EMC’s law department: rapid growth, metrics, and GC’s responsibilities

Let’s tease some thoughts out of unprepossessing facts from an article by Paul Dacier, the general counsel of EMC Corporation, that appears in Met. Corp. Counsel, Vol. 17, April 2009, at 7. He scatters some figures throughout his piece and I have supplemented them as a platform for these observations.

Start and growth of department. EMC was founded in1978, went public in 1986, and surpassed $1 billion in sales in 1994. Dacier joined in 1990, perhaps when revenue was half that billion dollar figure and “there was no legal department at EMC.” That sentence could mean that some lawyers practiced law at EMC, but they were not part of a formal legal department. Or it could mean that what is now a 70-lawyer department grew by 16 percent a year. In any event, the urge for an inside lawyer strikes CEOs at the couple hundred millions of revenue mark and legal teams match the rate of growth of the company thereafter.

Lawyer/employee ratio. With “more than 40,000 employees,” EMC has about two lawyers for every 1,000 employees (See my post of Jan. 27, 2006: in 2005, median of U.S. lawyers per 1,000 US employees is 1.5; Dec. 22, 2005: refers to 2.55 lawyers per 1,000 US employees; Feb. 19, 2007: in New Zealand, median lawyers per 1,000 employees was 6.86; and Dec. 7, 2008 #3: Cargill has 8.5 lawyers per 1,000 employees.). This metric offers little insight (See my post of June 7, 2006: the metric lacks usefulness.) except possibly to compare internal staff groups (See my post of April 6, 2008: benchmark internal staff groups based on staff or spend per 1,000 employees.).

Lawyers and total legal staff. Whereas the most common ratio of support staff person per lawyer is close to one, the EMC law department has only 45 support staff for its 70 lawyers, a ratio of slightly less than 0.7 support staff per lawyer. The ratio at EMC has shifted rapidly toward more lawyers (See my post of March 26, 2006: EMC had ratio of one-to-one; and Nov. 28, 2007: trend toward more lawyers per staff.).

Lawyers per billion dollars of revenue. Having reached revenue of $14.9 billion in 2008, EMC has slightly less than five lawyers for every billion in revenue. That ratio is middle of the road, low for a technology company, and makes the lower ratio for support staff stand out even more (See my post of Feb. 25, 2009: lawyers per billion with 22 references and one metapost.).

Responsibilities of general counsel. Dacier not only manages the legal group of 115, he also leads “EMC’s real estate, facilities, internal audit, sustainability, and aviation organizations.” That is quite a scope of responsibility for a general counsel (See my post of Jan. 29, 2009: role, scope and functions of legal departments with 8 metaposts and 19 references.).