Humble title, slow growth, and few lawyers for its market cap (Rio Tinto)

Three observations result from a profile, in In-House Perspective, Vol. 2, Oct. 2006 at 39, of Charles Lawton, Legal Advisor of Rio Tinto, the mining behemoth.

Start with Lawton’s title. If that is his official title (Legal Advisor), it utterly lacks the oomph of “Chief Legal Officer” or “General Counsel.” The point it makes is clear: a “legal advisor” is merely a secondary source of specialized information to business executives rather than a peer.

The article also says that Lawton’s team in London consists of eight lawyers, while there are approximately 25 in Australia – without specifying that they are all lawyers – and 15 in North America. Those groups, which I presume to be lawyers, “are part of their local management structure.” In other words, the lawyers outside of London do not report to Lawton. Moreover, when Lawton joined Rio Tinto in 1972, his department had ten solicitors. Does that mean the UK group shrank over the past 24 years, or that the company’s stock of lawyers grew from 10 to only 50? Slow growth, it seems to me.

Finally, with a market capitalization of some $80 billion, if 50 lawyers is the in-house contingent, then Rio Tinto has 1.6 lawyers per billion dollars of market cap (See my post of May 26, 2007 on market capitalization as benchmark denominator.).