Maybe my math is wrong, but Royal Dutch Shell appears to have uncapped a gusher for eight law firms. A paragraph in Corp. Counsel, Nov. 2010 at 18, states that the 800-lawyer in-house team recently “cut its list of outside firms from 60 to just eight.”

If we apply the rough rule of thumb of $600,000 per inside lawyer spent on external counsel, that pegs Shell at about $480 million externally. Earlier, it quotes the general counsel as saying that the energy giant spends half its total legal budget on outside counsel. Given that Shell’s worldwide revenue was about $458 billion in 2009, at total legal spending as a percentage of revenue of 0.20% (a plausible figure for such a huge company), an estimate of $900 million in total legal spending seems quite conceivable and around half of that comes to a figure close to the $480 million estimated above.

What is virtually impossible to conceive is that eight firms divide a Fort Knoxian pie of roughly that value, that they average a stratospheric $50+ million a year ifrom Shell! How can a law firm that barrels along with in that munificence hold itself out as independent?

Maybe my math is wrong, but Royal Dutch Shell appears to have uncapped a gusher for eight law firms. A paragraph in Corp. Counsel, Nov. 2010 at 18, states that the 800-lawyer in-house team recently “cut its list of outside firms from 60 to just eight.”

If we apply the rough rule of thumb of $600,000 per inside lawyer spent on external counsel, that pegs Shell at about $480 million externally. Earlier, it quotes the general counsel as saying that the energy giant spends half its total legal budget on outside counsel. Given that Shell’s worldwide revenue was about $458 billion in 2009, at total legal spending as a percentage of revenue of 0.20% (a plausible figure for such a huge company), an estimate of $900 million in total legal spending seems quite conceivable and around half of that comes to a figure close to the $480 million estimated above.

What is virtually impossible to conceive is that eight firms divide a Fort Knoxian pie of roughly that value, that they average a stratospheric $50+ million a year ifrom Shell! How can a law firm that barrels along with in that munificence hold itself out as independent?