2019 GLOBAL LEGAL DEPARTMENT BENCHMARKING REPORT
2019 GLOBALLEGAL DEPARTMENTBENCHMARKING REPORTIn partnership with
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June 2019The Association of Corporate Counsel is pleased to partner with Major, Lindsey & Africaon our 2019 Global Legal Department Benchmarking Report. Each year we aim toprovide our members and the broader in-house community with relevant and timelydata that can help legal departments make more informed business decisions.This year we present a host of standardized financial and operational metrics mostrelevant to legal departments including staffing, inside and outside spending, workload,work allocation, law firm and fee structure usage, and legal technology adoption. Wealso share how departments rated themselves across 10 key performance attributes.The data presented in this report represents a wide range of legal departments spanning 30 countries and 71 industries. Department size ranges from a single lawyer to over1,000 staff members in organizations that span from the tens of millions to the hundredsof billions in annual revenue.In addition to this high-level report, we offer a suite of more targeted supplementalreports based on company size, legal department size, and industry. We also offer tailored reports allowing for more direct peer group comparisons.We welcome your feedback as we are continually refining our data collection processand improving the scope, quality, and relevance of our metrics. We hope this reportprovides legal departments with actionable insights and valuable data to benefit inhouse counsel and legal operations professionals.ACC Research and Benchmarking ank you to all participating legal departments and a special thank you to our key contributors,whose feedback greatly improved the quality of the resulting data.Bart MooneyDirector, Contracts and Legal Operations, Ingram Micro Inc.Marcia HakalaAssociate Consultant, Legal Operations, Eli Lilly & CompanyMike RussellLean Leader — Legal Operations, Ingersoll-Rand CompanyMayo Clinic Legal Departmentwww.acc.com/benchmarking2019 Global Legal Department Benchmarking Report 1
Table of Contents34Methodology and DataTerms and Definitions 56Demographic Summary1. Key Benchmarks — Staffing5. Use of Technology81013156. Performance Scoring192. Key Benchmarks — Spending3. Key Benchmarks — Workload and Work Allocation4. Key Benchmarks — Law Firms and Fee Structures2225Benchmark CalculationsLegal Technology Definitions2627Industry DetailParticipating Organizations by Industry2 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.
Methodology and DataSurvey Instrument: The survey questionnaire was offered through an online survey platform as well as throughan embedded electronic PDF, both of which allowed respondents to save their work and send to other membersof their department to complete relevant sections if needed.Fielding Period: The survey opened on January 30, 2019, and closed on April 12, 2019. Reminder emails weresent weekly.Target Population: We targeted one relevant representative — the person we considered most capable of reporting on the information requested — in each legal department with at least one member of ACC. We reachedout to around 10,000 organizations worldwide. In order of priority, we first sent invitations to heads of legaloperations or, in many cases, a department’s sole legal operations staff member. If we did not have a memberin that position, we then targeted the organization’s general counsel/chief legal officer — who would be able toappropriately delegate this task. If a member was not in either of these positions, we then targeted the highest-ranking individual in the legal department. Finally, if we received no response after repeated attempts, wereached out to a broader group of members in each department requesting that they forward the invitation tothe most appropriate individual or group within the department.Participation: A total of 508 legal departments participated. Apart from targeted email messages,opportunities to participate were also sent through LinkedIn campaigns.Comparability: Respondents were asked to report all information for the period January 1, 2018 to December31, 2018 or the closest corresponding fiscal year. We asked legal departments within subsidiary companies toreport their information at the level of the subsidiary rather than at the level of the parent company.Currency: Respondents were asked to enter all financial values in US dollars. Non-US respondents were asked touse the exchange rate on December 31, 2018, for currency conversion.Industry: All participating organizations were separately assigned up to three industry affiliations based on Standard Industry Classification (SIC) codes. See “Industry Detail” section for the industry breakdown.Anonymity: Several organizations requested anonymity. We therefore include the designation “Anonymous” inour “Participating Organizations by Industry” list with the associated number of respondents whorequested anonymity.Incomplete or Unusual Data: Not all respondents answered all questions. In cases where data appeared unusual,respondents were emailed and asked to clarify their responses. In some cases, we received no reply and therefore had to omit certain data entries from our reporting. The benchmarking metrics reported tend to have alower sample as complete data is required for all components of each benchmarking calculation.Statistical TerminologyM ean: The values of each observation are summed together and divided by the total numberof observations. edian: This is the middle value of all observations ordered from low to highM(also called the 50th percentile).n : This indicates the number of observations for a given metric or reported value.www.acc.com/benchmarking2019 Global Legal Department Benchmarking Report 3
Terms and DefinitionsCentralized — GeographicallyLegal department personnel are based in one primary location.Mixed — GeographicallyMajority of personnel are based within a primary geographic location, but some arelocated across operational business units,subsidiaries, or divisions.Decentralized — GeographicallyMajority of personnel are located across multiple operational units, subsidiaries, ordivisions.Centralized — Reporting StructureGenerally, personnel have a direct line reporting within the legal department up tothe general counsel/chief legal officer, regardless of geographic location.Mixed — Reporting StructureReporting structures are equally mixed across personnel, with some having a directline report within the legal department and others within their operational/businessunit.Decentralized — Reporting StructureVast majority of personnel have direct line reporting within their operational/business unit and dotted line reporting within the legal department up to the generalcounsel/chief legal officer.Paralegals/Case ManagersTypically, non-exempt employees working on legal matters under the supervision oflawyers.Legal Operations ProfessionalsStaff who are solely dedicated to the management of a legaloperations function.Non-Legal ProfessionalsMay include corporate secretary office personnel, technology professionals, IPdatabase management, contract and compliance analysts, and librarians. These aretypically exempt employees performing more independent work.Inside Legal SpendIncludes legal staff compensation (salary, cash bonuses, taxes, and benefits), overhead, and operating expenses (all administrative and office expenses and corporatecosts allocated to the legal department). Does not include settlement costs, judgments, fines, recoveries, or filing fees.Outside Legal SpendIncludes outside counsel, other service providers, and patent and trademark filingfees. Does not include settlement costs, judgements, fines, recoveries, or costs associated with claims or capitalized expenses.Litigation MattersIncludes internal and external litigation matters (lawsuits only), including those thatwere still active at the time of survey participation.ContractsContracts reviewed in 2018 from initial request until the contract has been completed or negotiations have been suspended or abandoned.Contract Cycle TimeAverage number of days from initial request until the contract has been completedor negotiations have been suspended or abandoned.“Significant” Law FirmsThose firms that make up approximately 80 percent of the legal department’s spending on outside counsel.4 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.
Demographic SummaryTable 1 presents a summary of all participating legal departments across six standard segments. Of note,we received strong non-US participation (36.2 percent) and a significant presence of organizations in themanufacturing and services industries. Nearly half of all organizations are privately owned and vary greatlyin size, with one quarter under 100 million in revenue and 40 percent greater than 1 billion.Table 1: Demographic SummaryRegionOrganization industryaOrganization typebOrganization’s total grossrevenue 2018 (US )Organization employeesLegal staffAsiaAustralia/PacificCanadaEuropeLatin AmericaMiddle East and AfricaUSAgriculture, forestry, onWholesale tradeRetail tradeFinance, insurance, real estateServicesPublic administrationPrivatePublicWholly owned subsidiaryNon-profitGovernment (federal, state, local)Other 100M 100M to 499M 500M to 999M 1B to 2.9B 3B to 9.9B 10B or more 1,0001,000 to 4,9995,000 to 9,99910,000 to 49,99950,000 or more12 to 910 to 2425 to 4950 to 7475 to 99100 or 5.2%7.4%15.4%46.7%15.8%7.4%3.3%2.5%8.8%Industry list is based on Standard Industry Classification (SIC) Codes. See “Industry Detail” section for exhaustive list of sub-industries included. In some cases,companies were assigned more than one industry affiliation. Percentages therefore total to greater than 100 percent.bPercentages total to greater than 100 percent due to ability to select more than one response option.awww.acc.com/benchmarking2019 Global Legal Department Benchmarking Report 5
1. Key Benchmarks — StaffingLegal staffing is a crucial component of any corporate legal department benchmarking effort. This is particularly true for legal given the uniquely difficult task of demonstrating the value of additional headcount whenthere is rarely a direct tie to the company’s revenue. Optimizing headcount is essential not only for effective legal coverage and product quality but also for internal client satisfaction and to operate in a proactiverather than reactive state. Table 2 presents 24 standardized staffing metrics representing the overall surveyrespondent population. We include five major staff categories. Contract (temporary) staff are listed as aseparate category and are not included in the total inside legal staff calculations.Table 2: Legal Department Staffing MetricsnMean MedianNumber of Legal Department Staff by PositionNumber of lawyers50624.34.0Number of paralegals/case managers5045.41.0Number of legal operations professionals5001.80.0Number of non-legal professionals4976.50.0Number of administrative/secretarial staff5053.70.3Total inside legal staff48642.76.0Number of contract (temporary) staff4701.50.0Lawyers as a percentage of total staff48668.2%66.7%Paralegals/case managers as a percentage of total staff49312.0%6.7%Legal operations professionals as a percentage of total staff4993.2%0.0%Non-legal professionals as a percentage of total staff4946.8%0.0%Administrative/secretarial staff as a percentage of total staff4948.2%0.0%Staff by Position as a Percentage of Total Legal Department Staff6 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.
Table 2: Legal Department Staffing Metrics (Cont'd)Staff by Position as a Percentage of Total Company EmployeesLawyers as a percentage of total company employees5021.4%0.3%Paralegals/case managers as a percentage of total company employees5020.2%0.0%Legal operations professionals as a percentage of total company employees4990.1%0.0%Non-legal professionals as a percentage of total company employees4950.1%0.0%Administrative/secretarial staff as a percentage of total company employees5030.2%0.0%Lawyers per paralegal/case manager2884.93.0Lawyers per legal operations professionals14114.38.5Lawyers per non-legal professionals1605.83.0Lawyers per admin/secretary2545.84.3Lawyers per total non-lawyer staff3772.21.5Lawyers per 1 billion in company revenue497223.58.7Legal staff per 1 billion in company revenue477342.213.5Lawyer-to-staff RatiosLegal Department Staff Standardized by Company RevenueNote: See “Benchmarking Calculations” section for a complete list of metrics and their calculations.METRIC HIGHLIGHTLawyers per 1 Billion in Company Revenue (Median)Overall:Industry try Low:Wholesale Trade:3.642019 Global Legal Department Benchmarking Report 7
2. Key Benchmarks — SpendingLegal spend takes many forms but it primarily centers around internal staffing costs, external legal fees,and the resulting cost of not having adequate legal resources (i.e., the cost of regulatory fines and penalties). We therefore break down internal and external legal spend into a series of relevant metrics that arestandardized by staff size, overall legal spend, and company revenue. To allow for more direct and consistent comparison, these numbers do not reflect settlement costs, judgements, fines, recoveries, or costsassociated with claims or capitalized expenses. Table 3 lists 37 standardized spending metrics representingthe overall survey respondent population.Table 3: Legal Department Spending MetricsnMeanMedianTotal Legal SpendLegal spend (budgeted) 2018401 12,363,487 1,600,550Legal spend (actual) 2018439 16,664,691 1,900,000Budget to actual spend ratio 201839811.0%0.0%Total legal spend (actual) as a percentage of company revenue 20184272.3%0.4%Company revenue divided by total legal spend (actual) 2018434 633 249Total legal spend per lawyer438 718,580 497,042Total legal spend per legal staff420 432,856 294,950Company revenue per lawyer497 406,295,076 115,321,013Company revenue per legal staff477 248,095,521 74,000,000Inside legal spend (actual) 2018424 7,666,164 847,981Inside spend (actual) as a percentage of total legal spend (actual) 201847652.9%50.0%Inside spend (actual) as a percentage of company revenue4151.5%0.2%Revenue per inside spend (actual)419 1,621 530Total lawyer compensation and benefits spend400 4,689,479 560,000Lawyer compensation and benefits as a percentage of total inside spend48371.9%79.0%Total non-lawyer compensation and benefits spend293 1,800,612 225,000Non-lawyer compensation and benefits as a percentage of total inside spend48116.6%13.3%Total other inside spend460 1,173,411 0Other inside spend as a percentage of total inside spend47911.5%0.0%Inside spend per lawyer423 297,635 227,500Inside spend per legal staff405 180,092 142,857Cost per lawyer hour399 114 90Cost per non-lawyer hour270 63 39Inside Legal Spend8 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.
Table 3: Legal Department Spending Metrics (Cont'd)nMeanMedianOutside Legal SpendOutside legal spend (actual) 2018434 9,710,316 845,000Outside spend (actual) as a percentage of total legal spend (actual) 201847647.1%50.0%Outside spend (actual) as a percentage of company revenue4261.7%0.2%Revenue per outside spend (actual)415 1,910 485Total outside spend on outside counsel425 5,794,148 612,000Outside spend (on outside counsel) as a percentage of total outside spend48480.6%90.0%Total outside spend on other service providers450 730,071 10,482Outside spend (on other service providers) as a percentage of total outside spend4838.4%5.0%Total patent and trademark filing fees452 662,117 1,575Patent and trademark filing fees as a percentage of\total outside spend4837.8%2.0%Total other outside spend467 195,269 0Other outside spend as a percentage of total outside spend4833.3%0.0%Outside spend per lawyer433 423,977 227,500Outside spend per legal staff414 251,655 130,927Note: See “Benchmarking Calculations” section for a complete list of metrics and their calculations.METRIC HIGHLIGHTCost per Lawyer Hour (Median)Overall: 90per hourIndustry High:www.acc.com/benchmarkingIndustry Low:Mining:Wholesale Trade: 123 per hour 74 per hour2019 Global Legal Department Benchmarking Report 9
3. Key Benchmarks — Workload andWork AllocationOptimizing workload and how that work is allocated internally and externally is critical for maintainingproper coverage and efficiency in the legal department. Just as headcount and spend are intimately tiedto one another, having a better understanding of current workload and work allocation directly affectsproper optimization of headcount and spend. This section first presents metrics on litigation matters andcontracts handled in the legal department. We then present the internal versus external work allocationamong 12 different work area categories. Finally, we show how insourced work is distributed across several staff positions.Table 4: Legal Department Workload MetricsnMeanMedianLitigation MattersNumber of litigation matters handled473427.47.0Number of litigation matters handled per inside lawyer4729.31.9Number of contracts reviewed4462,198.4300.0Number of contracts reviewed per inside lawyer444173.289.6Contract cycle time (in number of days)41430.915.0ContractsNote: See “Benchmarking Calculations” section for a complete list of metrics and their calculations.Figure 1 shows how legal departments allocate work across 12 broad work categories. The data in eachbar chart represents the percentage of departments allocating work in five ways. The work is performedin-house, outsourced to a law firm, outsourced to an alternative legal service provider (ALSP), handled inanother way, or not performed at all. In many cases, each type of work is allocated in more than one way,which is reflected in the resulting data.10 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.
Figure 1: Legal Department Work Allocation100%97%80%57%60%21%16%20%9%3% 2% 1%0%Contract Management —Review and Drafting100%25%18%4%3%Discovery — Data CollectionDiscovery — DataProcessing /Hosting88%80%69%70%60%50%40%44%19%20%4% 3% 7%4% 2% 5%0%Document Management —Review and Drafting100%34% 36%31%40%94%Due Diligence4% 4%7%Intellectual PropertyServices93%79%80%60%50%40%20%1%0%1% 2% 4%2% 1% 1% 6%Invoice ReviewLegal Operations71%40%48%31%20%0%90%65%60%1%Legal Research100%80%3% 2%2%1%11%Litigation — Legal Hold Insource (In-house)www.acc.com/benchmarking Outsource to Law Firm1% 1%10%6%Litigation — Case/ProjectManagement Outsource to ALSP/LPO2%5%5%Records Management Other Not Applicable2019 Global Legal Department Benchmarking Report 11
12 2019 Global Legal Department Benchmarking Report 2019 Association of Corporate Counsel, All rights reserved.45.2%63.9%Legal operationsRecords management65.6%Invoice review72.4%64.5%Intellectual property servicesLitigatio
2019 Global Legal Department Benchmarking Report 1 The Association of Corporate Counsel is pleased to partner with Major, Lindsey & Africa on our 2019 Global Legal Department Benchmarking Report. Each year we aim to provide our members and the broader in-house community with relevant and timely
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Writing Human Factors Plans & Reports for Medical Technology Development pReVIeW COpY This is a preview edition of an AAMI guidance document and is intended to allow potential purchasers to evaluate the content of the document before making a purchasing decision. For a complete copy of this AAMI document contact AAMI at 1- 77-2-22 or visit www.aami.org. PREVIEW COPY This is a preview edition .
