For years I have blithely divided legal spend by company revenue and thought that did the right normalization. Then I read an academic’s research paper that divided a metric by “the average of normalized sales and assets.” Good grief!
A normalized number has been transformed into distances from the mid-point of a presumed bell curve (See my post of Sept. 30, 2010: normalized figures with 14 references.). That much I understand and use.
What threw me a curve was the combination of sales and assets. Perhaps that aggregate denominator makes more sense as a broader measure of company size. What do assets drive in terms of legal demands or complexity? Since I do not know, I will have to explore this new benchmark foundation with the 800+ law departments in the General Counsel Metrics survey.