1. Lean Forward and Beyond
Sponsored by Lisa Damon and SeyfarthLean Consulting
Panelists
Betsy Greaney – United Technologies James Michalowicz – TE Connectivity Trevor Torrence – Sears Holdings

2. Trevor Torrence Counsel & Manager Legal Operations
LEAN in The Sears Law Department
Trevor Torrence Counsel & Manager Legal Operations

4. The State of Many Legal Departments
Business clients relying on LEAN to tackle difficult operational questions, but the Legal Department not engaged
Processes owned by ‘do-ers’ with little or no process mapping and analysis for efficiency
Each new matter approached as unique and novel
Layering reactive changes on to existing processes without a deeper analysis
Siloed areas with only ad hoc cooperation efforts

5. Changes at the Sears Law Department

6. What made the difference
New leadership for the department – a new GC, two new VPs
Moving Operations to a GC reporting role
A GC with a focus on LEAN improvements
Quarterly town halls focused on LEAN achievements
Creation of a “Value Tracker” for the GC’s direct reports
A business environment that requires we do more with less

7. Early Signs of LEAN @ Sears

8. Signs of change in the Law Department
Attorneys attending Six-Sigma/LEAN training
A long list of requests for process maps
Senior attorneys requesting a kaizen… but using different terminology
An Operations team committed to learning and integrating LEAN into process improvement
A new openness to using routine feedback as method for identifying what works and what does not
An acceptance of technology as a benefit

9. A working LEAN process
Rate increases at SHC were handled differently across the department and rates lacked consistency
The process overly relied on a member of the finance team to manage requests
Some decisions needed to go to GC for approval, but not all decisions
Decisions needed to be based on data and criteria clearly presented
Resulting process should work to reinforce the process by making it transparent

11. How do we make LEAN flourish

12. How do we build a strong & lasting LEAN Program?
How do we adopt LEAN processes for big issues not simply “low hanging fruit” and make it stick?
How does an Operations Team support LEAN processes without owning all LEAN processes?
How do we measure success of a LEAN program, both per process and as a whole?
How do we move from a solutions discussion to a root cause discussion?
Will LEAN ever be embraced by attorneys? Litigators?

13. Jim Michalowicz Senior Manager – Legal Operations Business Performance
“Shooting for the Stars” The TE Operating Advantage Journey in the Law Department
Jim Michalowicz
Senior Manager – Legal Operations Business Performance

14. $170 BILLION 6%* Our Connected World
TE Connectivity is the World Leader in Connectivity & Sensor Solutions
Aerospace & Defense
Commercial
Transportation
Data &
Devices
Appliances
Automotive
Industrial Equipment
Subsea
Communications
Energy
Medical
Oil & Gas
$170 BILLION
6%*
CONNECTIVITY AND SENSOR MARKET
GROWING ANNUALLY
*6% estimated annual market growth rate over the next 5 years

15. TE Operating Advantage (TEOA)
TEOA is a Lean Business System that provides a framework that every business unit and function within TE can follow to transform any process to lean, and continuously improve and sustain the gains.
TE’s customers expect innovation, quality, delivery, and customer service, all of which are the key focus of TEOA.  TEOA is the philosophy, set of values, and series of management processes that collectively define who we are and how we do things – the purpose of TEOA is to drive the extraordinary customer experience (ECE).
Commercial
Transportation
Data &
Devices
Appliances
Automotive
Energy
Medical
Oil & Gas
$170 BILLION
6%*
CONNECTIVITY AND SENSOR MARKET
GROWING ANNUALLY
*6% estimated annual market growth rate over the next 5 years

16. A little about Jim M.
+ WITS

17. The Voice of the Customer
TEOA – Our Journey
The Tools
Lean = Speed
Six Sigma = Standardization
LPM = Structure
Shooting for the Stars
SL 1 Prepare
SL 2 Baseline
SL 3 Improve on Baseline
SL 4 Closing the Gap
SL 5 World Class Performance
A Program >>>> Operating System
Dashboard Metrics
Cycle Time
Productivity
Quality
Customer Satisfaction
The Voice of the Customer
Drive Business Growth
Protect Revenue & Margins
Department of “Go” vs “No”

18. TEOA Everywhere not Anywhere
The Force Awakens
Our Battle Plan
Steering Committee
War Working Council
Attack Sites – Practice Areas
Kaizen Facilitators
Repetitive & Recurring Processes
Quick Wins
Value to the Business
Jedis in Action
Cindy and NDAs
Luanne and Legal Holds
Brian and BPM
Jen - Product Management
The Unknown Jedi
My Role
Mentor
Therapist
Connector
TEOA Everywhere not Anywhere

19. $170 BILLION 6%* Kaizen Activity Commercial Transportation Data &
Devices
Appliances
Automotive
Energy
Medical
Oil & Gas
$170 BILLION
6%*
CONNECTIVITY AND SENSOR MARKET
GROWING ANNUALLY
*6% estimated annual market growth rate over the next 5 years

20. Mutual NDA Fast Track Deployment
Timeline:
February Kaizen Event
Reduce number of steps in TE NDA Mutual NDA process by streamlining and removing inefficiencies
Reduce amount of time Paralegals/Contract Analyst spend on TE Mutual NDAs
Create a standard process that can be adopted across TE
Create a standard TE Mutual NDA that can be adopted across TE
Commercial
Transportation
Data &
Devices
Appliances
Automotive
Energy
Medical
Oil & Gas
$170 BILLION
6%*
CONNECTIVITY AND SENSOR MARKET
GROWING ANNUALLY
*6% estimated annual market growth rate over the next 5 years

21. Mutual NDA Fast Track Deployment
163 Fast Track NDAs completed at 6 month mark
98% executed with no changes requested by other company
Cycle Time Improvement
TE Mutual Fast Track NDAs:
3 days Pre–Fast Track from drafting to sending out NDA
1 hr. 23 mins. Post-Fast Track from reviewing NDA to sending out executed NDA
External NDAs#:
12 – 15 Business Days Pre–Fast Track from receipt by Paralegal to sending redlines of requested changes to Business Unit
2 ½ Business Days Post-Fast Track from receipt by Paralegal to sending redlines of requested changes to Business Unit (23% go out same day)
Commercial
Transportation
Data &
Devices
Appliances
Automotive
Energy
Medical
Oil & Gas
$170 BILLION
6%*
CONNECTIVITY AND SENSOR MARKET
GROWING ANNUALLY
*6% estimated annual market growth rate over the next 5 years

22. Process Selection Checklist
Connect with VOC/VOB
Connect with LD Mission
Repetitive
Recurring
Measurable - KPIs
Deployable
Controllable
Quick Wins
Quality
Cycle Time
Productivity
Customer Satisfaction
Process Selection Checklist
TEOA Everywhere but not Anywhere

23. Betsy Greaney Legal Counsel Administrator
The UTC Journey
Betsy Greaney Legal Counsel Administrator

24. ACHIEVING COMPETITIVE EXCELLENCE – ACE
UTC is fully committed to our Achieving Competitive Excellence operating system. ACE is the source of our strong performance because it is fact based, data driven and customer focused.

25. For us, in legal, it starts with our dept roadmap –next slides
UTC’S JOURNEY
GOLD
Nov 2015
Steady State
GOLD
Nov 2013
GOLD
Nov 2010
GOLD
Sept 2007
Decreased number of value streams/reorg QCPC Manager
Reorganized value stream team members
Revamped 5S including assessments
Expand RRCA tool use
Add Alternative Fee metric
Revamp Skills assessment
Best in class performance
Key process metrics gold
Face to face customer interviews
Supplier survey 2009
Direct tie-in between roadmap and objectives
Skills analysis for future needs
Initial training for ACE practitioner
Key processes robust
SILVER
Dec 2004
BRONZE
Oct 2002
Best in class performance
Value stream documents developed for tracking ACE activities
Central location for QCPC Collection through QCPC Manager
Events held
ACE Associate training begun
Value streams identified and mapping begun
Organized teams by ACE lane
100% participation in ACE
QUALIFYING
Jan 2001
Processes mapped
Individual QCPC tools used
Standard work gaps identified
New business metric introduced
This is our lean journey…its an adventure that began in 2001 and continues today. UTC is at a steady state today, but opportunities come along to continually strive for improvement and efficiencies, both internally within the legal dept and with our business clients and firms and vendors.
For us, in legal, it starts with our dept roadmap –next slides
Customers & identified
ACE training completed
Annual MFA survey launched
ACE Pilot identified

26. ACE Journey

27. Highest Business Ethics Always Perfect Quality Wins Customer Loyalty
Engaged Work Force
Highest Business Ethics Always
CUSTOMERS
EMPLOYEES
QUALITY
Perfect Quality Wins Customer Loyalty
Customer feedback > 6.0
Employee survey > 80% overall favorability
Delight
Customers
FINANCIAL
Product, Process and Service Excellence:
Customer Value and Satisfaction:
Delighted customers as reflected by
Customer Scorecard > 6.0
Leadership Culture & Environment:
Employee survey engagement > 80%
PFT “smart objectives” established 1/ and accepted by 2/28
100% completion of ethics and compliance training requirements
100% engagement in ACE
EH&S gold standard
Quarterly All Hands’ meetings
ACE Associate status – 100% to target
Business Results:
Compliance with approved 2015 budget
Outside counsel billings under alternative fee arrangements > 75%
Deliver business results
ACE Gold value streams drive perfect products & services
Corporate Legal Department Roadmap 2015
Support successful launch & progress toward Ethics & Compliance Goals
100% on-time delivery of corporate secretarial products and services
Complete centralization of asbestos claims management and finalize insurance coverage agreements
Acquisition & Divestiture legal support that enables timely and favorable transaction closings
Effective and efficient oversight and support of litigation portfolio, environmental sites, purchasing/sales transactions, employee compensation and benefit programs and other client driven legal needs to ensure alignment with clients’ desired results and external legal requirements
Define and implement key metrics, processes and tools to drive world class, strategic IP management at UTC
Effective oversight of significant compliance matters/investigations
Further enhancement and effective support of anti- corruption, antitrust, US Government contracts and privacy compliance programs
Enterprise ITC leadership to assure:
100% ITC staffing to requirements
Sustaining Corporate Policy Manual Self-Assessment and ITAR agreements management at all aerospace sites
Full enterprise deployment of integrated ITC professional training & certification program
Continued full compliance with Consent Agreement
Definition and Initial implementation of enterprise Import/Customs compliance and anti-boycott programs
100% sanctions screening implemented to UTC requirements
Our ACE efforts are important and are part of the overall UTC business strategy. We do both one year and 5 year roadmaps and this shows it begins with the leadership at the top, and flows down to all of us
See next slide for 5 year roadmap

28. Corporate Legal Department Roadmap 5 Year
Engaged Work Force
Highest Business Ethics Always
CUSTOMERS
EMPLOYEES
QUALITY
Perfect Quality Wins Customer Loyalty
Delight
Customers
FINANCIAL
PP & S (continued)
Sustained acquisition and divestiture legal support enabling timely and favorable transaction closings
Expansion of significant litigation program worldwide
Centralization of significant environmental claims and site remediation management at UTC Corporate
Best-in-class enterprise ITC, with uncompromising culture of compliance; business-responsive solutions ensuring compliant global collaboration and providing competitive advantage; right-sized and sustainable ITC function based on industry-leading talent, automation and data-driven continuous improvement; and ITC requirements completely integrated into standard business processes.
Attainment of 2020 Ethics & Compliance goals
Best-in-class anti-corruption, antitrust, US Government contracts and privacy compliance programs and oversight of significant compliance matters/investigations
Achieve key metrics demonstrating a robust state of world class, strategic IP management at UTC
Customer Value and Satisfaction:
Delighted customers as reflected by Customer Scorecard ≥ 6.0 for 5 years
Leadership Culture and Environment:
Employee Survey Engagement > 85%
100% ACE Associates on sustained basis
100% Completion of mandatory ethics and compliance training
Enhanced community engagement by UTC attorneys
Business Results:
5 years of compliance with approved budgets
Outside counsel billings under alternative fee > 80%
Product, Process and Service Excellence:
Sustained ACE Gold quality and delivery of portal-based corporate secretarial products and services
ACE Gold Value Streams Drive Perfect Products and Services
Corporate Legal Department Roadmap 5 Year
Customer feedback > 6.0
Employee survey > 80% overall favorability
ACE Gold value streams drive perfect products & services
Deliver business results
The next slide will show you the full circle journey of bringing our systems and processes together --

29. UTC ACE STRATEGY & POLICY DEPLOYMENT
Value streams meet with customers and determine process improvement initiatives for upcoming year.
The roadmap is supported by annual performance objectives.
Management reviews roadmap and communicates objectives to department
Senior Management Validation
You need to establish a strategy to tie in all aspects of systems appropriate for integrating ACE into the daily work life –show the connection between the employee’s individual performance to the roadmap of the business’ performance expectations
Value Stream SMART PFT goals are created to support roadmap objectives.
Quality and delivery metrics collected on processes from each Value Stream and rolled up into Control Tower

30. UTC - MAINTAINING ACE GOLD
Log turnbacks and escapes Complete course and event requirements Prepare 2016 Value Stream objectives Update Robustness Charts & SIPOCs Ensure MFA reviewed and appropriate action taken Analyze QCPC and perform RRCA Record Benchmarking activities Prepare 2016 Individual objectives
The journey should not be looked at as a start and end date…like my diets over the years. There needs to be a culture shift ( like a lifestyle change) to sustain continuous improvement --- every year you reassess where you are and where you can move forward to

31. QCPC EXAMPLE: OMBUDSMAN RESPONSES
Define Problem
Investigate Problem
Aging Ombudsman matters undermine the programs effectiveness with users
Improvement Mandate:
Verifying Solution
Ensuring Solutions
This example is of our improvements to the Ombudsman program process
Root Cause: Persons involved in process unaware of the target deadlines, requirements and responsibilities relative to investigations and responses. Additionally, there were no clear accountability standards.
Description of Problem: Investigatory cases were not being initiated once cases were assigned, resulting in delayed findings and responses to program users.
Before Implementation: On average during 2012 , forty seven percent of cases assigned to Business Practices were beyond the 90 day target at closure.
After Implementation & Ongoing: Initially cases spiked slightly (1Q -13) as more of the older cases were being closed following the preliminary steps. Cased closed at a significantly better rate during 2Q (YTD ), with only 26% beyond the 90 day closure target. Ongoing monitoring, reviews and analysis are underway to determine the impact and extent of the solutions.
Increase in 2013 due to closure of backlogged aged matters
2Q 2013 data reflects a improvement which will be monitored

32. Antitrust Example RRCA/ DIVE Define Problem Investigate Problem
Legal was not getting information needed to draft filing on timely basis
Verify Solution
Ensure Solution
Activity
Timeline
Subject line of s to include information easily recognizable as antitrust immediate need situation by including matter name, jurisdiction, subject of request and response deadline
Completed
Progress and action items related to filings discussed at weekly working team meetings
Circulated to internal Antitrust team regarding new subject line format
Monitor turnbacks
Ongoing
Process Name: Antitrust Filings
Root Cause: s requesting information did not include priority status or deadline date.
Description of Problem: Once a determination is made that an antitrust filing is necessary Legal begins collecting information needed for that filing. Information needs to be gathered in 1 to 3 days from various business unit contacts all whom are working on priorities for their business unit. The request from antitrust was often missed or “mis”-prioritized by the business unit contact so the information necessary to complete the filing was not timely and required follow up.
Before Implementation: Information requested was not received from business unit contacts unless follow up telephone calls were made, including explanations of the importance of the filing and the deadlines involved.
After Implementation: Status of antitrust information collection now discussed at weekly working team calls with business unit team members explaining priority of request to BU contact when necessary. Response date included in subject line of requesting information.
Improvements implemented in April 2013

33. Worldwide Law Firm Management
SUPPLIER MGT PROGRAM
Preferred Firms Performance
9 Step Procurement
Policy / Process Education
Worldwide Law Firm Management
Feedback to firms
Supplier Database
Example of our counsel management program; law firm consolidation
Customer MFA
Compliance Monitoring
Exception Requests

34. MFA- Bi-Annual Survey Counsel/Supplier Mgt Program
Design
Benchmarking in General Counsel Roundtable
Redesigned “Strawman” vetted by team
Goal - “Actionable Feedback”
Distribution
Target firms based on Lawtrac spend and volume of matters
Internal survey participants based on Lawtrac data
with link to survey, one follow up
Analysis
Compilation of responses
Distribution to senior management
Review for firms with overall rankings falling below Gold 6.0
Feedback
to firm relationship manager with pdf of survey; copy to UTC survey participants
Presentation of results at Preferred Counsel Meeting
Distribution of presentation to Preferred Counsel for dissemination within their organizations
An example of continuous improvement.
2011 Re-design with goal of reducing overhead/manual labor required to provide firms with direct feedback.
2013 2nd time using the new design.
55 surveys issued … each targeting a single firm
252 responses
29-30 questions (firms using LawTrac & FIP included extra question – systems which some firms access directly)
Plus 2 commentary questions
Questions grouped in categories
Cost Competitiveness – 3 Quality – Delivery / Responsiveness – 5
Ease of Doing Business - 4/5 Customer Support – Alternative Fees 5
Overall ratings (Quality, Delivery, Performance) - 3

35. Providing actionable feedback
Supplier Mgt - Survey of firms
Providing actionable feedback
Example – questions provide our definition of the aspects of delivery of quality services, with ratings that define frequency of occurrence.
Two required questions … what they do well and opportunities for improvement. The PDF provided to the firm identifies the author of each comment.
Note no “grey out” on the PDF to the firms.
The with their results also provides them with their previous year’s alternative fee %, which we use when evaluating rate increase requests.

36. Top things we wish we had known when we began our journey
ACE – ACHIEVING COMPETITIVE EXCELLENCE
Top things we wish we had known when we began our journey
Group training sessions more effective in engaging employees
Employees were afraid …need to communicate ACE as a journey, not a destination, and take the time necessary to be sure everyone has a full understanding of ACE
Scheduling recurring meetings with mini deadlines keeps everyone focused on incorporating the ACE processes into their daily work
The mantra that we are in this together
We had people hiding from assessors
People didn’t take ACE seriously at first
Brainstorm together – diversity of thought always helpful

37. Advice for getting started
ACE – ACHIEVING COMPETITIVE EXCELLENCE
Advice for getting started
What gets measured, gets done
Create the right climate for change in your organization
Build the right team; get buy-in from all stakeholders
Think of turn-backs as treasures
Celebrate small wins to keep momentum moving forward
Strive for continuous improvement, always
Keep the ball rolling….over time you will reap the benefits of good process and it will naturally move you toward continuous improvement
Journey has been long and hard but oh so worth it!
ACE never stops, the key is to integrate the ACE philosophy into the day to day workings of the legal dept

38. How do we build a strong & lasting LEAN Program?
How do we adopt LEAN processes for big issues not simply “low hanging fruit” and make it stick?
How does an Operations Team support LEAN processes without owning all LEAN processes?
How do we measure success of a LEAN program, both per process and as a whole?
How do we move from a solutions discussion to a root cause discussion?
Will LEAN ever be embraced by attorneys? Litigators?

39. QUESTIONS
Betsy Greaney United Technologies Corporation James Michalowicz TE Connectivity Trevor Torrance Sears Holdings Corporation