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Ratio of US to non-US law firms, law firms per billion, and concentration at UTC

A chart in a presentation recently about the legal function at United Technologies gives the numbers of firms the manufacturing giant retains in the US and outside the US. If we take the most recent year’s total (418 firms in 2008) and the UTC revenue given in the presentation ($58.4 billion), the company retained just a bit more than seven law firms for every billion dollars of its revenue.

During the four years starting in 2005, the total number of law firms retain stayed between 401 and 421. During that time, US law firms accounted for about 40 percent of the firms retained.

Another slide shows that in 2008 about 56 firms accounted for $125 million of the company’s total spend, which was 75 percent of the total spend. Therefore, about 13 percent of the firms commanded three quarters of the spend. In 2007, about 46 firms accounted for $137 million of spend, again being 75 percent of the spend, so a somewhat lower percentage of the firms.

Finally, the presentation states that the company spent 0.22 percent of its revenue in 2008 on outside counsel ($127 million on revenue of $58.7 billion).

I wish I could corroborate the three metrics: seven firms per billion, 40 percent domestic firms, and 15 percent or so accounting for 75 percent of the external spend.

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