Metrics are just numbers; benchmarks are metrics that compare you and inform you

Northeast Utilities is a utility holding company whose units serve about 1.9 million customers, generate revenues of about $5.8 billion, and employ about 6,200 workers. General Counsel Gregory Butler heads a team of 40 lawyers and 18 staff. In the article from the Nat. L.J., Oct. 22, 2009 where this background is given, he estimates that “Nearly 60% of the utility’s legal work is handled in-house with the rest performed by outside counsel.” That article is studded with benchmarks and points about benchmarks.

The ratio of lawyers to staff is much higher than the norm of one to one. Northeast Utilities has a bit more than two lawyers for each non-lawyer staff person. (See my post of April 18, 2009: lawyers as percentage of total legal staff; March 28, 2006: EMC has high ratio of lawyers; May 10, 2006: the US Department of State and its 160 lawyers and 140 support staff; Jan. 25, 2007: GM with its 107 attorneys and 109 support staff; Dec. 23, 2005: the ratio of one-to-one in prosecuting attorney’s offices; Nov. 28, 2007: Cummins, Cisco and the declining numbers of support staff; June 17, 2008: Starbucks and one-to-two ratio; June 18, 2009: Aetna figures; and Aug. 10, 2009: Abbott is very close to one to one.).

The ratio of one lawyer for every 155 employees may be meaningful to some general counsel, but I doubt its usefulness (See my post of April 18, 2009: lawyers per 1,000 employees with 6 references.).

For utilities, the metric may be meaningful of lawyers per million customers (Northeast Utilities has one lawyer for every 47,500 customers). Different industries sometimes have different benchmark metrics for their legal teams. For example, petroleum companies might find something insightful in lawyers per billion barrels of reserves; trucking companies might lean toward lawyers per ton miles shipped.

Another metric on display is lawyers per billion dollars of revenue: 6.9 (See my post of Feb. 25, 2009: lawyers per billion with 22 references and one metapost.).

Finally, if the 60 percent figure means that the department’s ratio of inside spend to external spend, that is toward the high side of the typical 40/60 split (See my post of March 29, 2009: 40/60 ratio of inside-to-outside spend with 18 references.).

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