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Bigger companies become legally more efficient, at least in terms of inside lawyers per unit of revenue

A recent survey of European law departments confirmed what many people have known and this blog has supported: as companies increase in size the ratio of numbers of lawyers per billion dollars of revenue decreases. Data in Law Dept. Quarterly, Sept./Nov. 2006 at 19, confirms that economies of scale and scope are hard at work (See my post of July 5, 2006 and references cited.).

This phenomenon shows up in mergers, where the combined legal group emerges much smaller than the two departments that came together (See my post of Sept.13, 2005 about Honeywell and Oracle and the layoffs that result from mergers.).

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