Published on:

Pushing past the standby of lawyers per billion of revenue

Lawyers per billion of revenue. Sounds so simple. Underneath, however, definitional and operational complexity lurks. My article last year on this ubiquitous benchmark, lawyers per billion of revenue, covers many of the nuances [] but afterwards I had some further thoughts.

One is that a better measure would be lawyer-equivalent per billion, where there is an agreed-to conversion rate, so to speak, between paralegals and lawyers (perhaps 3 to 1) and administrative support staff and lawyers (perhaps 5 to 1). An administrator might be two to one. If everyone working in a legal department could be converted into a common denominator, the benchmark standard would then much more comfortably accommodate a broader range of staffing profiles (See my post of July 31, 2006: secretaries counted in terms of lawyer-equivalents; and June 28, 2006: a proposed standard.).

Second, if there were a convention to treat long-term temps (permanent temps?) and contract workers within the standard numerator, even more variations in legal department structure would be dealt with. For example, if anyone worked more than six months in a department, count them as a permanent equivalent for that period.

Next, if I indulge my propensity to quantify, perhaps there is a way to start with a standard cost per lawyer and adjust for the inclusion of lawyers who are paid much less. So if an American legal department pays on average $175,000 for its US-based lawyers, but pays its two lawyers in Bulgaria $100,000 each (adjusted for purchasing power parity), maybe some adjustment is appropriate. I am groping toward a way to deal with variable compensation levels around the world and how that might affect the absolute number of lawyers (See my post of Sept. 21, 2005: arbitrage compensation levels within the department.).

In a distant vision I can see adjusting for the experience level of the lawyers also. A sophisticated benchmark might weight lawyers by years out of law school or years with the company.

Posted in:
Published on:

Comments are closed.