At the recent Consero 2010 Corporate Counsel Forum, the slides of one panel included material on how to select a preferred provider network. Included in the mock analysis of several incumbent law firms that hoped to be chosen were the number of full-time equivalent attorneys that had charged time to the company’s matters and the total number of attorney’s that had charged time. The slide then showed the result of dividing FTE attorneys by charging attorneys, called the “attorney efficiency ratio.”
Hence, a firm where two FTE attorneys charged time (presumably based on some average number of hours charged in a year, such as 1,900) but a total of 24 attorneys billed to the client’s matters, the attorney efficiency ratio was given as 0.09 (9%).
The ratio has merit to the extent that it focuses on whether a firm uses a core group of attorneys to perform most of the work. But the ratio suffers to the extent that a firm draws on specialists to contribute their part to analysis and solutions of legal problems.