The consistency of several benchmark ratios over almost two decades

Some fundamental benchmark ratios have stayed fairly stable for many years. Richard H. Weise, Representing the Corporate Client: Designs for Quality (Prentice Hall 1991), Chapter 3, describes a benchmark survey conducted in 1989 that gathered data from about 80 US companies. Roughly one-fifth of them had revenues greater than $9 billion and the same percentage had revenues of $100 million to $1 billion.

Twenty years ago, that survey by Motorola found the overall average ratio of paralegals to attorneys to be 0.20, one paralegal for every five attorneys (at 3-Ex-24). Two decades later, the median ratio from the 358 US law departments in the General Counsel Metrics survey was 0.29. Way back then, 75 percent of the lawyers in the participating companies reported solid line to the general counsel. Sixteen percent had a dotted authority line, two percent were dual reporting, and seven percent had no relationship to the general counsel. A similar distribution probably holds today. Consider lawyers per thousand employees (See my post of April 18, 2009: lawyers per 1,000 employees with 6 references.). Currently the ratio in the US is between 1.5 and 2.5; twenty years ago, the ratio was 1.365 in-house lawyers per thousand employees.

One other comparison. Weise’s survey found that inside spending accounted for 38 percent of the total legal budget and external spending for 62 percent. Nothing has changed! We still see the 40/60 split all the time (See my post of March 29, 2009: 40/60 ratio of inside-to-outside spend with 18 references.).

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