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A partnering arrangement’s possible effect on lawyers per billion

Cummins, a $9.9 billion manufacturer of engines, has 21 in-house lawyers as well as 9 paralegals and administrative personnel located in five countries. As well, the internal legal group collaborates very closely with Foley & Lardner. According to Counsel to Counsel, Jan. 2007 at 4-6, Foley & Lardner handles Cummins’ warranty litigation as well as its intellectual property issues. The firm has done so for many years and is closely connected.

At two lawyers per billion dollars of revenue, Cummins is certainly at the low end on that metric (See my post of Jan. 18, 2007 on lawyers per billion of revenue across industries.). To what degree is the partnering relationship the reason why the inside lawyers are so low? One hypothesis is that a very close relationship with a firm, one receiving major payments for much work in an area of law over a period of years, stunts the growth of the law department in that area.

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