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The fraction of your company’s value you would attribute to your legal function

A special supplement to the Fin. Times, June 9, 2006 at 5, delves into the views of CFOs on risk management. The two professors who wrote the piece had asked 334 CFOs “What fraction of your company’s value would you attribute to the finance function?” The average estimate was 10 percent of the value of the company and there was relatively little variation by region, industry or between public and private companies.

I am not sure what to make of the responses to that question if it were asked of a large group of chief legal officers. I can’t conceive how they would even begin to think about quantifying such a figure. If the figure has validity, it would bestow the ultimate measure of a law department’s value.

I would be fascinated to see how a group of CEOs rank the various support functions in terms of their contribution to the value of the company. Where would legal stand?