Law Department Management Blog
“The amounts spent on outside counsel for litigation is much higher for a U.S. legal department versus a similarly sized international company.” That claim by Marcus Linden in Met. Corp. Counsel, Vol. 17, Sept. 2009 at 22, leaves several holes to be patched. I don’t doubt the essential point, but the statement needs several improvements for clarity.
It would be tighter if the international company does not do business in the United States in the same volume that the U.S. legal department’s company does. Otherwise, where a company is headquartered makes little difference to its exposure to lawsuits and attendant costs for business done in the United States.
Secondly, some of the statement’s looseness would be reduced if the two companies produce the same goods or services. Otherwise, size alone, as measured by employees or revenue, has little bearing on litigation vulnerability and expense.
Third, it seems plausible to me that an experienced US litigation team will handle certain problems less expensively that would an inexperienced foreign company. Discovery is one example, including litigation holds.
A fourth looseness covers discovery costs. Given translation and travel costs, the non-US legal department might rack up much higher expenses than a domestic firm.