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Hans Albers, chief of staff and associate general counsel in international legal services at Juniper Networks, and president of ACC Europe, discusses how legal departments can approach staffing following the recent publication of The Association of Corporate Counsel (ACC) 2019 Global Legal Department Benchmarking Report.
Legal staffing is one of the key areas of legal benchmarking. It helps clarify whether your team is understaffed, overstaffed, optimally balanced between lawyers and other professionals, and properly funded.
GCs often ask me for more data on staffing as this is one of the key questions they deal with when setting budgets and strategic planning for their departments. The most important metrics include:
• number of legal department staff, by position
• staff by position as a percentage of total legal department staff
• staff by position as a percentage of total company employees
• the lawyer to staff ratio
• legal department staff standardised by company revenue
From salary to benefits, staffing is one of the largest costs for a corporate legal
department. Thus, it’s crucial to make sure the department has the right number of staff. Legal departments also want to make sure they have the right combination of staff—lawyers, paralegals, legal operations professionals, administrators—to tackle their unique workload. Staffing metrics provide the data needed to make sure the department is operating as efficiently and effectively as possible.
That’s a challenging question to answer, since the value of legal staff rarely makes an observable impact on overall revenue. In-house lawyers are critical to strategy, but they don’t produce commodities, or sell them, or invest capital. Their value is hard to quantify.
But the fact that it’s hard to quantify doesn’t mean that it’s not important—on the contrary. ACC does include lawyers per US$1bn in company revenue as one of its legal department metrics, which means that a company can compare this metric with those of other companies of similar size, law department size, industry, etc.
An inadequately staffed legal department won’t be able to serve its clients well, keep up with the velocity of business, avoid potentially expensive risks, or operate in a proactive, rather than reactive state. So, departments will want to maintain optimal staff levels to best contribute to the business.
Benchmarking is so important because there are plenty of best practices for law departments in circulation, but no such thing as a ‘standard’ legal department. The ACC 2019 Global Legal Department Benchmarking Report’s metrics sort legal departments by five factors:
• department size
• company size
• ownership structure
Each corporate legal team represents a unique permutation of these factors. So ‘best practices’ are nothing of the sort if they’re blanket statements on, say, all legal teams with a given ratio of lawyers to legal ops members, or legal staff for all wholesale merchants, or mining companies, or what have you.
In this survey, ACC also tracked the department’s use of technology and most commonly used vendors (with satisfaction ratings), which nicely complements metrics about spending, staffing, and workload.
Another important way to benchmark is performance scoring, where respondents quantify the importance and satisfaction of certain legal department management attributes. Some of these are related to staffing. For example, you can score your department on ‘work allocation among our legal department staff is measured or tracked to ensure the right work is being done by the right people.’ Then you can see how peer departments rate themselves, offering a new way to frame your own department’s goals and plans.
The main staffing finding is that the median for the ‘gold standard’ metric in this category—lawyers per US$ 1bn in company revenue is 8.7 lawyers. That fluctuates quite a bit by industry—the lowest is 3.6 lawyers, in wholesale trade, and the highest is 15 lawyers in the service industry. But even that statistic, by itself, isn’t very helpful, and departments should narrow the response pool by their other unique factors, like revenue category. A small company may hire far more lawyers per US$1bn in revenue than a large company.
This is the first year ACC has published this report, so it’s too early to point to any trends. However, one surprising result was that the median number of lawyers per legal department is four, and the mean is just over 24. We typically think of corporate legal departments as very large, but those are likely the departments we hear the most about. For every company with 500 lawyers, there are many more with only three or four lawyers. Overall, the total inside legal staff (lawyers plus other non-lawyer staff members) median was six, and the mean was 42.7.
One takeaway that I’m interested to see trend data on over the next few years is lawyers as a percentage of total legal department staff. The current median is exactly two-thirds—66.7%. As companies focus more on their legal operations goals and optimising staff and resources, I think we will see departments add more paralegals, more legal operations professionals, more contract and IP administrators, and other allied professionals. A great deal of work handled by the legal department can be successfully achieved by less expensive resources and/or self-service tools, so I think one takeaway is to watch what happens to this metric in the next three to five years.
There is no one approach that works for all corporate legal departments, so my tip is to have as much information at your disposal as possible. Reports like this one make that easier.
Companies in a highly regulated industry may need more lawyers, while a legal department that handles huge discovery projects will need more paralegals or non-legal professionals. Knowing where your peers (by company type, geographic location, industry, etc.) stand is the best guide towards where your department should be for staffing.
Then, once the department has a strong baseline, my other tip is to check-in at regular intervals to make sure nothing has changed—and if it has, to reassess staffing decisions accordingly. It may be that you should be fine-tuning your focus on getting the right work to the right internal resource.
The Association of Corporate Counsel (ACC) 2019 Global Legal Department Benchmarking Report.
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Louisa leads marketing for the in-house legal community at LexisNexis. She joined the dedicated in-house team at LexisNexis four years ago and has a passion for driving and facilitating initiatives which are customer-focused at their heart. Her vision
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Prior to her in-house focused role, Louisa led the marketing for the bar and mid-market private practice sectors as well as product marketing lead for LexisPSL - LexisNexis' cloud based, practical guidance and legal research software solution.
She brings 20 years' marketing experience both client and agency side, specialising in B2B marketing in the Legal, TMT (Telco, Media and Technology) and Financial Services industries. In both South Africa, Europe and the UK.
Louisa is also an active member on the LexisNexis Gender Equality Matters (GEM) steering committee and is involved with the Families at LexisNexis Group which brings together, supports and lobbies for change those with an interest in balancing the challenges
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