In-House Counsel

Cost per internal lawyer hour and the ratio of support staff

By Rees Morrison

If a group of law departments have similar ratios of lawyers to non-lawyers, then a comparison of fully-loaded internal cost per lawyer hour gets at something comparable and meaningful. Otherwise, if the data comes from law departments that have significantly different staff ratios, the hourly cost match ups do not have much utility (See my post of Aug. 27, 2008: fully-loaded cost per lawyer hour with 31 references; and March 9, 2009: fully-loaded with seven more posts; and July 31, 2006: lawyer-equivalency ratios based on compensation).

We need a formula to take account of the different profiles of leverage. Alternatively, we should accept that fully loaded costs ought to be calculated per legal staff hour, which includes lawyers, paralegals and everyone else employed in the law department. We could still use 1,850 hours as the standard billable hours for lawyers and perhaps use 1,800 for everyone else. The reason for the reduction in hours is that few people in a law department other than lawyers work past normal closing hours or on weekend.

Full post as published by Law Department Management on April 08, 2009 (boomark / email).