The HBR Consulting benchmark survey suggests a guideline for what expenses should be included in a general counsel’s budget. It is something like “Do not include expenses that a company would have to pay even if there were no law department at all.” That sounds constructive, and would eliminate annual meeting expenses and the costs to prepare and distribute annual reports, and directors’ fees, for example, since all of those costs would continue even if you shut down the law department.
My problem, however, is that patent registration and maintenance fees would presumably also continue even were a company to have never started, or later ended, its legal department. Yet I believe those expenses properly fall into the law department budget.
If law department managers are to be able to compare their metrics to others’, we need a consistent framework and definition for what’s in and what’s out.