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Previous posts on statistics have covered variance and standard of deviation (See my post of Feb. 18, 2011: variance; and Feb. 21, 2011: standard deviation.). Statistical analysts can take the calculations of dispersion one step farther. When they divide the standard deviation of a set of data by the average of the set, they produce what is called the coefficient of variation. It expresses the standard deviation as a percentage of the sample mean.

The coefficient of variation (CV) has one primary purpose. It is useful when you care about the size of variation relative to the size of the observation set, but that is not all. It also has the significant advantage that it is independent of the units of observation. For example, the value of the standard deviation of a set of invoice amounts will be different depending on whether they are measured in dollars or pound sterling. The coefficient of variation, however, can be compared for both as it does not depend on the currency. Alternatively, if a general counsel wanted to understand better the distribution of cases by elapsed months and by total fees – two different measurement units – the CV would tell which one ranges more widely.

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Once my recent post was written about metrics of Anheuser-Busch InBev, I thirsted for more on that legal department and its management practices. Mostly due to the columns Sabine Chalmers, the combined company’s top lawyer, has written, there were ample quaffs. In this post I have poured together the references to either InBev or the merged company.

The first set mentions InBev only (See my post of Nov. 25, 2006: leadership training for high-potentials; Oct. 31, 2007: survey your lawyers for alignment ideas; Feb. 6, 2008: uses Tedesco Technologies software; July 26, 2008: business plan and speculation on contents; June 17, 2008: tell law firms how to deal with calls directly from clients; July 11, 2008: general counsel of InBev in photo striding along with CEO; July 13, 2008: a compromise for travel costs to a lawyer retreat; and Sept. 16, 2008: role of Corporate Secretary explained.).

Once the merger consummated and Chalmers took the top role for the company, more posts appeared (See my post of Feb. 26, 2009: merger of InBev and A-B; March 15, 2009: fight feelings of insecurity if outside counsel deal with your clients; Dec. 10, 2009: huge travel demands on general counsel; Dec. 13, 2009: lawyers match business’s global footprint; Feb. 25, 2010: post-mortem competitions; March 24, 2011: GC also manages “corporate affairs”; and March 28, 2011: metrics of the department.)

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To appreciate industry-level benchmarks, compare a few metrics for the law departments of Google and Anheuser-Busch InBev that appear in Practical Law’s February and March 2011 issues (both at page 80). For Kent Walker of Google, more than 230 lawyers support $23.7 billion in revenue plus about 22,000 employees, from 21 law-department locations. For Sabine Chalmers of Anheuser-Busch InBev, 150 lawyers enable $36.8 billion in revenue, support a whopping 116,000 employees, and work from more than 20 law-department locations.

Reflect on the wide disparity between these very different companies on three benchmarks. A legally intensive software company needs one lawyer for every hundred employees whereas the beer manufacturing and distribution company does quite well with one lawyer for every seven hundred employees. A seven-to-one difference!

The software company averages about 11 lawyers per location; the beer company averages a bit more than half as many. The difference may reflect the gap in legal complexity between the two companies.

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Everything influences a law department’s workload, from clients to cases, from resources to roles, structure to software, time tracking to training (See my post of May 19, 2009: descriptive metrics for legal department workloads; and May 26, 2007: productivity metrics increase in the face of workload.). Too many things influence workload in a law department for this single post to cover that long waterfront. Indeed, you could fairly say that this blog as a whole tries to tackle law department workload.

Even so, among the 6,276 posts on this blog I found and organized here more than a score that make a substantive point about workload. For instance, several spoke to indicators of workload by practice area (See my post of Dec. 22, 2005: international M&A – rules of thumb on costs and staffing; Jan. 6, 2006: some practice area metrics for workload; May 5, 2006: contract-related activities; Aug. 22, 2006: lawsuits pending may be poor indicator of volume of work; Nov. 6, 2006: litigator workloads at AXA; and Dec. 10, 2009: patent licensing pushes activity.).

Drivers of individual and departmental workload appear in posts (See my post of Oct. 30, 2005: administrative time squeezing out substantive lawyering time; June 28, 2006: client training effects workload; Oct. 12, 2006: new roads, filled; new lawyers, filled to capacity; Nov. 24, 2007: complexity, volume and velocity all determine workload; April 9, 2008: quasi-legal tasks add work; June 15, 2008: Supreme Court decisions can significantly affect law department workload; Jan. 12, 2009: a person’s supervisor strongly influences workload; March 12, 2009: to bring work in doesn’t necessarily mean to add workload; and July 7, 2010: make policies easily available online to reduce constant questions.).

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The latest issue of Of Counsel, March 2011 at 11, describes my innovative approach to law department benchmarks. (To take part, click on the icon upper right.) It also explains the three most important benchmarks, and how law firms can benefit from familiarity with corporate benchmarks. If you would like to read it, click here for the PDF of my Of Counsel article.

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A large portion of what in-house lawyers cope with, unravel, interpret and apply circles around regulations promulgated by the federal government. The Economist, March 19, 2011 at 5 says that “Some 1,000 pages of federal regulations were added each year Mr. Bush was in office. A quarter million Americans have jobs devising and implementing federal rules.” Our nation’s laws and the profusion of regulations that embellish them pervade the concerns of corporate lawyers in all practice areas.

The amount, complexity, fluctuation, and level of enforcement of regulations without cavil drive corporate legal headcount and spend (See my post of June 15, 2005: Sox compliance costs; Dec. 14, 2005: legal intensity of regulation; April 19, 2006 # 1: complexity of federal employment regulations; Feb. 25, 2008: service providers for bill and regulation tracking; and March 29, 2010 #2: Sarbanes’ compliance costs.).

One of my posts yesterday mentions a trillion dollar cost of federal regulations (See my post of March 27, 2011: methodology might show alignment and cost avoidance.). I feel obliged to add my balancing belief: government regulations do far more than simply impose costs. One industry’s regulatory burden – clean up strip mines, install catalytic converters, or light railroad crossings, for example – could be millions of people’s improved quality of life. A compliance “cost” – pasteurize milk comes to mind – benefits every child who drinks milk. All regulations observed impose costs but they generally aim to reduce the externalities otherwise splattered out by a laissez faire, caveat emptor economy (See my post of July 27, 2007: regulation that lets purchasers of airline tickets benefit from lowered prices.).

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The Economist, March 19, 2011 at 69, writes that the European Union has taken a long step toward the creation of a single European patent. If approved by the European Parliament, the new regime would dispense with separate validation in different nations (with attendant translation and other costs) and that “will slash the cost of a European patent to just a few times the cost in America; it now costs about 15 times as much.”

Law departments and their patent lawyers around the world will rejoice.

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Federal regulations “already fill 150,000 pages of fine-print text and cost Americans $1.7 trillion a year.” This claim, controversial at the least regarding the cost, appears in Met. Corp. Counsel, March 2011 at 5, from Thomas Donohue, President and CEO of the U.S. Chamber of Commerce. If someone can come up with such a figure for the federal government, someone can also probably estimate a counterpart figure for the States.

If the cost of regulations were as quantifiable as the quote suggests, in-house counsel who advise clients on how to interpret and comply with them would have more raw material with which to quantify the value those counsel deliver (See my post of Jan. 28, 2011: regulations assessed as “economically significant” or not in terms of costs and benefits.). For example, if in-house lawyers spend time on regulations roughly in proportion to the economic cost of the regulations to their company, that would be a performance and value indicator.

More directly, if a particular company spends less on compliance with regulations but still has a good track record on investigations, fines, or negative publicity, the lawyers for that company could boast of their relative effectiveness and be able to prove it (See my post of Feb. 3, 2011: high praise for GE’s lawyers on tax compliance.).

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Mark Harris of Axiom remarked at the recent Georgetown Law Center conference that the Fortune 200 control 85 percent of the $100 billion legal market in the United States. The 200 largest US law firms, he then added, have revenue of about $85 billion. If both those statements are even approximately true, there is far more concentration in the legal market than most people recognize.

The Fortune 500 participants in my General Counsel Metrics benchmark survey, of which there were 95, reported total legal spend of $9.8 billion (See my post of Feb. 11, 2011: analysis of Fortune 500 benchmark data.). Assume 60 percent of that spend went to law firms and multiply by five to reach 500 Very roughly, that leaves $30 billion in projected external spend by the Fortune 500. Since the median total spend of my benchmark group was $50 million, perhaps my group is not representative at the highest end so perhaps $60-80 billion is about right (and even so, some non-trivial portion of that spend goes to non-US law firms).

As to the huge law firms, on a very broad guess something like a fifth of their revenue might come from individuals or non-US companies. After all, around 10-15 percent of their lawyers practice from offices outside the US.

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At one time, the term “consigliore” embodied for lawyers the notion of the completely trusted confidante and advisor. The term doesn’t show up much these days (See my post of Aug. 28, 2005: common desire to be seen as a consigliore.). Perhaps it has been elbowed aside by “trusted legal advisor” (TLA).

Much as “bet the company” litigation gets far more play than its actual frequency deserves, the so too the exalted status of “trusted legal advisor” appears in print and at conferences much more than those who have earned it exist in real life. Agreed, many partners at law firms have earned the respect of their in-house clients; their clients go to them regularly for certain kinds of matters, like their services, and value their advice. That service relationship, it seems to me, represents a basic attorney-client bond but it doesn’t reached the pedestal of “I trust you and need you completely for the toughest calls.”

Technical proficiency and economic efficiency demonstrated over time doesn’t reach the connotation of “trusted legal advisor” – a person who makes the really tough judgment calls that require courage, grey hair, magisterial knowledge, gravitas. Only every now and then does a general counsel look for that kind of penetrating perspicuity – a hostile tender offer, a CEO charged with harassment, the anti-trust threat of breakup, “telephone number” damages (10 digits, billions of dollars), a dawn raid by the SEC, a headline disaster. We should try not to dilute powerful terms; TLA should be a privileged, rare accolade.