Metrics on Chinese law Departments and their spending; legal risks quantified

A study by the UK-based firm, Lovells, disclosed that, on average, China’s top 100 companies spend 0.02 percent of their total revenues on legal costs, compared to 1.0 percent for the Fortune 100, and 0.7 percent for big European companies. [That figure for the Fortune 100 is probably three times higher than reality, at least as found by many benchmark surveys. Typical spend is .3% to .4%.]

The firm found that the risks faced by Chinese companies were under half those that faced by Americans, yet the spending was one-fiftieth. I would be fascinated to learn how Lovells calculated legal risks faced by companies, let alone generalized those risks to such large and diverse companies. Financial Times, July 28, 2005 as reported in Hildebrand Headlines (July 29, 2005).

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