After-Action Reviews to improve the effectiveness of legal services

1. After-Action Reviewsto improve the effectiveness of legal services December 4, 2013 |1:00 - 2:00pm ET Aileen R. Leventon | David Zampa| Derek Vander Heide

2. Agenda • Introductions • Logistics • Background on After-Action Reviews • Case Study • Lessons Learned from conducting an AAR • Summary • Q&A

3. Introductions Aileen R. Leventon Consultant and senior lawyer David Zampa Law firm partner Derek Vander Heide Client and In-house counsel

4. After the matter is done we forget about the three-ring circus

5. …particularly if the matter or phase has been well-managed ACCOUNTABILITY and TRANSPARENCY P L A N After-Action Review Revise/Refine Intake/Engagement Launch Monitor Close

6. The After-Action Review is a critical phase of effective project management LINDA to fix shading ACCOUNTABILITY and TRANSPARENCY P L A N After-Action Review Revise/Refine Intake/Engagement Launch Close Monitor

7. To conduct an after-action review we need a baseline • At any point in an undertaking, key participants are able to consistently and unambiguously answer critical questions: • Why? • What? • When? • How? • Who? • The after-action review helps us identify if there were gaps and enables us to address their consequences

8. Who does after-action reviews? Why? • Plane crashes • US Military • Medicine • Manufacturing • Research & Development Organizations • Accounting • Management Consulting • Top tier law firms and legal departments

9. What: Agenda for an After-Action Review • What did we set out to do in the matter/ phase/ activity? • Compare actual outcomes to articulated objectives, schedule and cost, and initial assumptions • Did we do it? • What worked? • What didn’t? • Why? • What would we do differently next time? Why? • What assumptions would we change? • What events impacted our anticipated schedule and cost? • How well did we monitor and reforecast in those situations where budgets were developed? • What did we learn that we would want to re-use? • What actions will we take as a result of what we have learned? – Who? What? When?

10. Principles of After-Action Reviews • Our self-esteem is threatened by the acknowledgement of failure. We fear the environment of “shoot the messenger.” • We must overcome this fear to improve our effectiveness as lawyers and how we manage the risks inherent in law practice. • We cannot improve if we do not analyze and understand what we do. Learning requires thoughtful consideration and discussion. • Most people prefer to put past mistakes behind them rather than revisit and unpack them for greater understanding. • Participants in AARs must be mindful of cognitive biases. • Conducting an an AAR requires a spirit of inquiry and openness, patience and a tolerance for ambiguity and encouragement of change. • An AAR capitalizes on traits for which lawyers are recognized: decisiveness, deep reflection and painstaking analysis. Sources: Cannon & Edmondson, “Failing to Learn, Learning to Fail” (2005) Kahneman “Thinking, Fast and Slow” (2011)

11. When and who • At the end of a matter • At the end of a phase • When something has gone well • After a “near miss” • Any time • What ever it takes to make it routine • All team members • Client • Skilled Facilitator • Functional roles • Knowledge management • Project management • Finance

12. What: Preparing for an After-Action Review • Should we debrief formally or informally? • What do we want to achieve by conducting this review? • Who are the key participants? How do we engage them? • What role does the client play? • Who will facilitate/lead? • How will we capture the meeting? • Who will be responsible for implementing outcome? How? • What incentives are we providing to assure participation? Planning for the After Action Reviewis as important as doing it

13. Frame the AAR in terms of risk and improvement Source: Mark D. Cannon and Amy C. Edmonson, 38 Long Range Planning Journal (2005) www. lrpj.com

14. Spectrum of After-Action Reviews Formalsit-down Formal Unfiltered notesexchanged Writtenanonymoussurvey Level of formality “Lunch” Quickconversation Informal Depth of relationship Deep/ Long-standing New / Distant

15. More formal After-Action Reviews require a compact • NEEDS A GRAPHIC

16. History of After-Action Reviews over the life of a relationship: GE Healthcare and Sidley Austin • Open communication fostered by stable relationship • Close to two decades • Consistent lead Sidley partners • Evolution of GE point-of-contact from GC to M&A Legal • M&A Panel • Annual reviews • Periodic transaction retrospectives • GE Culture of Continuous Improvement • Evolved from industrial operations to legal • Current practice institutionalizes after-action reviews as part of improved legal services to client (from in-house and outside counsel)

17. Case Study: Project Slingshot After-Action Review • Project Slingshot Background • Private acquisition • Less than $50 million • Strategically important to new P&L • GE Healthcare – Sidley Arrangement • Alternative Fee Arrangement with risk/reward sharing • Scope of Sidley representation agreed initially and modified as needed • Principal Parties • GE Healthcare Business Development (legal and non-legal) • GE Healthcare acquiring business • Specialists

18. Case Study: Project Slingshot After-Action ReviewClient Preparation • What constituencies to involve? • M&A Team (including all Due Diligence Functions; Business Development; Legal; Finance) • Transition team • Business team acquiring target • What constituencies not to involve • Consider when and how to involve/ report to senior management • What information gathered and how • Specific questions/topics solicited by email from BD team lead • Internal collaboration • Deal approval process • Deal structuring / negotiation • Developing financial projections • Overall DD process • Integration planning • HR • Not anonymous

19. Project Slingshot After-Action ReviewLaw Firm Preparation • What constituencies to involve? • Core M&A lawyers (partners and associates) • Lead specialist lawyers (tax; employee benefits; IT, etc.) • Accounting and finance • What information to analyze • Budget v Actual fees • Timekeepers and hours • Preliminary discussions with client • Vet preliminary thoughts and findings with key contact (M&A legal)

20. Case Study: Project SlingshotCompilation of Information and Discussion • Captured in slides • 99% verbatim • No prioritization • Anonymous – in that content not directly attributed to any one individual (attributed to the function) • Meeting to discuss and provide context • All parties participate in person or by teleconference • Similar to due diligence “report outs” --- each function given an opportunity to explain and give context, examples etc. • Celebratory dinner for further discussion, relationship building etc.

21. Reflections on Project Slingshot After-Action Review • Techniques to retain • Meeting/call to provide each function an opportunity to explain and provide context to written comments • Areas for improvement • Conduct (before or after) a separate, one-off legal after-action review to discuss budget, staffing, etc. • Surprises • Post-acquisition transition plan: Modeling ex-US expansion seemed at the time to be inefficient and a delay, while we found out that it helped accelerate expansion of the business

22. Benefits of After-Action Reviews • Client perspective • Drive efficiencies • Benefit of candid, outside firm perspective • Analyze long-term data over multiple matters to drive change • Law Firm Perspective • Improved understanding of client business • Long-term focus on client relationship • Introductions and exposure to broader client team

23. Summary :Types of After-Action Reviews Formalsit-down Formal Unfiltered notesexchanged Writtenanonymoussurvey Level of formality “Lunch” Quickconversation Informal Depth of relationship Deep/ Long-standing New / Distant

24. Thank you

25. Q&A

26. Speaker Bios Aileen Leventon, Founder and President, QLex Consulting Inc., Member of the New York Bar Aileen Leventon has conducted hundreds of After-Action Reviews of projects and legal matters, including mid-term reviews of distressed matters in order to get them back on track. She practiced law for over 15 years before shifting her focus to supporting other lawyers in improving the economics and effectiveness of legal service delivery.  Her experience includes practicing at an AmLaw 50 law firm and serving as an M&A lawyer and legal project manager at a Fortune 500 company, as well as leading a professional services organization at PricewaterhouseCoopers LLP.  For over ten years she has coached lawyers and practice groups on the integration of business practices in specific matters, particularly large or complex projects where budgets have gone awry. Aileen also helps law firms address accelerating pressure on prices and margins. She has a JD from Cornell University, where she was Managing Editor of the Law Review, and an MBA from Columbia University. She graduated Phi Beta Kappa from State University of New York at Stony Brook.  Aileen is a founding member of the ABA Task Force on Legal Project Management in M&A Transactions and led the Ark WebinarFall 2012 Series on Legal Project Management in Complex Matters. David Zampa, Partner, Sidley Austin LLP Dave Zampa, a partner in Sidley Austin LLP’s Chicago office, has more than 20 years of experience handling public and private M&A transactions, spin-offs, joint ventures and other strategic transactions. For over 10 years, he has focused on such transactions for clients in the healthcare technologies and life sciences industries, bringing together the full spectrum of Sidley’s diverse Global Life Sciences practice, including food, drug and medical device regulation; compliance and enforcement; healthcare; products liability; intellectual property; competition; and privacy. Dave most often works with large, strategic corporations with whom he has developed and applied legal project management tools to deliver more valuable services while addressing evolving needs in the areas of budgeting, matter management and process improvement. Derek W. Vander Heide, Senior Counsel, GE Healthcare Derek Vander Heide is the Senior Counsel – Mergers and Acquisitions for GE Healthcare's global business development team and provides legal leadership and support for all aspects of worldwide acquisitions, joint ventures and alliance agreements, equity investments and divestitures. Derek’s responsibilities also include applying General Electric’s institutional focus on process rigor and continuous improvement to legal project management and budgeting for all GE Healthcare’s M&A transactions. Prior to joining GE Healthcare, Derek was a partner at an Am Law 25 firm where he focused his practice on mergers, acquisitions and divestitures, private equity leveraged buyouts, venture capital investments and general corporate counseling. Derek has represented US- and European-based public and private companies, private equity funds and portfolio companies in transactions ranging in size from several million dollars to several billion dollars.He has a JD from Indiana University Maurer School of Law, an MBA from Indiana University Kelley School of Business and undergraduate degrees in Chemistry and Business Administration from Hope College, Holland, MI.

27. Close • If you have done AARs previously, did you acquire any new ideas? • If you have not done AARs previously,would you start doing something as a result of the information provided in this program?