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Predominance of privately held companies in two benchmark surveys of general counsel

An unpublished paper submitted by Michele DeStafano Beardslee and three co-authors to the Georgetown Conference on the Future of Law Firms at 3-4 laments benchmark surveys by trade groups and consulting firms. Aside from low response rates and an inability to compare respondents and non-respondents, she singles out a particular weakness: “most importantly, [the surveys] primarily study small or mid-sized privately held companies.”

The footnote to that quote explains that 46 percent of the respondents to Altman Weil’s 2006 survey had revenue of less than $1 billion and 60 percent were not public companies. In the ACC 2007 survey, 83 percent of the respondents had less than $2 billion in revenue, and roughly half were not public companies.

Nothing is wrong with benchmarking small law departments (five or fewer lawyers), since they make up by far the largest segment of all US legal departments. They are small because their companies have revenue to match (at an overall figure of about five lawyers per billion of revenue). With corporate clients on the smaller side, it follows that a significant portion have not gone public and taken on the additional expenses and scrutiny (See my post of March 29, 2010 #2: extra costs of being publicly traded; and Jan. 19, 2008: unknown metrics about non-publicly traded companies.).

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