Published on:

Shortcomings of the ubiquitous benchmark metric, lawyers per billion of revenue

An article in the Practical Law J., Vol. 1, Nov. 2009 at 70, offers a benchmark calculation about Computer Sciences Corporation (CSC). That calculation creates an opportunity to reflect on the shortcomings of the common benchmark, lawyers per billion. At $16.5 billion in revenue and around 100 in-house lawyers, CSC employs six lawyers per billion, perhaps a bit below the typical figure you find in technology companies.

When you think about that metric – lawyers per billion – for law departments generally, you realize its infirmities. Fundamentally, it leaves out the support staff who can make such a difference in the productivity of those lawyers (See my post of Oct. 27, 2009: one-to-one ratio.). With that omission, what is also lost is the more nuanced understanding of specialty roles, such as IT support, knowledge managers, paralegals experienced in various practice areas, and electronic discovery mavens.

Not that any benchmark metric can bear more than its weight, but going further, lawyers per billion of revenue takes no account of where the lawyers are located (See my post of Jan. 16, 2009: decentralized law departments physically with 13 references.).

Nor does that metric convey anything about the reporting structure of the lawyers, which can be flat, or very hierarchical, or many variations in between, and these days often matrixed. Lawyers per billion is also vulnerable to eliding the distortions of secondments, interns, temporary lawyers, and other contract personnel.

Even with these criticisms, the hoary metric has a common currency among general counsel and serves a useful purpose.

Posted in:
Published on:

Comments are closed.