“A given level of business activity generates this much legal work”

A general counsel I know, well respected and a veteran, states this and believes it to be profound. He is mistaken, I think.

Nothing dictates a cause-and-effect link between an amount of business activity and how much legal work it generates. At the one extreme, many business people conduct all sorts of arrangements on a handshake — not a lawyer in sight. At the other extreme, creative lawyers can identify risks and draft documents for the most innocuous business decision until the cows come home.

I believe that companies, like gardens consume all the planting, tilling, watering and weeding you can give them, are always able to absorb more legal services. Even between two companies that are peas in a pod, twins separated at birth, legal spend and activity can vary significantly at the same level of revenue.