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Title: Senior Vice President, General Counsel and Secretary Location: Austin Age: 47 Struggle With Spend After guiding Freescale Semiconductor Inc. through a massive initial public offering and spin-off from Motorola in 2004, and taking over the job of general counsel this April, John D. Torres took a long, hard look at his outside legal costs. “I was struggling to solve two problems: to get an appropriate discount and to have better predictability,” he says. With eight years at Motorola before the Freescale spin-off, Torres knew what legal work he was sending out routinely and to which firms. He approached those firms with a proposal to buy blocks of legal time for a blended, discounted rate, which Freescale would pay in 12 equal installments. If Freescale doesn’t use the whole block, the hours roll over to the next billing cycle. “I’m able to tell my finance committee, with 100 percent certainty, what my legal spend is going to be in that area. It’s also attractive to my law firms. They know how much is going to be paid,” he says. Torres says the arrangement fits well for the sustainable, predictable work, about 10 percent to 20 percent of Freescale’s total outside legal costs, and he’s already saving 20 percent on fees compared to 2004 costs. He’s also established a list of approved firms and negotiated fee discounts as he feels appropriate. The removal of the profitability factor was actually an initial draw to in-house work for Torres, after 13 years in private practice. “The end game of an in-house legal department is not to generate money. You are that much more focused on the legal services,” he says. His clients give him credit for a strong legal background, coupled with business sense. “He can also articulate and bring some Business 101 to the team,” says CFO Alan Campbell. Torres also focuses on his lawyers and their career growth. “I am a big believer in giving attorneys stretch goals, stretch opportunities. If someone can demonstrate that they’ve got the time and talent and interest to learn more and get better, to help them with that,” he says. He doesn’t want his lawyers to stagnate and miss out on career opportunities. He does want them to be as knowledgeable as possible, to increase client service. At Freescale, intellectual property permeates almost every aspect of the business, he says. The $6 billion company spends $1 billion annually on research and development, and it boasts a portfolio of more than 4,900 patent families. Not all the lawyers are IP specialists, though, and patent lawyers are not typically skilled at deal-making, Torres has found. In 2000, before the spin-off, he initiated a yearlong cross-training program between the IP lawyers and everybody else. The training broadened everyone’s skills, increased efficiency and helped bring the department together. Notes Torres, “You have a more cohesive law department, which will cut down on attrition.”

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