Morrison on Metrics: Absolute Clarity About Normalized Metrics

An absolute number, such as 10 lawyers, differs from a normalized number, such as 10 lawyers per billion of revenue. The bigger the law department, the larger the absolute numbers, whether of lawyers, internal spend, external spend, cases, office locations, library books or whatever. Small legal departments just don't match up. However, if you divide the absolute numbers of departments of all sizes by revenue (or by employees, market capitalization, years in business, depreciation on hardware or some other figure they all have), departments of every size can compare themselves to each other on a similar quantitative footing. Both the top number (the numerator) and the bottom number it is divided by (the denominator) tend to grow or diminish in proportion. This technique of normalization allows benchmarking analysts to include law departments of vastly different sizes and yet produce their metrics on a comparable basis.

Let's clarify this with some examples. A law department with three lawyers has 60 cases pending. Another company has 20 lawyers and 200 cases pending. The absolute numbers are much bigger, obviously, for the second department, but is the ratio of lawyers to cases? Without normalizing those absolute numbers, it is difficult to say which law department has a higher caseload for its attorneys. So, you divide each department's cases by its lawyers. The first has 20 cases per lawyer whereas the larger department has only 10 cases per lawyer. Once you normalize the two departments - adjust their figures by numbers of lawyers, you can speak about them in the same proportionate terms and clearly describe differences in caseload.

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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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