Industry is key to benchmarking, but poses methodological problems

My a priori assumption is that legal departments are evenly distributed within industries by number and lawyer staff when you adjust for the size of the industry. If true, then roughly speaking, an industry that is twice as big as another in total revenue will have twice as many law departments and the largest ones will be proportionately bigger (I am not sure about double). Quite likely, however, stable and mature industries exhibit a different distribution of law departments than fast-growing, rapidly changing industries.

Not that “industry” is a clear and precise designation for a large company (See my post of Dec. 19, 2007: “industry” oversimplifies complicated companies; Nov. 25, 2006: industry segment benchmarks; April 16, 2007: use industry comparators, the basis for compensation studies; June 25, 2007: benchmark outside your industry to innovate; April 23, 2006: golden apples to apples; Aug. 28, 2008: how to correct TLS/Rev across industries; Sept. 26, 2009: differences between benchmark comparisons on industry, revenue, and number of lawyers per billion, Jan. 12, 2009 #3: divide a company’s metrics by the industry average.).

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