytics Contract negotiation > Negotiation playbook development and support Post-execution contract administration CLM technology consulting, implementation, and administration Template management and harmonization � � � Mass review and data abstraction

Best-In-Class Contract negotiation Playbooks – Essential when leveraging “alternative” resources § Part 1: Critical Playbook Components § Part 2: Benefits of Playbooks

Part 1: Critical Playbook Components § Process Mapping § Template Management § Documenting Negotiation Practices • • Articulating ‘must-haves’ versus ‘nice-to-have’ positions Formulating fall-back positions Explaining negotiation positions Enabling continuous improvement

Structure for Negotiation Playbook § § § § Documenting processes and workflows Capturing templates Standard Negotiation Positions – Issue Based Standard Negotiation Positions – Clause Based Articulating Fall-Back Positions Explaining Negotiation Positions to Counterparty Assigning Weight to Negotiation Positions (risk scores) Continuous Improvement

Question 1 To what extent has your legal department centrally documented processes and negotiation practices for your commercial agreements? § Little or not at all (most knowledge resides with individuals) § Lightly documented (for example, we have general guidelines for certain issues) § Heavily documented (we have thorough guidelines on processes/workflow, and on negotiation positions and tactics across agreement types, including fall-back positions)

Part 2: Benefits of Playbooks § Process Efficiencies • Improving turnaround times • Eliminating bottlenecks § Optimizing Negotiation Practices • Consistent and transparent results • Reduce negotiation cycles • Enabling delegation of negotiation to lower level legal resources or even to non -legal resources (self-help) § Template & Guideline Improvement • Updating content based on continuous improvement

Workflow and Triage. Allocation to the “Right” Resources § Part 1: Designing Triage-based Process Flow § Part 2: Benefits of Triage

Part 1: Designing Triage-based Process Flow § Contract Risk Scoring System • Differing levels of contract review § Resource Right-Sizing (mapping resources to risk levels) § Process Design

Multi-Shore, Technology Enabled, CLM Operating Model ? Onsite-based resources w lo kf rm r o o W latf p Bristol ge ua ign F e or ng La t? en g Ur x? m Co e pl Fargo / Austin Mumbai Beijing Boston Johannesburg London Noida New York Manila Washington D. C.

Sample Procurement Contracts Process Map Business owner initiates a procurement action Is contract >$10 k or >1 year? No Terminate Process Document threshold for initiating a phone call with legal to review overall deal Yes Business Owner LPO Resource Review Committee Associated Document * FREQUENCY * Per contract † Selected contracts Initiate call with legal/risk to discuss proposed contract † Submit contract CRRF Turnaround Time Target (Days) Review contract, propose language changes, and then route to appropriate Review Committee members per routing guidelines. See routing table. Is routing info complete? * No Consult and Edit Terms and Monitor TAT Complete and submit with each contract a CRRF * * Playbook/Review Guideliness Authorization matrix LEGEND Monitor review committee TAT. Escalate when Review completed within target TAT? * necessary Yes No Rush 1 3 1 4 2 1 1 Yes Review Committee Conducts review. [Consult business owners as necessary? ] * No Standard 2 Contract administrator consolidates all changes from review Committee, checks for completeness. Are all reviews complete? * No Generate review-status report and circulate to stakeholders Weekly Yes Negotiate any changes with providers Negotiations Complete? No Yes * Route revised contract for execution per authorization matrix, then collect signed agreement. * Input key terms to tracking database Send for counter signature and storage * * End Process

Question 2: Does your legal department triage contract negotiation based on risk? § § Yes – we have a comprehensive and formal process Yes – we have a partially formulated, basic process Yes – we have an informal approach (common sense) No – any and all contracts can be dealt by any given legal resource

Analytics in Contracts – A Key Benefit of “Alternative” Resourcing § Part 1: Introducing Analytics § Part 2: Pulling Data From Your Contracts § Part 3: Benefiting from Analytics

Part 1: Introducing Analytics § Insights into Process/Workflow Management § Insights into Contract Compliance (conformance to company standards/regulations) § Insights into Contract Performance • Service Levels | Milestone Triggers | Discounts

Sample Process/Workflow Management Metrics Week 8 § § § Progress: In 8 weeks – reviewed 352 contracts (i. e. 3, 861 pages in 182 files) Average Review Time per Contract: 0. 63 hours Accuracy: 99. 59% Operational Issues § § The new QC regime as per the final ratings given at the Review Meeting has been put in place We received error report for combined steady state week 6 to 8. The team’s accuracy has been more than 99% in these weeks Technical Issues § 100% uptime Performance Statistics 60 10 40 5 20 0 0 Week Week 1 2 3 4 5 6 7 8 Contracts Received Contracts Closed 100% 8 6 4 2 0 95% 90% Week Week 1 2 3 4 5 6 7 8 Target % Accura Week Week 1 2 3 4 5 6 7 8 General Critical Technical

Contract Compliance: NDAS – Most Frequent Clause Modification 38 37 37 No of Clause Modifications 36 35 35 34 34 33 32 31 31 30 29 28 Modification Definition of Confidential Information (CI) Carve-outs of CI Term and Survival of CI

Contract Compliance: NDA Fall-Back Utilization Rates 5% 10% 40% 5% 50% 10% 5% 5% Permitted Recipients CI Exceptions Adoption of Standard Fall Back Position (Tier 1) Adoption of Material Non-Standard Positions 40% 10% 50% 60% 30% Governing Law 25% 80% Retention/Destruction of CI 5% 5% 5% Term 5% 5% 10% Protecting CI 10% 30% Notification of Breach 10% Defintion of CI 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Adoption of Standard Fall Back Position (Tier 2) Immaterial Deviation

Part 3: Benefits OF ANALYTICS § § Improving Negotiation Practices Risk Management (real-time deviation analysis) Template Improvement (feedback loop) Risk Review Optimization (improved compliance)