Revenue supported per dollar of legal spend: data from the technology industry

A survey of law departments in the technology industry last year reported revenue supported by each dollar of legal spend. The report provided averages and medians for that figure by three categories of corporate revenue. For companies with less than $100 million of revenues, the average ratio was $33 and the median was $38; for $100-999 million the average was $74 and the median was $56; while for companies with more than a billion dollars of revenue, the average was one dollar of legal spend supporting $342 or revenue with a median of $111.

Turned around to the more familiar benchmark metric of total legal spend expressed as a percentage of revenue, the median figures from this technology group were 2.63 percent for the sub-$100 million companies, 1.78 percent for companies larger than that up to $1 billion; and 0.90 percent above $1 billion.

As these figures show, this industry ranks near or at the top in terms of its legal intensity, primarily because of the pivotal role and expense of intellectual property. As always, too, increasing revenue size correlates with decreasing legal expenditures as a portion of that revenue.

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