Morrison on Metrics: Ratios of Benchmark Figures Hold Significant Value

Benchmark figures, on their own, have modest value, such as the average number of patent lawyers among a group of pharmaceutical law departments. Of more value to general counsel are ratios of such figures, normalized figures such as the median of the number of patent lawyers for each company divided by the company's revenue. But the most value to come from benchmarking is to learn correlations.

For example, there is a correlation between R&D spending and the number of patent lawyers employed by a company. To illustrate with hypothetical numbers, for every additional $200 million of R&D spending, a typical law department might add a patent lawyer. That would be a positive correlation, where one metric rises a certain amount as a second metric rises by a certain amount. (A negative correlation means that one number falls when the other rises.) Generally speaking, there is an intuitive explanation for a strong positive or negative correlation. On the illustration, research investment inevitably leads to patentable inventions which in due course justifies more patent lawyers.

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Rees Morrison

Rees Morrison, Esq. is the founder of General Counsel Metrics, LLC. Based in Princeton, NJ, Rees has for the past 25 years consulted solely to...

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