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Small companies can have very odd profiles of lawyers per billion or lawyers per thousand employees

Here is a classic example of the distorted benchmarks produced by from some small companies. The Graduate Management Admission Council (GMAC) manages the GMAT test taken worldwide for admission to business schools. The current general counsel joined ten years ago as the only lawyer for the non-profit’s 34 employees. Today, the legal department has grown to 9, including 3 more attorneys while the number of employees has tripled to 140.

GMAC’s benchmarks are bizarre. Its 4 lawyers for 140 employees (28 per thousand) blows away typical metrics (See my post of Jan. 31, 2102: median in U.S. of about 2 lawyers per thousand.). Or consider a second common benchmark. The article on this in the ACC Docket, March 2012 at 92, doesn’t give the revenue of GMAC, but its website says that more than 200,000 people took the test last year. At $250 per taker, that revenue would have been around $50 million. Let’s double it because of (presumed) other GMAC services and to be very conservative. That would mean 40 lawyers per $1 billion, which from the General Counsel Metrics survey is eight times higher than the median benchmark.

Small companies haven’t yet grown enough to settle into more typical benchmark metrics for legal departments. For that reason, medians have much more legitimacy than averages.

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