1) Do the reading for the class. Read once & highlight, go back and put together outline-style notes, hopefully you can find a running theme. (This may very well devolve into skimming the reading and doing either highlighting or note-taking, haha).
2) In class, take notes in the same document, either modifying an existing portion of the notes or just tacking it on to the end until you've figured out how to incorporate it.
I'm a 1L, so I guess take it with a grain of salt, but it seems unnecessary to put notes in outline form prior to class. Based on my conversations with students, it seems optimal to prepare just enough for class that you seem to know what you are talking about and won't be humiliated if called upon in Socratic dialogue. [It is perhaps that most students over-prepare for class, in fear of being called upon, but class participation except on a stellar or dismal level rarely has an effect on grades]. Many points in the reading are confusing and won't be clear to you until the professor elaborates upon them, so from a time-management perspective, it may be better to emphasize post-class work rather than pre-class work; for example, it seems 3 hours of post-class work (in which you are able to utilize the perspective of both your text and your professor - who writes the exams) and 1 hour of pre-class reading is preferable to 2 hours of pre-class work (where you may misunderstand concepts) coupled with 2 hours of post-class work.
Again, I've only had three classes so far, but the logic of this approach seems clear to me even just from those three classes. I wasn't cold called, but I feel I could have competently handled the prof's questions asked of other students with about half the prep I put into the assignment. Also, although I didn't take any substantive notes beforehand, primarily focusing on highlighting and margin notes, if I did take substantive notes I know they would have required major revisions.
Any other more experienced TLSers, please call bullshit on me if so inclined, since I'm still learning myself.