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Some management insights into Proctor & Gamble’s massive legal department

The profiles of general counsel that appear in various trade publications dwell on employees, revenue and the number of lawyers, but they don’t ask about spending or non-lawyer staff. Even so, there is much to glean.

Take one instance. In Practical Law, June 2010 at 92, we learn that Proctor & Gamble’s 135,000 employees worldwide generated $76.7 billion in revenue in the company’s latest fiscal year thanks in no small part, I am sure to its law department of 315 lawyers based in at least nine cities outside two US cities.

From those base facts we can calculate that P&G has 429 employees per in-house lawyers and 4.1 lawyers for every billion of revenue.

We can then draw on customary benchmarks to project a few other plausible characteristics of the P&G department. It likely has about the same number of non-lawyers as lawyers, giving it 630 or so total legal staff. More, at typical ratios of outside spend per lawyer – on the order of $600,000 per lawyer – the department’s external budget could be upwards of $180 million. On and on we could go with benchmark-based estimates, but that is enough.

Aside from metrics, the profile tells us that P&G’s lawyers function in a matrix structure. Each of five geographic regions has a General Counsel. The department also has “both intellectual property and commercial lawyers dedicated to individual business units.” That does not necessarily mean those lawyers report to the business unit. They might simply do all their work for their assigned business.

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