Global competitors tend to be larger than domestic-only companies and thus legally more fit

“Over the past two decades Spanish companies in sectors where products and services can be traded internationally raised their productivity five times more than their counterparts in purely domestic sectors.”  That finding in Fortune, July 23, 2012 at 16, suggests another reason why larger companies enjoy falling levels of total legal spend normalized for revenue.

 

The rigors of matching yourself against international business competitors keep you fitter, as evidenced by legal expenses per unit of revenue, than less-international companies that don’t face that test. If you are big enough to sell overseas, your revenue rises but your total legal costs do not rise as much.  There are many reasons for this correlation (See my post of Dec. 11, 2010: five reasons why globally dispersed US law departments might have lower total legal spending; April 30, 2011: globaloney; and May 6, 2011: tradable and non-tradable sectors with the difference that makes on law departments.).

 

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