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It’s quixotic to speak about the proportion of work law departments send to outside counsel

Writing in Legal Week, Nov. 23, 2006 at 22, Derek Bedlow summarizes three years of surveys of FTSE 500 legal departments (See my post of Dec. 4, 2006 on the first part of Bedlow’s quote.): “the proportion of work that they send out has decreased from 50% in 2004 to just 36% in 2006, despite strong growth in many areas of legal work.” A one-third decrease in the “proportion of work” sent out means what?

What were the instructions in the survey for how law departments should estimate this figure? If they tried to estimate hours worked by the buyer lawyers (the department) and the seller lawyers (the firms), that would be an extremely broad gauge (See my posts of June 28, 2005 on the make or buy decision and the 40/60 split; and March 19, 2006 on hours inside vs. outside in Canada.).

If the measure were thought to be the number of matters handled inside versus outside, the metric loses most of its punch. One vast matter overpowers lots of small fry.

Notional spend might underlie the estimate (See my post of Nov. 2, 2006 about DaimlerChrysler and notional rates.). If the departments implicitly calculated costs per hour inside and outside and divided their inside and outside spend, respectively, by those notional amounts, the approximations but might be closer to the truth in terms of proportions.

Just what was meant by respondents when they stuck their finger in the air to guess “proportion of work” (See my post of Dec.11, 2006 on specificity and nuance of terms.) remains unclear.