The 2012 IC10 winners

The most inventive legal teams in the country tapped into powerful ideas to transform and renew their departments

If you listen closely, you can hear it—the steady rumble of new ideas within corporate legal departments. Look up and you’ll spot little brainstorms constantly hovering over in-house lawyers’ heads, occasionally sprinkling some inspiring thoughts. But it is only when legal leaders bravely pierce these promising clouds of creativity that they can unleash a true deluge of innovation.

On the following pages, InsideCounsel profiles inventive legal teams that tapped into their powerful ideas and collaborated to transform and renew their departments and companies. This year’s IC10 winners tackled common challenges such as cutting costs, streamlining internal operations, better managing outside counsel, mastering e-discovery, overseeing IP and more. Their determination resulted in positive changes within their companies. And those brainstorms? They’re not subsiding yet.

Dan Liutikas, Robert Rohrman and Tim Tyler

 

CompTIA: Fixing the Flow

See an exclusive video interview with CompTIA's CLO about its innovative solution.

If you want something done right, and cheaply, you should do it yourself. When Dan Liutikas joined non-profit information technology trade organization CompTIA, Inc. as chief legal officer in 2009, he noticed on day one that the company’s system for matter intake was “disjointed,” to say the least. Legal issues were pouring in by email, and the department kept track of them on a spreadsheet, which, especially when multiple people were involved, allowed things to slip through the cracks.

CompTIA is a small organization, with just three lawyers in the legal department and 150 employees total, and Liutikas and his team dismissed commercial matter intake technology as too expensive. Searching for an internal alternative, they noticed that the ticket system for their IT helpdesk had the kind of efficient workflow they were looking for. In talking with CompTIA’s IT director, Liutikas learned that the back end of the ticket system was quite flexible, and that the fields could be changed to apply to legal matters. “We started taking a real hard look at it,” Liutikas says, “and made a determination that we could make this work, with some elbow grease.” 

After a couple of months working with the IT director, what they ended up creating streamlined the department’s operations, costs only $1,500 per year in licensing fees and is, in Liutikas’ opinion, more robust than lower-end commercially available systems.

All CompTIA employees can access the legal matter ticket system with their normal usernames and passwords. They enter the type of matter they want to open, its timing and urgency, and the system creates a set of custom fields for them to fill out that ensures the legal department gets all the information it needs about the issue without having to chase it down via email. Before the matter ends up on Liutikas’ desk, though, it goes to the employee’s manager or department head for approval. In the past, employees sometimes submitted issues without their superiors’ knowledge. This added step eliminates that problem. After receiving approval, Liutikas can review the matter and assign it to either internal or external counsel.

Another advantage to the system is that it keeps all communications and documents related to an issue in one place. That way, if someone needs to be added to a matter halfway through, he has access to all the related notes so far. If the matter needs to be signed, CompTIA uses an e-signature product called DocuSign that it began implementing just before it rolled out the ticket system in 2010. According to Liutikas, before adopting DocuSign, it took the legal department three to four days on average to get a signature. Now it takes the department less than an hour. “The workflow of the ticket system with DocuSign is one of the best one-two punches I’ve seen,” Liutikas says.

Like with any change, it took time for CompTIA’s employees to adjust to the new system, but Liutikas says he feels it’s been worth it. “Initially there was some push-back, as there normally is with any cultural change,” he says. “It’s not as easy as emailing something, but I think the benefits of [the system] over the past two-and-a-half years have really shown themselves.”

-Julie Beck

Darryl Gibbs

 

AXA Equitable Life Insurance Co.: Ensuring Inclusion

Incorporating more diversity into a company’s culture is a priority in Corporate America. Although many legal departments embrace the idea, it’s often a challenge to execute. The pool of high-quality, diverse candidates for legal department positions is usually small, and when jobs become available, they’re highly sought-after. Many legal department leaders have called on fellow counsel to take the pipeline approach—reach lawyers or potential lawyers early on, and help prepare them for a life in law.

That’s exactly what AXA Equitable Life Insurance Co.’s legal department did in 2009 when it partnered with The Ronald H. Brown Center for Civil Rights and Economic Development at St. John’s University School of Law in New York and law firm Hughes Hubbard & Reed to create a comprehensive internship program for minority students. Their goal: “To promote diversity in the legal field and encourage students from historically underrepresented backgrounds to continue with their education and pursue the study of law,” says Darryl Gibbs, AXA’s vice president and counsel.

What is now a full-scale, comprehensive internship program started off as simply the Brown Center’s Prep Program, which helped undergraduate students interested in law prepare for the LSAT, among other things. When Gibbs and AXA’s then-GC Dick Silver attended an alumni event at St. John’s and learned about the program from its executive director, Professor Leonard Baynes, they decided to expand it, inviting a law firm to round out the partnership and experience for the students. (Hughes Hubbard was the first law firm to partner on the program, and now Paul Hastings also has signed on as a partner.)

Here’s how it works: For four weeks during their sophomore year, Prep Program students do an internship through the Brown Center. They come back for nine weeks the next year to prepare for the LSAT. At that time, each student is assigned a mentor— either from AXA or a participating firm. The summer before they enter law school, the students do a 10-week stint at either AXA or a law firm to gain some real-world legal department or law firm experience—working directly with in-house or law firm lawyers and maintaining close contact with their mentors. Finally, through their first two years of law school, the students continue to work closely with their mentors when they need guidance or support.

The students’ time at AXA is well spent. “Two or three weeks in, they have an avalanche of work,” Gibbs says. “They do a lot of research, working with Westlaw and answering questions. They sit on calls for negotiating contracts, and they review termination letters. We keep them busy.”

The program also gives the legal department lawyers an opportunity they don’t always have. “Our lawyers want to give back,” Gibbs says. “But because they are so busy, they don’t always have time or know how to find the opportunities to do that. This program provides a pro bono opportunity for them to engage the students and share their experiences.”

Everyone’s commitment to this program has paid off. In the past four years, more than 25 students from the Brown Center have partnered with AXA. According to the Brown Center’s Prep Program statistics, students who have participated in this program have increased their LSAT scores by an average of 10 points. Additionally, program participants have earned scholarships together totaling approximately $6 million, and more than 80 percent of program graduates have been accepted to at least one law school.

“It has been a great experience for the students,” Gibbs says. “They get a chance to create a network. But they also get a chance to work firsthand with seasoned professionals.”

-Cathleen Flahardy

Allen Waxman, Michelle Mattei, Marc Singer and Brian Conway

 

Eisai Inc.: Preservation Innovation

The growing demands of electronic discovery, including the duty to preserve electronically stored information (ESI) that could be relevant in litigation, have sapped the resources of many legal departments, and Eisai Inc.’s department is no exception.

The manual process in place to implement and monitor legal holds on relevant ESI was taking too much lawyer- and paralegal- time at the New Jersey-based U.S. pharmaceutical subsidiary of the Japanese company Eisai Co. Ltd. So the legal department developed a project plan and researched various off-the-shelf legal hold technology solutions. It was preparing to award a contract to a software provider in summer 2010 when bad news arrived: The company had frozen all capital expenditures for fiscal years 2010 and 2011. An appeal to then-General Counsel Douglas Snyder resulted in the mandate to be creative and figure out a way to solve the problem without a capital outlay.

“We formed a team to brainstorm, and that’s how our eHold system was created—out of pure necessity,” says Michelle Mattei, operations officer in Eisai’s Office of the General Counsel. The team’s idea was to use the company’s existing Lotus Notes system to build an eHold solution, creating the result it sought without spending a cent in capital funds or incurring annual licensing or maintenance fees.

“One really important thing is that we took the time at the outset to really map out a plan,” says Associate General Counsel Brian Conway. “A certain amount of education had to happen, with lawyers educating the IT people on the functionality they needed and the IT people educating the lawyers on what was feasible and what wasn’t.”

Mattei served as project manager for the team, which included Conway; Senior Litigation Paralegal Marc Singer; and the former head of litigation, Naomi DeSilva. They worked collaboratively with contract IT programmer Charles Tauken to build a Lotus Notes application that creates and tracks document preservation notices, custodian acknowledgments, alerts of when quarterly reminders are due as well as the reminders themselves and preservation termination notices, among other items. It also includes a dashboard summary of all notices and provides a full audit trail of transactions.

Mattei estimates the cost savings from developing the system in-house with available technology at approximately $500,000 in system purchases, $75,000 in annual licensing and maintenance costs and $10,000 in related hardware purchases.

In addition, she says the system offers enhancements not available in many off-the-shelf products, including better graphics capabilities useful for reports with visual elements, and provides legal team members easy access to information in query form without the need for IT support.

In addition to upfront planning, Conway says the project’s keys to success were having the right team members and “a strong project manager (Mattei) who bridges the IT-speak world and the legal world.” 

As for the results, he adds that since the eHold system was launched in September 2011, it has freed up resources and assured a consistent legal hold process.

“It allows you to sleep well at night, knowing the company is well-protected in terms of process to assure reasonable efforts are taken to preserve documents,” Conway says. 

-Mary Swanton

Bob Harchut, Jacqui North, Rick Richardson, Elpidio (PD) Villarreal and Brennan Torregrossa

 

GlaxoSmithKline: Veritable Value

In-house lawyers know they’re valuable to their companies. But communicating that value to the business side can be a challenge. Last year, the legal department at the Philadelphia corporate headquarters of the London-based multinational pharmaceutical company GlaxoSmithKline PLC (GSK) rolled out three programs to demonstrate its global worth.

Two of the programs—MASTER (Maximizing Savings Through Early Resolution) and NESTOR (Negotiation Excellence Skills Training for Optimal Results)—aim to boost the skills of GSK’s more than 350 lawyers in more than 60 countries, says Jacqui North, director of legal strategic projects at GSK. The idea for MASTER and NESTOR came from Senior Vice President of Global Litigation PD Villarreal, who implemented similar programs when he worked at General Electric Co. and Schering- Plough Corp.

“The MASTER program came from the recognition that addressing and identifying problems early on will result in reducing the overall magnitude and cost of the issues,” says Rick Richardson, vice president and associate general counsel.

The first step of MASTER is to use early case assessment to quickly understand and evaluate the problem. The second step is to resolve the dispute as early as possible.

Since launching MASTER in the third quarter of 2011, the GSK legal team has completed about 50 early case assessments and has been pleased with its lawyers’ newfound focus. The early dispute resolution aspect of MASTER also saved the company tens of thousands of dollars in just one case.

NESTOR consists of workshops that help GSK lawyers improve their negotiation skills. The program’s acronym is steeped in meaning as well. In Greek mythology, “Nestor is the trusted adviser of Agamemnon who was considered one of the greatest counselors and mediators,” explains Assistant General Counsel Brennan Torregrossa.

So far, 167 GSK lawyers have participated in NESTOR. The legal department’s goal is to have all of its lawyers participate in the workshops within the next two years.

GSK’s third value-building program prioritizes value-based fee arrangements. In January 2011, the legal department partnered with the company’s procurement team to launch a reverse-auction program called Outside Counsel Selection Initiative (OCSI). The program allows at least three law firms to submit competitive fee proposals for a certain matter. The GSK procurement team then creates an online Sourcing Room event that allows the GSK legal team to compare the proposals and make a final selection.

Bob Harchut, vice president of global external legal relations, says law firms have responded well to OCSI. “We are going to see through the metrics that we’re getting out of this which firms are really providing the best value, quality and results,” he says.

So far, GSK has hosted 57 OCSI Sourcing Room events that have resulted in more than $32.6 million in savings when the winning law firm’s budget based on hourly rates is compared to its final offer and more than $21 million in savings when the winning firm’s initial offer in the Sourcing Room is compared to its final offer.

GSK lawyers are thrilled that many business executives, including CEO Andrew Witty, are recognizing the value of MASTER, NESTOR and OCSI. “You know you have successfully penetrated a corporate culture when those folks use your terms in their lingo,” Torregrossa says.

-Ashley Post

Michael McKendry and Rick Musgrave

 

Husky Injection Molding Systems Ltd.: Comprehensive Concept

Protecting intellectual property is a challenge for any company, especially an international enterprise with legal teams scattered among the U.S., Canada, Europe and China. Such was the dilemma facing Husky Injection Molding Systems Ltd.’s IP team as it endeavored to encourage innovation while trimming legal costs.

The injection molding equipment supplier’s solution was a holistic IP strategy centered on two goals. “One was consistency in decision making, and the other was making sure that the people who were handling the issues were considering all relevant factors,” says Rick Musgrave, Husky’s senior counsel-IP and legal.

The strategy kicks in from the moment an employee suggests an invention, as the legal team evaluates each proposal using a series of standardized forms, including a “risk-assessment benefits tool” and “innovation scorecard,” which weigh the value of potential patents against their risks. If an invention scores highly on these initial forms, the team uses an “innovation matrix” to determine the number and types of patents to file (blanket, cluster, leapfrog, etc.). 

The forms ensure consistency, not only within legal teams, but also across jurisdictions. “We have IP issues in Europe, in China,” says Ilya Kalnish, Husky’s global intellectual property manager. “We have global customers and global competitors. So the process that we have in place helps us to align the differences in IP laws.”

Patent strategy meetings take place before cross-functional teams comprising representatives from various Husky departments, and Musgrave says this inclusiveness is one key to the company’s IP success. “There are times when I think a legal department in isolation can make a decision that’s risk-averse ... but it may not be the best decision for the business,” he says. “By having engineering in there, by having marketing in there, by having legal in there, you’re getting a decision that’s more wellrounded, and that’s better for the business.”

Another benefit to the business is the lawyers’ focus on cost control. To keep legal spend low, the IP team undertakes a patent- pruning process, regularly reevaluating patents to ensure that they still align with the company’s goals. By doing so, the department avoids paying maintenance fees for outdated or unnecessary filings.

The company also has cut costs in its dealings with outside counsel. Rather than enlisting law firm partners for every patent decision, the company only consults outside counsel for matters that rank above a certain score on a specialized “opinion tool,” which rates risk. When the IP team does seek additional input, it does so via report-outs, in which company employees can thoroughly probe outside counsel’s opinion. The team’s strategy has paid instant dividends: The opinion tool alone is projected to save $250,000 in its first year.

This success hasn’t gone unremarked. Husky executives frequent IP meetings, a fact Kalnish attributes to the legal team’s commitment to the company’s overall business goals. “The decisions that we’re making on IP are not abstract. It’s linked directly to what [executives] are trying to achieve with the business. And that’s what helps with the buy-in ... because they see the link between what we’re doing to support them and how they can achieve their commercial goals,” he says.

And it’s not just company employees who are impressed. Earlier this year, Michael McKendry, Husky’s general counsel and VP of corporate services, commissioned law firm Wolf Greenfield to benchmark the company’s IP strategy against those of other businesses. The firm’s findings, Musgrave says, reaffirmed the benefits of Husky’s comprehensive approach. “I think what really impressed them ... was the holistic aspect,” he says, “having these tools for almost all of the issues an IP team addresses on a day-to-day basis.”

-Alanna Byrne

Betty Zea, Sharon Abrams, Pamela Bosley, Paul Franz and Deborah Majoras

 

Procter & Gamble: Recession Response

See an exclusive video interview with Procter & Gamble's CLO about its innovative solution.

There isn’t a legal department out there that the recession hasn’t affected. But this economy’s challenges have made some lawyers even stronger. Aiming to tackle problems their 580-person global legal department has faced in the wake of the recession, the lawyers at Cincinnati-based multinational consumer goods company Procter & Gamble (P&G) developed a solution called Legal Renewal that they’ve successfully executed over the past two years.

Part one of Legal Renewal involved improving the legal department’s relationship with its business clients.

“When you want to become a fabulous partner, you must put yourself in your partner’s shoes,” says Deborah Majoras, chief legal officer and secretary. “We asked ourselves, ‘If I am a business colleague who is trying to get a product from the laboratory onto the shelf, what kind of support do I need from legal?’ We didn’t want to make them figure out when they needed a patent lawyer or an advertising lawyer. We wanted to give them full support from as early in the process as we could.”

To do so, the legal department created a comprehensive document called a PACT (patent, advertising, counterfeiting and trademarks) document that allows P&G businesspeople to receive a holistic, early legal review of major company initiatives.

“It helps the clients better plan and execute their initiatives, which is ultimately what we’re trying to help them do,” says Paul Franz, vice president and associate general counsel of global commerce. “They don’t exist to provide interesting legal questions for us; we exist to help them do their business successfully.”

Part two of Legal Renewal concerned managing costs and work as P&G continues to grow and expand into new markets.

“We have lawyers in 43 countries around the world, and some of them are the only lawyer servicing the entire  P&G business in a country,” says Sharon Abrams, vice president and general counsel, North America & global corporate services. “They need to support a broad spectrum of legal issues, but they can’t be an expert in every area.

Traditionally, a lawyer in that position has to go to outside counsel to access specific legal expertise. But we recognized that we have lawyers within the company who have specific expertise.”

To organize internal talent and create a seamless flow of information, the legal department created global Centers of Excellence that group together lawyers who specialize in certain practice areas. The Global Digital and Privacy Law Center of Excellence was particularly helpful in implementing P&G’s “Thank you, Mom” marketing campaign for the 2012 Olympics.

“We put together a toolkit that we could deploy globally to the business partners and legal professionals planning the Olympics initiative,” explains Pamela Bosley, senior counsel, global privacy and digital law. “Using that strategy, we were able to launch the program in 45 countries simultaneously.”

Finally, Legal Renewal tackled a problem that’s common among businesses: work-life balance. Although P&G did have programs and policies in place to address such challenges, members of the legal department were hesitant to take advantage of them. “We needed more role modeling,” explains Betty Zea, associate director and associate general counsel, innovation baby care, North America.

So Majoras and two general counsel announced that they were going to work from home two days a month. “They made people feel more comfortable that this was going to be a supported activity,” Zea says.

Since then, 83 percent of legal employees have taken advantage of flexible working arrangements.

P&G lawyers are excited to see how Legal Renewal evolves. “We continue to look for ways to simplify, reorganize and reenergize,” Abrams says.

-Ashley Post

Will Pringle, Reggie Davis and Sean Haley

 

Zynga Inc.: Game-ification

Be honest. How many times have you read an online company’s privacy policy?

If you answered “rarely” or “never,” you’re not alone. Most of the time, users can’t be bothered to click on and read a long, complicated block of text when what they really want is just to use the website. However, not understanding how their personal information will be used puts people at risk, and consequently, online privacy is something the Federal Trade Commission (FTC) is focused on. 

Online gaming company Zynga Inc. tackled this problem by turning its privacy policy into what its users like best: a game. The company, well-known for its FarmVille and CityVille games, decided to call its initiative “PrivacyVille.” PrivacyVille is a game board that looks similar to those seen in the FarmVille and CityVille games, with 14 areas that each correspond to a different aspect of privacy, such as advertising, passwords and data storage. Users can click on these areas to learn more about them, and once they’ve read them all, they take a comprehension quiz. Success on the quiz is rewarded with Zynga coins that users can spend in other Zynga games. This makes PrivacyVille, according to Zynga General Counsel Reggie Davis, “the first incented privacy policy on the Internet.”

Working with game and engineering teams, the legal department spent about four months developing PrivacyVille. Part of that development included getting the company’s privacy policy graded at an 8th-grade reading level by a Ph.D. linguist so that it’s a lot simpler to understand than a typical legalese document, especially for Zynga’s younger users. Davis says it was challenging to balance making PrivacyVille both informative and fun, especially because it’s “more of an informative tutorial” than an actual game with multiple layers and levels. “We tended toward more informative,” Davis says.

PrivacyVille rolled out in July 2011, and since then, the company has seen a 25-fold surge in visitors to its online privacy center and a 75 percent increase in the time spent reading about Zynga’s privacy policy. Of the users who start PrivacyVille, 40 percent finish the entire tutorial. And, according to Davis, the FTC loves it. “We’ve definitely been a poster child for them of a thoughtful company that’s moved the ball forward around privacy,” he says.

Zynga is considering expanding PrivacyVille to include a mobile version, but the company’s commitment to user privacy doesn’t stop with its own products. Davis felt that Zynga, the largest app provider on Facebook, had a lot to offer other, smaller app providers with fewer resources. So, the company created what Davis calls an “apps coalition group.”

“We’ve hosted multiple meetings at Zynga where a lot of the other application providers can come and learn from us,” Davis says. “We felt it would be helpful to lead the other app providers, bringing them together to talk about core principles that we want to accomplish on the Internet.”

Back when PrivacyVille was just a germ of an idea in the collective mind of Zynga’s legal department, the company had a massive privacy training session for all of its employees. It also handed out T-shirts to each person, the slogan of which effectively sums up the company’s stance: “User privacy is no game.”

-Julie Beck

Lauren Giammona, Brian Levey, Rory Bens and Emily Ward

 

eBay Inc.: Consolidated Counsel

Every legal department has the same goal: to provide first-class legal services to its client while keeping costs down. And though that is often a motivator for many in-house counsel to put their best foot forward, for eBay Inc., it was the launching pad for an outside counsel management program that would ultimately maximize efficiency and save the company about $1 million a month.

As it was for many legal departments, 2009 was a tough year for eBay. Despite a struggling economy, “eBay was becoming more complex and moving quickly,” says Lauren Giammona, eBay’s senior legal operations manager. “We had to respond to meet the CEO’s goals, which included reducing spend.” Although outside counsel management wasn’t a new problem for the legal department, it was time to address it. “Our goal was to reduce expenses,” says Brian Levey, VP, deputy GC and assistant secretary, corporate at eBay. “Outside counsel management is an area where we can get the most bang for our buck.”

So the department launched a five-step plan to better manage its use of outside counsel. Step one was to create the Outside Counsel Management Committee, which consisted of representatives from across all practice areas and business units that engaged outside counsel regularly. Its job was to analyze the current state of outside counsel expenses and figure out where the department could make improvements. “We wanted to increase the value of what these firms provided us,” Levey says. “And that led to step two: law firm consolidation.”

At the start of this initiative, eBay was using more than 400 law firms for its various legal matters. “We needed to set stricter parameters around which firms we use,“ Giammona explains. To do that, the committee had each practice area rank each firm they used from best to worst. From that feedback, the committee got a list of some of the most valuable firms. “And from there, we focused on a regional approach to see if we have firms in our roster with a global footprint and try to drive more work to them,” Giammona says. Now the list of firms consists of only 150, with eight considered to be “preferred.” 

With a new list of preferred law firms, it’s natural to need a more efficient and sophisticated e-billing system, which was step three in this initiative. “We needed more advanced auditing and reporting capabilities, permitting us to perform better comparative spend analysis across our firms and matters,” Giammona explains. So the team enhanced its outside counsel billing guidelines, which allowed it to gather metrics better—that is, measure its actual performance against its goals.

With the foundation laid, the next step was to make the new process turnkey for legal department staff. The team set up the Outside Counsel Management Workstream on the department’s intranet to guide lawyers through the process of engaging outside counsel from start to finish. It includes the consolidated list of outside counsel and covers when it’s appropriate to engage them, how to set a budget for a matter and guidance on thorough invoice review. “It’s been a helpful tool for our in-house counsel as well as those that are new to the team,” Giammona says.

Finally, the committee assigned each firm on the consolidated list a relationship manager. That person is responsible for understanding the entire relationship with a specific firm, reaching out to other legal department members to get feedback and working on annual reviews with the firm. Relationship managers also negotiate agreements for the coming year. “The point is to maintain an open flow of communication between us and the law firms that represent us,” Levey says.

eBay’s outside counsel management system has been in effect for 18 months, and the benefits have been significant. The department is collecting data through its new e-billing system that allows it to make informed decisions about when and how to use outside counsel. Using this data, it is maintaining a savings report, which allows the team to see its expense reduction across multiple categories, such as reduced invoices and alternative fee arrangements. According to the report, the department is saving roughly $1 million a month. 

“Coupling our analytics with the formalization of our processes and education efforts has resulted in a marked increase in the value of services being provided by our outside counsel while minimizing the impact to our budget,” Giammona explains.

Now that’s providing first-class legal services to a client.

-Cathleen Flahardy

Textron Inc.: Automated Vetting

Effectively and efficiently vetting business agents, vendors, distributors and contractors is one of the toughest challenges global companies face in complying with anti-corruption laws. The problem is acute because under both the U.S. Foreign Corrupt Practices Act (FCPA) and Britain’s Bribery Act, a company is liable for acts of bribery by its third-party business partners.

To address that challenge, Textron Inc., a $11.2 billion multi-industry company with operations in 25 countries, implemented an integrated system to manage the due diligence process for its approximately 1,000 foreign business partners. That process, which it implanted last year, is designed to identify issues indicating any potential risk of noncompliance with the company’s Global Anti-Corruption Compliance Policy (GACC).

“You need a baseline for assessing risk with all partners you work with in a global business,” says E. Robert Lupone, Textron’s EVP, general counsel and secretary. “One of the biggest challenges is ensuring partners will be compliant in engaging in business for you and with you around the world.”

The company’s previous manual process relied on business units to compile the required information on prospective overseas business partners, resulting in inconsistency across the enterprise. The business units forwarded the data to the corporate legal department, which reviewed it and manually maintained a complex spreadsheet to track the approval process. As the company’s global business expanded to represent 37 percent of the company’s revenues, the number of business partners multiplied, and so did the legal department workload.

“It was time-intensive, and there was the potential for error given that it was a manual system,” says Textron Compliance Counsel Robert Nelson. “We received feedback that the process was taking too long, both from the business unit and the business partner perspective. The workload was overwhelming the process itself.”

So in 2010, the legal department began a planning process aimed at building a more efficient and effective system. It sought input from stakeholders both in the business units and in other corporate departments.

“The way Textron went about fixing the problem and identifying a new approach was very collaborative,” Lupone says. “We used resources across the enterprise to be sure we would have buy-in. People underestimate how much upfront analysis and mapping out the process help you to address the compliance risks you face as a global company.”

Working closely with the IT department, the legal team decided a web-based application allowing business partner candidates to submit due diligence responses electronically would ensure consistency and simplify the process for all parties. Additionally, the team resolved to eliminate redundant steps in the review process, increase transparency for all stakeholders and improve reporting capabilities.

The resulting “GACC Module,” a web-based portal interfacing with a matter management system, allows prospective partners to complete due diligence questionnaires online and upload supporting documentation. Pop-up instructions and a frequentlyasked- questions document help create a user-friendly system.

Lupone says one important benefit is the ability to create different levels of due diligence requirements depending on the risk level of the country involved and the type of work the partner will be doing.

“We developed a protocol to use for business partners operating in a lower-risk environment—countries with higher Transparency International Index scores or partners involved in transactions that don’t involve government interaction,” Lupone says. “They may have a little less information to submit, and the review can be accelerated. So it really does ratchet up the efficiency of what we are doing.”

The new system speeds up the process by allowing concurrent, rather than consecutive, reviews by the business unit and corporate. It also simplifies the renewal process for business partners when their initial contracts expire by saving information submitted previously.

In just more than a year, the system has substantially reduced review times, according to Nelson, and he sees further improvements down the road. “We look at it as a point of continuous improvement,” he says, “and we plan to continually evolve the system to enhance the quality and efficiency of our process.”

-Mary Swanton

Intercontinental Hotels Group: Global View

Four years ago, when George Turner was negotiating his current job as executive vice president, general counsel and company secretary of InterContinental Hotels Group (IHG), he told the then-chief executive that he would only accept the position if all the company’s lawyers worldwide reported to him.

At the time, the legal department was split into a corporate legal team based at company headquarters in Denham, England, and four regional groups—Europe; the Americas; Asia, the Middle East and Africa; and China. Each region’s legal team had a regional general counsel reporting to the regional CEO that operated autonomously with few opportunities for collaboration. Turner brought them together as a unified group reporting to him, a step he believes was critical to developing and implementing a global legal strategy.

“I have a firm belief there is a benefit of scale in any organization,” he says. “Having good scale globally means you as a group can be more successful. It enables greater consistency and allows lawyers to have greater influence on the business by having a wider understanding of the business as a whole, rather than just of their specific region.”

To drive consistency of legal service, the legal leadership team comprising Turner, the regional general counsel and the head of the corporate legal team meet regularly to set an agenda for a global approach to business issues. For example, a crossregional group developed a global intellectual property strategy and implemented it with an online IP portal and trademark database the business units can access. It also created training for the business units on brand and trademark usage.

“We are a brand-led organization with an extensive portfolio that needs to protect and enhance the reputation of its brands [including InterContinental Hotels & Resorts, Holiday Inn Hotels & Resorts, Crowne Plaza Hotels & Resorts and Hotel Indigo, among others],” Turner says. “It’s important to have a global IP strategy, which we, as legal, lead.”

In response to the U.K. Bribery Act, which took effect last year, another cross-regional team developed a bribery policy, drafted standard clauses for inclusion in various business agreements and contracts, and developed a reference tool for the legal team to use. It also produced face-to-face training materials and e-learning modules in English, Spanish, Chinese and Japanese. To date, legal team members have trained approximately 1,000 employees on the bribery policy in face-to-face sessions, and another 7,000 employees have used the e-learning module.

Turner believes the globalization of the legal team has benefitted the business both by improving consistency of service and in creating efficiencies such as leveraging the scale of the department to drive the best deals with outside counsel.

Attorneys and paralegals benefit as well, Turner adds. Global legal conferences in 2010 and 2011, to which all were invited, included meetings, activities and social events designed to develop common ways of working, share best practices, and build strong working and personal relationships among the previously siloed group. Additionally, a secondment program allows attorneys to work for a period of time in a legal department office in a different region of the world, broadening their perspective on the global organization.

“Globalization is easy to say but very difficult to achieve,” Turner admits, pointing out that his seat on the executive committee of the company enabled him to make changes that otherwise might not have been possible. His advice to other GCs: “It’s about being bold. It’s about educating the business about the tremendous attributes of the legal function and what we have to contribute, and it’s about celebrating the successes of legal.”

-Mary Swanton

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