A method that would shed light on the relative cost of lawyers across different countries

Inspired by an article in the Economist, June 9, 2012 at 83, on using McDonalds Big Macs to compare international productivity trends and improve on purchase power parity (PPP), I imagined a counterpart for legal services rendered to corporations.

Ten general counsel in each of ten developed nations agree to contribute data. They estimate the fees and disbursements paid a representative, good quality law firm in their country through completion of a (a) single-plaintiff employment discrimination case, (b) lease of a standard office suite in the capital, (c) routine securities filing for a publicly traded company, and (d) a cash purchase agreement of a small company. The goal would be to collect estimates of ordinary, common-as-Big Mac legal services. Combined, that data would permit an index of corporate legal services for each country.

The other piece of data would be the salary plus bonus of a typical law firm lawyer who has been practicing five years. That data would be the equivalent of what McDonalds pays its employees.

Dividing the associate compensation by the local index of legal services would create what we might call the associate hours per service per country. To quote from the article, “This statistic represents an alternative, PPP-like calculation of the real wage, taking account of the local cost of goods.” It would be better than an exchange-rate calculation and would allow benchmark analyses of law departments to convey differences between countries more usefully.

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