Articles Posted in Benchmarks

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On June 10th General Counsel Metrics, LLC, sent Release 1.0 of its benchmarking staffing and spending survey to the 196 law departments that had submitted data through May 31st.  The release covered companies in 26 industries and provides 25 benchmark metrics for revenue categories and numbers of lawyers as well as by country.  The next release will be in early August and will have well more than 350 participants.  I urge you to complete the straightforward, confidential survey today.  Click here and enter the basic six figures: https://novisurvey.net/n/GCMetrics2013.aspx

 

Release 2 will have a compilation of blog posts about graphics and plotting, and perhaps some early results on compensation metrics and matter management software.

 

If you would like to see what the releases look like, please write me: rees@reesmorrison.com and let me know your interest.

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My article published in the National Law Journal on April 8, 2013 discusses three innovative forms of graphics.  Mosaic plots, box plots, and heat maps can represent all kinds of data that law department managers care about.  It offers some examples of each kind of graphic after explaining what they look like.  If you would like to learn more about these techniques, please click here for the article.  13-04-08 grahics of mosaic box and heat NLJ Rees Morrison.

In general, the law department industry has only just begun to figure out what data it can efficiently generate;, how to represent that data graphically, in tables or in other forms; and what analyses are made possible by that combination.

 

If you appreciate graphical presentations of data, take the GC Metrics 2013 benchmark survey.  Here is the UR: https://novisurvey.net/n/GCMetrics2013.aspx T here is no cost to complete the quick, confidential survey and get the five Releases.  Aside from some demographic questions like name, email and industry, the survey asks for six 2012 figures: number of lawyers, paralegals, and other staff; inside and external legal spend; and revenue.

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This leader to an article caught my eye: “In markets with little regulation, litigation soars.  As regulation rises, litigation falls. Unless consumers are bound by so-called tort reform, their only recourse when harmed by an unregulated product is to sue its maker.” The quotation comes from Life Science Leader, December 2012 at 44.

Those who speak and write about law departments chronically bemoan the regulatory load faced by companies.  But when rules are laid down by government agencies, at least safe harbors and legislatively-sanctioned behaviors shelter companies from lawsuits in those areas.  In an unregulated market, the free-for-all companies might have fewer forms to complete but many more briefs to file.

Of course, everyone can think of exceptions and regulations can fan the fires of litigation, but the overall point bears on benchmark metrics and differences between industries.

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One of the predictions in the Economist, the World in 2013 at 25, is that conglomerates will become more common.  As banks and venture capitalists become more risk averse, the article argues, companies will invest their own cash in a wider array of enterprises or endeavors. Another reason is that companies in emerging markets have sprawled into all kinds of activities and are now competing globally. Third, conglomerates will return to favor because consumers like integrated offerings from companies they recognize and trust.

If indeed significantly more companies consist of somewhat unrelated business activities (my rough definition of a corporate conglomerate), it makes it more difficult for their law departments to benchmark themselves.  There simply are not many General Electric’s and 3M’s around so that they can find similarly-structured, multi-line peers.

Consultants who advise law departments of conglomerates may have to combine findings from several industries and create a proxy benchmark or they may have to conduct what I call “sector” benchmark studies.  Sector benchmarking is harder to do because participants have to untangled costs and headcount shared by each sector and define their sectors somewhat comparably.

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A recent article made two points regarding the graphical presentation of information. The points derive from a study that presented four kinds of graphics and asked a group of doctors to rate a pair their characteristics: were the graphs correct and were they enjoyable to look at.  The doctors said that an “icon graph” was the most accurate depiction of the data, compared to a table, a bar graph, or a pie chart, though it was also the least enjoyable.

Since icon graphs are new to me, let me describe the one the article showed.  The icon graph had for rows and four columns of squares.  Some of the squares were solid green, some solid red, and some had a diagonal line through them from the top left to the bottom right. Thus, each cell conveyed one of four combinations: either color and lined or not.  That’s a lot of information to convey in one graphic!

For example, if you had four categories of law firms you retained last year, by number of lawyers, and you had several ranges of fees paid, an icon graph could locate the appropriately colored/lined square for each firm over its fees paid during the year.

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During the four years that I have run the General Counsel Metrics benchmark survey, only four companies headquartered in Japan have participated.  On the other side of the Pacific, 19 subsidiaries of Japanese companies, all based in the United States, have taken part.

Now I may know why companies in Japan have rarely submitted benchmark data to the GC Metrics study.  According to the Asian Lawyer, January 2013 at 10, the Japan Federation of Bar Associations counted 707 bengoshi working in corporate law departments.  Bengoshi are the elite, Japanese-qualified lawyers.  That modest number jumped significantly from 64 in 2001: a tenfold increase in ten years. However, they still make up only two percent of the 32,000 bengoshi currently qualified to practice.

Even so, there is a Japan In-house lawyers Association, whose president is Yasushi Murofushi, the general counsel of Credit Suisse Securities (Japan).  There is also the 1,000 member Association of Corporate Legal Departments, headed by Tadaaki Sugiyama, general counsel of Kao Corporation.  Quite obviously, many non-bengoshi fill the ranks of Japanese legal departments.

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With permission, I reproduce below a post from Lynn Galbenski of Lumen Legal:

On February 12 from 1:00-2:00 p.m. EST, Lumen Legal will be hosting our first webinar of the year. It’s part of our 2013 Corporate Counsel webinar series to help Corporate Counsel meet the challenges of a changing legal marketplace. We’ll host six free webinars held this year.

Our Founder and SVP of Strategic Initiatives, Dave Galbenski, will be interviewing Rees Morrison. Rees is the President of General Counsel Metrics, LLC. For more than 25 years, Rees has specialized in corporate counsel consulting. He’s helped hundreds of general counsel and chief legal officers manage their legal departments more effectively. In 2009, he launched the first corporate counsel survey with over 800 corporate legal departments. He did so because he saw the clear need for a larger, simpler, less expensive survey. Today, over 1,000 corporate legal departments across 37 countries participate. In addition, 26 industries are covered. During the webinar, Rees talks about his latest release and shares the six fundamental benchmarks all corporate legal departments should monitor:

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This wasn’t Scheherazade, but General Counsel Metrics ended the year with more than one thousand law departments!  I stopped at that point and prepared Release 5.0, which went to all participants on January 29th.

The United States (644 companies), France (145 companies), and Canada (54) accounted for the largest portion.  At the end of 2011, the participants had a total of 26,480 lawyers and 20,637 paralegals and support staff (medians of 5 and 4 respectively; averages of 26 and 20).

You are cordially invited to join the 2013 group.  Perhaps it will exceed 2,000 participants!  Your first release will come in late May or early June.  Here is the URL:

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Having made my way through one recording, I plunged in with another.  This one I improved in several ways.  https://www.youtube.com/watch?v=PwqLeN1QLNI&feature=youtube_gdata_player

Given my self-imposed limit of close to three minutes, I did not go into much about the definition of “lawyer,” the scope of whom should be included (more there on “hidden lawyers”), or part-time equivalents.  Notwithstanding these finer points, “lawyers” seems to be such a straightforward number.

One other point I did not make is that I have noticed that often when general counsel complete my survey twice, the numbers shift.  My thought all along with General Counsel Metrics and its global benchmark survey was that the Dec. 31st date would be a memorable date, a line in the sand for everyone as to how many lawyers they had on the payroll that final day.

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Inspired by my 10-year old son, I created my first YouTube video.  You can sit back and revel in 3 minutes and 34 seconds of unadulterated viewing pleasure at the following link: https://www.youtube.com/watch?v=uw83rrA7oSk

 

My thought is to produce a series of these videos.  YouTube might not be the online site of choice for general counsel who care about benchmark metrics, but it is fun to create these videos.  More importantly, it provides people who favor this style of learning with some content.