Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY Offices of The Coca-Cola Company, Hammersmith, London 28 June 2011 Participants: Name Job Title Company David Eveleigh BT Group, London Pietro Galizzi Nick Hornung Janice More Sandra Mori Francesca Petralia Martha Rees Bill Venema General Counsel, Global Services General Counsel General Counsel Group Legal European General Counsel General Counsel Corporate Legal Affairs Assistant General Counsel Deputy General Counsel Tim Glassett Advisor E. Leigh Dance President, GCLC facilitator Saipem, Milan Istithmar World, Dubai HJ Heinz, London Coca-Cola, Milan Telecom Italia, Milan & Rome DuPont, Wilmington, Del. CSC, Washington DC metro area GCLC Advisory Board, Huntingdon Beach, Calif. ELD International, Inc., NY and Brussels Summary Agenda: 9-10:15 Introductions and Exchange: Members briefly provided background on their company and the structure and key challenges of their legal function. 10:15–12:15 Managing a Remote Team of In-house Counsel. Presentation by Tim Glassett, former General Counsel of Hilton Hotels (GCLC Advisory Board). 12:15-45 Buffet Lunch and discussion: Group questions, discussion 12:45-1:30 Team Leadership exercise led by Tim Glassett: understand elements of int’l team leadership and how to define requirements of international in-house counsel positions. Used Korn/Ferry Int’l Lominger Leadership Architect sort cards. www.Lominger.com 1:30—2 GCLC Benchmarking and telecom/webinar topics: Leigh Dance facilitates a discussion on topics of most interest for members, and preferred formats. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 1 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY 2:00–3:30 Law department as profit center: Leigh Dance, Martha Rees of DuPont. LexisNexis Nov. 2010 report, The Profitable Legal Department. 3:30 -3:45 Debrief: Best parts of the meeting, areas for increased focus, evaluations Introductions – Members shared what they hope to gain from GCLC participation Themes : - competence and coverage of legal risks across major distances; - integration of a far-flung team of in-house lawyers; consistent approaches, practices; - Professional and skill development for in-house lawyers working in international companies; - Improving global contract management function when it resides in legal - Income generation for the law department; - promoting value of the law department; - Compliance/ethics across many geographies; - Handling data around the world - Social Media (to a lesser extent) Individual comments: We are growing the legal function in developing markets, and trying to make inhouse lawyers in remote offices feel part of global legal function. We want them to see the company as a place to go and grow. We are interested in making the law department a profit center. We are always pressured to show the legal function’s value. We want to have a better sense of what approach and time scale is optimal. 80% of our lawyers are in other countries than headquarters. Compliance is particularly important to us, particularly anti-corruption in developing markets. I want to ensure all compliance procedures are followed worldwide. I want to share experiences in managing a multi-cultural, remote legal team. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 2 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY Would like to share challenges and best practices on improving contract management support around the world, and also are abilities in negotiating various markets. We have lawyers covering 35 jurisdictions, and the function is decentralized. I’m most interested in how to integrate risk management into business; dealing with data globally, anti-bribery issues, response to regulation, and managing a global team. We’re interested in sharing practices in trying to create a compliance culture across the organization, after some serious wrongdoing issues over the past two years. We are truly international, with operations in 200+ countries. My challenge is development of people in a flat structure—how to give people opportunities for growth. Not everyone is mobile. We also are interested in exchanging views on the proper role for legal in social media. We have a number of areas to look at with others in the group: keeping and developing talent at the same time we reduce costs, building lawyer skills – particularly negotiating -- in working on diverse projects globally, and managing teams remotely. Managing a remote team of in-house counsel: Tim Glassett: experience in legal function management in 3 industries, most recently as General Counsel of Hilton Hotels, covering 80 countries. Over 20 yrs in law department management, my key learning was in a group like this. I enjoyed being #2 lawyer more than the General Counsel. Key points: Eliminate roadblocks to success so that in-house lawyers can do their jobs Compensation geographically must be addressed. Dealing with corporate human resources on lawyer levels and compensation is difficult for many members. Asking HR to do the regional benchmarking helps understanding. Minimize administrative burdens so that your people focus on legal work. Identify nonlegal work and find other ways to have that work completed. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 3 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY Managing a remote team of in-house counsel, continued Roles & responsibilities for in-house lawyers in various jurisdictions is a big issue. One member recorded time on tasks internally, used as base to define and protect five key categories of work and re-direct everything non- legal. It helps to hire a talented law department administrator. One member promoted an administrative support staffer to “legal assistant’; she manages the function’s budget. Time spent on emails and social media can be productive or not. Some members have email policy. One member put the ‘email etiquette’ rules on a mouse pad. Recommend marketing techniques to implement initiatives in legal function. Accept that in-house lawyers may be on a dual track—some may move into business roles. Helpful to enable them to move back (focus rotations on more junior people). Legal function with remote offices worldwide it can benefit from a career path grid. This helps to specify what is expected from lawyers at various levels, and how lawyers can develop skills required. Lawyers need to be good leaders. They can gain developmental opportunities outside the function: pro bono projects with internal clients. Important to develop ‘soft’ skills for working effectively, such as dealing with ambiguity, setting priorities. Other skill development opportunities include: rotate in-house lawyers to other regions to substitute staff on maternity/other leave; secondments into law firms – ask firms for a specifically-focused exchange. Face-to-face contact with other global in-house lawyers helps teamwork. Lawyer retreats are an opportunity to sell law department strategy. One member could not gather team globally, so packaged and bundled gatherings at times of key business events during the year. Members note motivational power of meetings, meeting corporate executives, etc. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 4 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY Shaping the Global Counsel Leaders Circle (group discussion): Benchmarking studies for GCLC members should be short and focused on the practical. Suggestions for benchmarking topics: e-mail policy, social media policy, structure for emerging markets coverage; KPIs and metrics, what are you measuring and how do you get the info; marketing the legal function; GCLC opt-in teleconference briefings or webinar topics recommended by members: 1. knowledge management; 2. developing a global trading policy –terms/procedures, sharing of parameters/guidelines, procurement activities; 3. successes and challenges with contract management internationally; 4. contract compliance management; 5. anti-bribery compliance in emerging markets; 6. imbedding a compliance culture in the business; 7. data handling, data protection, privacy handling; 8. developing authority matrixes, delegation of authority across business in a way that works practically; Other interests for teleconference briefings or topics for in-person meetings: Defining the work of the in-house legal function Staffing with qualified lawyers vs. non-lawyers Country-specific spotlight sessions: important new legislation, practicalities Career development for Global Counsel Leader Circle members Developing legal staff to move into the business (or rotate through business and back to legal) Experience with LPOs, alternative sourcing – how you resource legal demand in the businesses you serve Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 5 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY GCLC members ask questions to peers: Who uses preferred panel law firms? Five of firms use panels. Some have sophisticated panel management, including formal review every year; track spending by firm, diversity, resourcing. One function collected law firm info on Sharepoint and created annual scorecard for every firm, with input from every lawyer. Post on intranet with stats of firm. Managed by law dept administrator. What is your approach to records management? A number of functions have non-lawyer records mgmt team. Some members have functions not run in legal, but some lawyers and GC are on steering team. Electronic discovery is key issue for records management. One member developed a records management policy ten years ago with limited periods records are held. The company has ‘record management days’ annually to review all e-files, hard files, etc. – ‘spring cleaning.’ Every employee participates. Law department as profit center When corporate law departments present actions that bring significant value to the company, other corporate executives take notice. Even if your own legal function is not interested in focus on recoveries, it is good to understand others’ efforts and results. DuPont case study, presented by Martha Rees. Rees: the key factor is changing the mindset; a journey to get lawyers and clients on board. Initially an aversion to introducing conflict in a client relationship. Reaction of internal clients. In reality the result of the efforts has been not much real litigation (though some years more than others). Issues rarely reach litigation. The Profitable Law Department publication (in materials) describes this implementation process. Important to get in front of lawyers & internal business clients to develop systematic ways to find money. DuPont created videos and PPTs for businesses and promoted results throughout Legal. Legal management voiced consistently that they values & pay attention to this initiative. Management encourages lawyers to look for opportunities to generate income. It is not our main job, it is one of our responsibilities. In DuPont the income generated is not used to offset legal budget. DuPont lawyers are still held accountable to legal budget. However, businesses pay attention and they see value Legal is bringing. It tempers the occasional idea to outsource the entire legal function. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 6 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY DuPont started this effort in 2004. Original motivation came from senior legal management. We had a cycle where every 4-5 years the budget would be blown out by a major litigation. We needed to balance this and quantify our value day-to-day. Value has taken off in ways DuPont never expected. DuPont has generated over 2 billion USD since 2004 through the law department’s recovery efforts. Each year one of critical operating tasks is to set a specific dollar goal for each areas in legal. Teams of lawyers develop goals, regions give input. Nothing is too small: a $10,000 recovery is also important. Results vary year to year: 2010 IP recovery large; small in 2009. Environmental law recovery’s impact one year was 4 cents per share. Question: how do you monitor IP infringement internally? Mostly internally, by getting the business to keep eye on it. Ex-CEO does competitive benchmarking – looks for patent infringements. Upside as legal dept. is that we are more focused on competitive intelligence process & organization. Involve patent & commercial lawyers. Question: how to avoid double counting? How do you package by P&L? Response: it all goes to business P&L. Internal accounting leads the effort to make sure the income is distributed correctly, and we work with them to get the full accounting. Question: Doesn’t it promote the wrong behaviors in business, building recovery into P&L? Response: It’s the businesses that decide; Legal provides input but business negotiates with corporate leadership. Figures are not in financial projections; they are purely incremental; we can’t include from accounting perspective. Challenges outside of US: many opportunities in IP enforcement. In 2010, Latin America brought in 40% of recoveries: smallest region by far in business size and number of lawyers, but led enthusiastically by the associate GC in region. Question: How do you get people thinking about it at the start? We had internal lunches to talk about it and give examples. We create a report every year which includes specific examples. New in-house lawyers and staff are briefed. Glassett: Similar program at Hilton. Made it a line item on bonus score card generated results. Big win for legal – we developed the recovery effort into a program that business can run themselves. Business gave credit to legal. Offset internal legal budget. DuPont summary: The biggest benefit is the way this approach pushes lawyers to work with internal clients on something positive. Global Counsel Leaders Circle 28 June 2011 London Meeting - SUMMARY Page 7 Global Counsel Leaders Circle London 27-28 June 2011 First Meeting SUMMARY First Meeting Summary Members share biggest benefits: - meet night before, get to know people before the full day of meetings. Good format. - Each member serves up ‘Best Idea” - one thing you have done you’re really proud of. - Share anecdotes in short format, and combine to do deep dive on two topics - honesty & openness of sharing -diversity of who is here – jurisdictions & industries (working to improve Latin America & Asia, Africa). -Advisory Board insight – Tim. Have one advisor at each meeting. Bruno Cova for next meeting - good for compliance topic, cross-border investigations - Mixture of soft skills & management side as well as legal technical issues Areas for Improvements/Changes -more time on fewer topics. Two topics/day, but without losing the free flow exchange -Get materials in advance in order to prepare -cover subjects useful to everyone, and capture best practices in follow up 8 Written Evaluations: Quality of meeting of scale of 1 to 10: Exceeded expectations: 6 7 ranked 8/10, 1 ranked 7/10 Met expectations: 2 Liked most about this meeting: - candor and good ideas shared by others; Practical approaches/best practice examples, approaching areas of opportunity & risk; everyone’s contribution (not only speakers) was fundamental, practical issues, solutions; I could not imagine how many good ideas everyone could put on the table; It was a first meeting and we were able to do build something worthwhile together ; The ability to exchange views among ourselves; Openness & great ideas; Picked up some fascinating areas of interest, a lot of food for thought; The people I met, some of focus areas of discussion; Leigh as facilitator: excellent! exactly the right balance; Useful exchange of info with a candid attitude, interesting to hear from different industries, composition of circle’s members, openness to discussion; I appreciated the openness that everyone exhibited and the best practices shared; geographic and sector diversity of participants Liked least about this meeting: - would like to have more time for deeper discussion on certain topics; Too many topics for discussion/struggle for keeping the time; Too many subjects – not enough depth; nothing really; maybe materials distributed in advance; a slide presentation can always be very helpful to guide discussion and we had none; time – too little – tried to jam too much into a short day and “deep dive” into 1 or 2 issues would be good. 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