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Wish we had clarity on the number of lawyers per U.S. company with a law department

The Association of Corporate Counsel (ACC) has expanded to “more than 28,000 members (in 10,000 companies).” That statement from Corporate Counsel’s August issue tells us its membership averages 2.8 lawyers per member department, a calculation that does not support any estimate of the average or median number of lawyers per U.S. law department. Even if all the members were U.S. departments, who knows what percentage of the lawyers in the 10,000 departments belong to the ACC? All we can know is that 100 percent of the solo in-house lawyers in that set are members. Several times I have referred to an average number of lawyers per department, but without support for the estimate (See my post of April 30, 2010: three lawyers per department; May 10, 2010: average of three lawyers per department; Oct. 20, 2010: estimates 2-3 lawyers per department on average.).

Consider two clues for a representative number of lawyers per U.S. department (See my post of Sept. 25, 2005: ACC figures of 71,702 lawyers in 23,540 U.S. corporations averages 3.05; and Feb. 9, 2008: 60% of legal departments in the US have fewer than 5 lawyers.).

First, we can build on that last statement of 60 percent at 4 or fewer. Given power laws and probable distributions, assume 32 percent are single-lawyer departments; 16 percent have two lawyers (a drop in half from one level to the next higher is quite common in many distributions), 8 percent have three and 4 percent have four lawyers. If so, the median would be one (since more than half have only one lawyer and the average would1.6.

To test this distribution, I found that last year, of about 800 participants in the General Counsel Metrics global benchmark survey, departments of six lawyers or fewer accounted for 48 percent of the total. That included one-lawyer departments (9.3%), two lawyers (9.5%), three (8.1%), four (8.2%), five (7.7%) and six (4.3%). There was therefore some falloff in participant numbers as law department size increased, but nothing like the hypothetical above.

It is conceivable that small departments pass over benchmark surveys more than larger departments because the one, two and three lawyer general counsel feel they have less maneuverability in response to benchmark metrics.

Here is a second way to move closer to an answer. Someone has data about how many companies operate in the U.S. at various revenue levels. If four lawyers per billion dollars of revenue holds as a reasonable benchmark, then if we knew the percentage of companies with $250 million in revenue – assumed to have one lawyer – and the number at $500 million – assumed two lawyers – and continued with that mathematical exercise, we could have another pointer to the median of lawyers per corporation in the U.S.

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