The effect of contract lawyers on benchmark metrics

Among the ten lawyers at Palm Inc., one is “on a contract basis because she is working in Germany.” This fact gets no elaboration in the interview of Mary Doyle, general counsel of Palm, published in Law.com In-House Counsel, but the contract basis may have to do with the difficult employment laws of Germany. Or, possibly, the lawyer is working on a trial basis.

Aside from those speculations, note that how a law department classifies contract lawyers can make a major difference in its benchmark numbers. Many of them state results per lawyer (See my post of May 14, 2006 on how problematic this denominator can be.). If a contract lawyer functions interchangeably the same as a full-time employee-at-will lawyer, they should be counted the same. If not, the fully-loaded cost per lawyer will swell, but not for any logical reason. Lawyers per billion of revenue will look better than it should while inside and outside costs per lawyer will look worse.

Truly temporary lawyers, hired from an agency for an expected limited time on a certain project, should be treated differently than a lawyer who is on a contract for reasons having to do with local laws (See my post of Aug. 2, 2006 on Sears and its use of temporary lawyers.).

This blog has more on contract legal staff (See my posts of June 14, 2005 about retaining former employees as contract lawyers; Aug. 5, 2005 on differences between contract lawyers and temporary lawyers and April 9, 2006 on contract staff versus temporary staff; Jan. 30, 2006 on Purdue Pharma’s use of contract lawyers; Aug. 2, 2006 on 20 contract lawyers with the State of Massachusetts; and Oct. 8, 2005 and two contract lawyers at Dial Corporation.).

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