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What accounts for differences in lawyers per unit of revenue across industries? Patents and regulations

All companies have contracts; all have employees. All companies have real estate issues; all have some corporate activities like finance, subsidiary housekeeping, and securities. All companies have some level of litigation, so these five areas of law don’t account a priori for the wide differences across industries in median lawyers per billion dollars of revenue.

The biggest causes of the differences probably arise from patents and regulations. Companies in industries that rely on technical innovation and patent protection, notably pharmaceuticals and telecommunications and high tech, can staff up to half their law departments with intellectual property lawyers. Companies in industries that navigate through pervasive governmental regulations – banks, insurers, financial services – likewise have more lawyers per unit of revenue.

An interesting benchmark would be “core lawyers” – lawyers in-house other than IP and regulatory. We could refer to this as core lawyers per billion and have a much more comparable metric for law departments across industries.

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